== Long-term price concerns ==

It's not all the fault of the shippers, however. In the Netherlands port has found itself unwittingly caught up in a vicious price war between discount grocery chains. The average retail price has crashed to a measly e2.69 a bottle. It is not against the law to promote loss leaders as it is in France and Belgium. Euan Mackay, who works the region for the Symington Family (Dow, Warre, Graham et al), reckons that retailers are losing at least 50 cents a bottle on every "premier prix" bottle of port sold. "This has taken e5 million a year out of the value of the Dutch port market," he says, "and this is concerning for the long-term image of the product, although miraculously it still remains relatively high."

This is thanks to the dramatic growth in the premium sector - up from 42,000 cases in 1995 to 126,000 in 2006 and accounting for more than 8 per cent of the market. This is higher than in both Belgium (5.5 per cent) and France (7 per cent), but appreciably below the average for all world markets (19 per cent).

The progress made by premium wines has been impressive in all three countries. Admittedly the sector now includes Reserve rubies and tawnies so percentage shares should perhaps be viewed with caution. But a total volume of 400,000 cases still amounts to a sizeable chunk of business. And it means shippers can look to the future with a certain optimism.

Surprisingly the Netherlands is the market which is flagged up as having the greatest potential. Fladgate Partnership managing director Adrian Bridge says that growth in the company's main brands (Taylor, Fonseca, Croft and Delaforce) is expected to be 25 per cent in aged tawnies and 16.5 per cent overall in the next three years.

The Spanish-owned Sogevinus group is also well placed to take advantage of the expan ding premium sector. Its Kopke brand was originally Dutch and is already a reference for up-market consumers, while the strikingly repackaged G by Gilberts range is, according to managing director Dionisio Oseira: "Deliberately positioned to attract new users, sophisticated aperitif drinkers in restaurants and the younger crowd in discos".

It is a point echoed by Symington Group export director Euan Mackay. "Port's consumer base in Belgium and France is essentially female and middle aged," he says. "In Holland it is much younger. There is a major opportunity for quality port, as it goes exceptionally well with cheese, and cheese plays a big part in Dutch eating habits. Aged tawny will continue to grow because people understand the age statement."
== French connections ==

France at 2.77 million cases still accounts for one bottle in three of all port sold. This provides enough critical mass for there to be five French-owned port companies operating in the industry's nerve-centre, Vila Nova de Gaia. These vary from the dominant (Cruz, Rozès and Vasconcelos) to the boutique (Noval, owned by AXA, and Ramos Pinto, by Champagne house Louis Roederer).

Cruz, part of La Martiniquaise, the most powerful player in the French wine and spirit business, is the clear leader and has a firm grip on the market. Some say that, with its brand and buyers' own-brand sales combined, they account for as much as 50 per cent of the total. Furthermore, Cruz is the only company to have invested significantly above the line. The company has done sterling work in keeping port in the public eye, and particularly in the promotion of white port, a category which has doubled in the last 10 years. Interestingly Cruz has pumped money into tourism and point-of-sale material in Portugal, even though the Portuguese market is not a company priority. But there are a million Portuguese nationals living in France, and this is clearly a way of keeping their attention when they return for their holidays.

France also has enough to offer the specialist shipper. Both Noval and Ramos Pinto rely on their group distribution companies, with their considerable muscle in Bordeaux and Champagne respectively, to reach high quality "cavistes" and restaurants.
== Home truths ==

The Portuguese-owned Sogrape brands - Sandeman, Ferreira and Offley - are reasonably well distributed in France, Belgium and the Netherlands. Administration director George Sandeman is not only a strong spokesperson for the group, he is also the president of the port exporters' association. The Sandeman brand has been successfully relaunched in Belgium and this is now its first priority market. But Sandeman himself is worried about the consumer both there and in France. "I see no evidence of people coming into the category," he says, "and as our customers get older, they become ever more price sensitive. Unless we can recruit more people into the sector, pressure on price will continue and a mid-term decline in volume is inevitable."

While there are undoubtedly positive signs, the question of price remains crucial - and largely unanswered. Its effect is felt throughout the production chain. One Douro Valley grower with a medium-sized, A-rated port authorisation from the Port and Douro Wines Institute sells to one of the major exporters. Although full of praise for their technical support , he has not had a price increase for four years.

The owners of a magnificent quinta near Pinhão are selling up because they cannot make a profit . Mildew has wiped out the production of several farmers who had neither the means nor inclination to take the necessary action to save their crop when it rained heavily in April and May . No one need fall foul of mildew if the proper action is taken. At the time of writing, the vintage is under way and properties that were duly treated have grapes that are in perfect condition.
== Defining the boundaries ==

So what about the future? Clearly something has to be done about cheap tawny port in France and Belgium, and ruby in the Netherlands. Jorge Monteiro, the dynamic president of the IVDP, is keen to have the word "tawny" redefined as a special category port with a minimum average age, which would have an immediate impact on the quality of "le petit porto" in France, while in the Netherlands, along with many others, he sees a worthwhile future in LBV and Vintage.

Dirk Niepoort, fifth generation head of the Dutch family-owned concern, says he doesn't think this necessarily helps the sale of his port in Holland. But he has managed to increase his average price both there and in Belgium. "The port industry is getting ever more concentrated into groups," he says, "and this is creating pressure to cut costs to the bone from the vineyard through the production process to the marketplace. We're in danger of losing sight of how great port really is. I have my business plan for the next 15 years. I doubt whether the big companies think further than three." ----=== Port: total market sizes 2006 ===Bottled, Bulk, Total, Bulk %

9-litre litres 9-litre cases of total

cases equivalent

Belgium 1,255,319 0 1,255,319 0

Netherlands 1,559,777 0 1,559,777 0

France 2,772,998 825,444 2,864,714 3.2

Total world 10,072,539 962,109 10,179,440 1.1

Source: IVDP----=== Port: premium shipments (9-litre cases) ===Vintage LBV Colheita Aged Reserva Reserva Crusted Total

ruby tawny premium

2000 145,256 453,456 48,144 371,156 290,700 - 322 1,309,034

2002 157,636 451,430 39,703 402,302 632,598 52,859 6,157 1,742,685

2004 80,655 475,276 34,184 429,754 627,268 87,801 4,519 1,739,457

2006 87,795 408,243 35,667 475,231 856,439 104,251 5,011 1,972,637

Source: IVDP