The global wine industry is divided in two areas, which are the Old World Countries and the New World Countries. The Old World countries are those located in Europe, while the New World Countries are Australia, United States, Chile, and South Africa. During the past few decades, global consumption of wine had been increasing. While the demand of premium wines was increasing, the consumption of inexpensive wine was decreasing. In Europe, families owned small vineyards and most of them produced wine for their own consumption. On the other hand, in the New World, larger firms owned wineries and competition was strong.
I will use Porter’s Five Forces to analyze the global wine industry.

Threat of New Entrants: Low; Entry Barriers: High (-)

I would say that in the global wine industry, the threat of new entrants is low and the barriers to entry are high. This is due to the fact that the acquisition of new land and labor to produce wine requires a large amount of capital. Known brands spend a large amount of money on technology, innovation, and advertising, so it would be hard for independent wineries to start their own production, especially in New World countries and be profitable. Additionally, price per acre in the United States is really high, and a new piece of land takes several years to produce revenue. Also, the wine industry is already a mature one and consumers have their preferred brands of high quality wine, therefore obtaining a large share in the market would be very difficult for a new wine producer.

Bargaining Power of Suppliers: High in Old World; Low in New World; High globally; (+)
In the Old World countries, landowners are the only source of supply for wine producers, therefore they exert power in that area and the bargaining power of suppliers is high. On the other hand, in the New World, wineries have many sources of supply, which makes