FROM THE FACULTY OF ECONOMY TO THE VINEYARD: ITALIAN WINE TODAY AS SEEN BY THE PROF AND PRODUCER PIERO MASTROBERARDINO, HEAD OF THE FAMOUS WINERY IN CAMPANIA. STRENGTHS TO SAVE AND WEAKNESSES TO ELIMINATE

Perhaps there has never been an historic period like this one, where economic dynamics are putting Italian wine in the need for a profound reflection on their strengths and weaknesses: to improve the first, correct the others and better understand what to do in the future. We asked a very knowledgeable authority on the matter, a Professor of Economics and Business Administration at the University of Foggia as well as successful wine entrepreneur, to analyze the situation: Piero Mastroberardino, former president of Federvini (Confindustria), now at the helm of the famous winery in Atripalda (Avellino-Campania region) and among the most important in Southern Italy and beyond. As an entrepreneur and professor of economics, which do you think are the strengths and weaknesses of the Italian wine system in this historical period? "Among the strengths, I would put the potential of distinctive terroir that make up the mosaic of wine in first place, as one with the important advance of traditional varieties, unique and unrepeatable in different environmental contexts. From these arise the strong personality and character of the wines, as well as great and fascinating stories to tell to the public. But we must be careful to preserve these elements, as protect them from competitiveness in the broadest sense of our offer, as the organization and structure of the supply chain is very complex and delicate to manage. Secondly, the significant quality standards developed by Italian production in the various sectors over the years. Our offer in recent decades has been consistently protagonist across all sectors targeting the consumers expectations of price / quality ratio. But even in this case one cannot ignore the problem of a slow, gradual erosion of the degree of competitiveness supply effecting the radical changes that have taken place in recent years. Among the weaknesses, however, in first place I would mention the excessive bureaucratic burden that has accompanied our industry for far too long, resulting in high operating costs in the supply chain, which impact economic balance and competitiveness of the Italian market in the world. This problem tends to get worse due to the critical economic situation, which is causing strong pressure to rationalize purchasing procedures and consumption. The emotional component is reduced and there is a tendency to "downgrade" the reference prices of the classic market segments. In this scenario, the offer system is more flexible and able to respond faster and more efficiently to recover resources and put them back on the market. Our country is not among those: the supply chain is quite rigid and slow to react. It is not always easy to position products in higher segments, in order to recover the difference in resources this trend absorbs. Another structural limit”, says Mastroberardino, “concerns the lack of perspective of the system, because wine has too marginal a voice in the debate. In a nutshell, it’s a bit like soccer, everyone in Italy talks about wine not as amateurs but as if they were the managers of the team. Yet, only a very few among those who talk about it so much truly know and deal with the real problems of wine, daily. And further, among the sad notes, one cannot overlook the historical absence of promotion on an institutional level. When resources have been assigned, unfortunately the effectiveness of the expenditure has been insufficient. And often we have witnessed skirmishes among different institutions striving to assert the primacy of the role of communications strategists, neglecting the firms in those markets, which did not share in the planning stages. It is a perennial problem, which relegates our offer too often to the role of follower compared to country systems in which public and private develop significant synergies for the use of resources. Italian wine, its history, its cultural roots, and its very modern style of products, does not deserve it. Despite all this, the sector still shows a remarkable strength and resilience to the rigors of this situation. The wine business has endured the economic and financial stress far better than other sectors. It is solid and credible, despite everything. And that is why we must not exaggerate the view that everything is sustainable”. The wine sector weighs the most on the trade budget of Italian food. This is a sign that somehow the industry continues to go forward better than others. Does the financial world understand this? Has there been an improvement in the relationship with credit over the past year or not? "The wine world is not very interesting to finance, at least regarding equity, for some fundamental reasons: excessive fragmentation of the offer and the related issue of firm size; the difficulty of establishing significant concentration of the offer while maintaining high brand image, causing erosion of value and risk of defocusing of the position and the weight of agricultural investment, which affects economic returns and the related structural rigidity of companies. Since the brand image of higher quality cannot be separated from care directly in the upstream stages of the supply chain, these choices have an impact on the economic and financial structure, raising the threshold rigidity of financial statements, which in times of downfalls in consumption certainly does not help. Experiences in recent years have produced a variety of effects, which deserve different attention to sew a more structural financial approach. The use of traditional credit instruments requires a deeper reflection. Here finance is looking at all the critical factors that characterize the Italian entrepreneurial system: pulverization, problems of capitalization and liquidity of assets and managerial difficulties typical of family businesses, to name a few. So also in this regard we need to proceed with caution. However, in this historic period the strong propensity to export is an important bulwark that has helped to absorb the violent economic crisis better than in other areas. This has partly offset the critical issues mentioned above, in their dealings with the credit system”. "Export seems to be the mandatory way. But isn’t it dangerous to be resigned to the decline of the Italian domestic market, which, however, is still the number one market for our wine? "It's definitely dangerous. We cannot let The Italian domestic market fall, because the concentration of wine lovers and expert tasters is now so high that it requires the utmost consideration. Our country is in a transition, but its prestigious wines will retain their valuable space. Consumption is changing and so are places and occasions. We are facing a problem of segmentation and repositioning of our own offer within our borders and, given the internal volume of consumption, this is perhaps the biggest challenge”. If you today, with the touch of a magic wand, could make a radical reform for Italian wine, what would it be? "The radical reduction of bureaucracy and rechanneling all the resources in public and private sectors for the promotion of Italian wine in the world. With a great sense of pride for the extraordinary values that our wine world is able to express. And without the same old, instrumental witch hunt ... " Many speak of a recovery of the wine of Southern Italy, and Mastroberardino is definitely one of the biggest names of this success. What is the secret not only of your winery, but also the growth of wine production in Southern Italy? "These wines are very real, sincere and honest, and express themselves so. You drink the land and the air. You can feel the mood and character of our people. A few days ago I was thinking about the fact that for over a decade, without interruption, Radici Taurasi has continued to receive the highest critical acclaim. And I like to think it's not just by chance”.