Mr. Terry Pennington:

I will try to answer the question in context, as a wine producer. At Santa Rita Estates we are very focused on investing from the vineyard to the bottle, but we also invest heavily from the bottle to the consumer, thereby investing in the market. In terms of the wine market specifically but also in terms of retailing, our business is very focused on what we term to be sustainable, which for us means three things. It is about environmental consciousness, it is about social responsibility - both of which include ensuring products have indications of provenance, something ever more sought by Irish consumers - and it is about economic viability. To answer the question, for us, economic viability is about making choices. In Ireland, traditionally we have had a very strong independent sector that gives consumers diversity, offers education and, above all, creates competition in the channel. I would argue that up to a few years ago this was a fairly good model. However, within Europe we are facing the same pressures. For us it is about choices with regard to investment and where we put the money. In countries that are developing it is very important for us to support smaller businesses. To give some sort of perspective, we employ people directly and indirectly in this country, and in 2013 we will have invested more than €1 million in marketing that is not price-related. I believe there is a commitment from producers to support the different channels. If we work with only one segment of the market it will become purely a pricing proposition; members have seen the consequences of that. Even in a model such as this we recognise that duties will stay in some capacity, so it is about making that a platform where different segments can survive.

In reality, we have seen consolidation in markets such as the United Kingdom. To give some rough statistics, 92% of the take-home market for wine is controlled by nine players. The independent sector has almost disappeared, and this trend is becoming almost irreversible. There are some seeds in other categories - some small independent trades such as craft butchers and so forth - but, as producers, we need those categories in order to survive in this market. They need the platform to trade.