Some problems and some suggested solutions of the re-export of wines and spirits from Malta

Abstract

We shall in this report be analysing the re-exports of wines and spirits from Malta to countries bordering in the Mediterranean littoral. The report is based on experience derived from 13 years working in the field. Although this is a specific market, we shall see that many conclusions from the analysis of trade which may well apply to other exports as well. However at this stage it is well to consider what these re-exports cost. In Malta there are five main importers of wines and spirits, although there are three or four who are quite small and relatively unimportant although one or two of these firms are now growing fast and may be important in the future. For any of these firms to consider re-exports however, it must firstly be in a strong financial position and secondly it must have agencies of world-wide repute, as just having agencies of minor and unheard of whiskies, gins, brandies and liqueurs is not enough. If one is to sell, one must have lines that are in demand by consumers. This fact alone however means that in the re-export trade one immediately meets international competition , where larger firms may be operating and gaining economies of scale, enabling them to sell at prices which allow the smaller local firm only small margins of profit. In the next three chapters we shall consider the various markets open to the export-oriented firm, and what potential exists in each. Before proceeding however it is well to remember that the re-export of goods helps the balance of payments of the economy, as the local currency x is being sent abroad to purchase the items desired, which are in turn sold for foreign currency X,Y,Z. Thus the local economy benefits by the added Y of the sale.