Suppliers in the wine sector

Abstract

Suppliers are an important part of business because they supply the company with sources for production. If a company relies solely on one supplier, it may interrupt the flow of production due to failure to deliver material. Suppliers can demonstrate its strength mainly by increasing prices or reducing the quality of supplied materials. In the wine sector, there are the following major groups of suppliers: feedstock suppliers (wine grapes), suppliers of chemical additives and other substances necessary for the production of wine, suppliers of manufacturing technology, suppliers of packaging materials, energy suppliers and other vendors. Highest bargaining power is currently available to suppliers of energy, because energy is an essential resource for the industry and there are few suppliers of this product. But their bargaining power gradually decreases depending on the liberalization of energy markets, supported by interest in this area. Overall, it can be stated that the bargaining effect is of medium importance.