French and Chilean wines dominate the market both for brand recognition and
market share. In 2008 they had a combined market share of around 54 percent.
Though the French producers are still the strongest players and have continued
to enjoy steady growth in value in recent years, their market share has steadily
declined due to many new entrants into this market, particularly those from Chile,
Australia, USA, South-Africa and Argentina. A wide variety of Chilean wines are
available in the market, including sparkling, red and white wines, and local
consumers prefer Chilean red wines to wines from other parts of the new world.
According to the Vietnam Beverages Association, there are approximately 10
wine producers in operation in Vietnam with a total annual capacity of
approximately 4.5 – 5 million litres. However, their market share is quite limited in
comparison to their foreign rivals who have built up brand awareness and have a
good reputation for quality and consistency. Vietnamese wineries such as Da Lat
Winery, which makes some of the best locally made wines, can only penetrate
the lower market segment with prices ranging from US$ 2 to US$ 5. In addition,
the wine producers in Vietnam are mostly confined to a few regions like Ninh
Thuan and Binh Thuan provinces, and the grapes do not seem to be of a quality
for making premium wines, according to some experts. Recently Da Lat Winery
had to import grapes and wine inputs from France to produce better quality win