The report said a change is need to remain competitive

The report said a change is need to remain competitive

Spanish wine makers have been urged to improve efforts to reach non-EU markets as Europe struggles with oversupply.

A Rabobank report released this week said the move is necessary for Spain “to remain globally competitive”. It recommends more focus on “international” variants or building global demand for traditional grapes such as Tempranillo.

“While Spain has seen marked improvements in its wine production efficiency as a result of EU subsidies, it still struggles to build penetration in non-EU markets,” said Rabobank analyst Stephen Rannekleiv. “In conjunction with grubbing-up subsidies, Spain was also a major recipient of vineyard restructuring funds which has raised yields and is expected to lead to an increase in wine in the market.

"A pressing concern for many is that much of this increased production is destined for markets already dealing with their own oversupply issues, such as France and Italy.”

The report claims that increased penetration in non-EU markets will force Spanish growers to compete on price with New World rivals. It suggests strengthening consumer acceptance of traditional wine grapes to attain more premium pricing, but warns that this is the “more challenging option and longer process”.

Rannekleiv said: “Improving the ability of suppliers in Spain’s main production region of Castilla-La Mancha to develop strong brands with demand beyond the EU markets will have an important positive impact on the wine industry in Spain, but also in the rest of the EU.”

Rioja volumes hit a record high last year as they increased for the first time since 2008.