Prices to rise as global wine production at lowest level for decades
- Wednesday 31 October 2012
Poor harvests mean 'no more entry-level wine': Val d’Orbieu
The International Organisation of Vine and Wine (OIV) estimates output at 248.2m hectolitres, down froim 264.2m hectolitres in 2011, OIV director general Federico Castellucci said at a press conference in Paris yesterday, a shortage equal to 1.3bn bottles.
This will be the lowest level since 1975, Castellucci said, blaming the poor conditions for harvest in both hemispheres, particularly in major producing countries like France, Italy and Argentina.
‘We’re dipping into the reserves for supply,’ Castellucci said in an interview during the conference. ‘There’s a lack of product in bulk. Merchants worldwide are starting to turn to the small countries for bulk wine.’
The knock-on effect for consumers will be a rise in price. As early as August Spain was predicting substantial price rises, with a litre of bulk white wine in Castilla-La Mancha costing €0.48, as compared to €0.28 in 2011, and prices doubling elsewhere.
In Italy the cost of a litre of Pinot Grigio from the 2012 vintage rose to €1.30-€1.45 from around €1.20-€1.30 last month; New Zealand has reported bulk wine prices have increased significantly.
Earlier this month, Bertrand Girard, CEO of the Languedoc-based Groupe Val d’Orbieu, France’s biggest cooperative with 2,500 growers, told a press conference the situation was ‘historic’, not least because European stocks had been depleted over the last two years.
‘Spain has zero stocks. Italy has zero stocks. We no longer have stocks to bridge the gap. We have no more entry-level wine.’
Harvests worldwide have seen historically low yields this year. In New Zealand, 2012 was one fifth down on 2011, the Australian harvest hit a five-year low, France is down by an average 20%, Italy’s harvest was the smallest since 1951, and Argentina’s output is down 24%.
Although there has been a series of boom wine harvests, notably from 2004-2006, wine production has been on a downward trend in the last decade, while global consumption has risen. Vineyard hectarage has shrunk to 7.59m hectares from 7.85m in 2000, OIV data shows, and global wine output fell to 265m hectolitres in 2011 from 280m hectolitres in 2000, while consumption has risen from 225.7m hectolitres to 244.3m hectolitres.
A report by Dutch bank Rabobank earlier this month suggested that the low yields of 2012 and increased prices, together with increasing consumption in the US, China, Brazil and other emerging markets, mean the industry is 'close to balance'.