The European wine industry is being battered by sliding demand due to the current inflation storm on food and drink prices, in combination with a solid 2022 harvest, which has left wine cellars filled to the brim, according to a new European Commission report.
Wine production on the continent increased 4% last year compared with the previous year, while wine stocks were 2% higher versus a five-year average. The drop in wine demand was the most significant in Portugal, down 34%. Demand also tumbled 22% in Germany, 15% in France, 10% in Spain, and 7% in Italy.
And it gets worse for the producers, as the commission stated:
“In parallel, EU wine exports for the period January to April 2023 have been 8,5% lower than the previous year, contributing to further increasing the stocks.”
The perfect storm of factors is “translating into sales difficulties for EU wine growers and producers, reduction of market prices and consequently, a serious loss of income especially in certain regions mostly hit by these trends,” the commission warned.
It continued:
“The situation is very fragmented across the EU, and the imbalance between the available supply and the demand is rather concentrated in certain regions and wines. The most affected are red and rosé wines from certain regions of France, Spain and Portugal, but other wines and/or Member States might encounter similar difficulties in certain production regions.”
In response to the overflow of wine on the continent and the crisis on the producer level, the commission has “adopted temporary markets measures to avoid that the unsold wine weighs on the whole internal market and prevents producers to find sufficient storage capacity for the new harvest.”
Tyler Durden
Sun, 06/25/2023 – 08:45
