EU support payments have helped improve the efficiency of Spanish win production however oversupply remains a concern. In order to improve its competitive position, Rabobank states that there are two possible strategies to follow. Spain can increase production of international varietal wines or build up foreign market demand for its traditional varietals. Because of vineyard restructuring funds being used to improve production and increase yields, Spain faces an oversupply that its traditional markets of France and Italy cannot absorb. To expand beyond the EU Spain will have to establish strong brands and adopt new consumer-driven marketing. If Spain chooses to increase production of international varietals it will have to compete with new world producers such as Australia and Chile in a volatile market. But if Spain decides to strengthen international demand for its traditional varietals, it would realize premium prices, but it would take a concerted effort by growers, cooperatives, and brand owners to develop.
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