When the going gets tough & the streets run red

First there were only signs that the good times might be over but now more and more aspects give proof that we are facing difficult times. Of course, there is no point in busting one’s head in the sand, but if you’re one of the incorrigibles, we have solid proof for you in this latest edition of the JollyCellarMaster Weekly that might make you change your mind. And if you’re not, still read on.

Piles of Vines and Wine here, Declining Consumption there

…The Tough Get Going

If it was that easy! But is it really that bad? Well, earlier this year, we wrote about the downturn in the world industry and things don’t appear to look any better. Need proof? Just look at three articles Meininger International has published on the situation on important wine markets, France, Italy and Germany, and you’ll see what we mean.

In the world of wine, Europe is currently experiencing a complex blend of challenges and surprises that are reshaping the landscape of one of the world’s most cherished beverages. While Italy finds itself in the midst of a wine stockpile, Russia emerges as a beacon of hope for its exports. Meanwhile, France grapples with the oversupply predicament, and Germany’s wine consumption takes a somber dip.

Italy’s Stockpile Conundrum and the Russian Exception

As the new harvest season dawns upon Italy, a significant surplus of wine stocks has the industry on edge. Recent export data reveals a disquieting decline in various markets, with one exception that stands out – Russia. Italian wineries have seen their DOC (Denominazione di Origine Controllata) wine stocks surge by an impressive 9.9% compared to the previous year, thanks to an unprecedented backlog of these quality wines.

However, the assessment of exports to non-European Union (EU) nations presents a more nuanced narrative. Russia, as the outlier, boasts remarkable growth rates of 54% in quantity and 65% in value during the first half of 2023. In stark contrast, countries like the United States, Canada, Japan, Norway, China, and South Korea have witnessed double-digit declines in Italian wine imports.

The French Vineyard Dilemma

Turning our attention to France, the famed wine nation has been confronting its own set of woes. Over the past couple of years, the French government has taken decisive steps to tackle the issue of wine oversupply. Funding the uprooting of thousands of hectares of vines in Bordeaux and allocating funds for the distillation of surplus wine are among the measures taken.

Yet, industry leaders assert that these steps are merely scratching the surface of a much larger problem. Jérôme Bauer, President of the national organization of AOC wine and spirit producers, contends that France continues to produce an excess of wine and further vineyard uprooting is imperative. Reducing authorized yields and setting aside reserve stock, as planned for 2023, may exacerbate production costs.

German Wine Consumption Decline

Up north in Germany, wine consumption has been on a disheartening downward trajectory. According to data from NielsenIQ Homescan Panel, the percentage of German households purchasing wine has dropped to 44.8% in the first half of 2023, down from a peak of 50.7% in 2021. This reflects a broader trend of declining wine consumption in the country.

In 2023 alone, German wine consumption took a 5% hit, adding to the significant declines observed over the past several years. Sales by volume and value decreased by 14.6% and 11.6% in 2022, and the trend persists with a 5% decline in 2023.

Market Dynamics and Uncertainties

In terms of market share, Germany maintains its dominant position with over 40% (45.9% in terms of volume and 41.7% in terms of value). Italy is a close second (18.7% in volume and 17.5% in value). Spain has surged ahead of France in terms of volume, accounting for 14.6% compared to France’s 10.4%. In terms of value, France clings to third place with 11%, while Spain closely follows at 10.5%.

While Germany anticipates a substantial wine harvest in 2023, caution is advised in interpreting these forecasts. Factors like oidium and vinegar rot could cast uncertainties over the final harvest volume and quality.

In conclusion, the European wine world is navigating a complex narrative of surplus and scarcity, hope and despair. As Italy grapples with its stockpile and France seeks to balance its vineyards, the evolving preferences of wine drinkers play a crucial role. As we raise our glasses to the changing times, one thing remains clear: adaptability and strategy are the keynotes in the world of wine.

When the streets run red

No, this headline isn’t a reference to a mediocre American horror movie or the investment advice credited to John Rockefeller. It refers to actual streets running red, though not with blood but… wine!

As crazy as it may sound, it is something that happened last week in São Lourenço do Bairro, a small town with 2,400 inhabitants in the wine producing region that is known for the Bairrada DOC.

Two tanks of a local distillery burst and more than 2,000,000 litres of red wine found their way down the hills:

As funny as it may sound, this could have caused an environmental disaster if it had reached the Certima river, but local firefighters diverted the flood into a nearby field.

The owners oft he Levira Distillery, where the tanks exploded, have since apologized for the incident and taken measure to clean up the field.

And that’s all for the week but if you have an interesting story to tell or simply want to chat about wine as a guest on the Podcast, connect on Twitter or drop me a line. And if you want to stay in the loop about things happening at the JollyCellarMaster and the world of wine, make sure you sign up to our newsletter.

Disclaimer: As always, I’d like to be completely transparent about affiliations, conflicts of interest, my expressed views and liability: Like anywhere else on this website, the views and opinions expressed are solely those of the original authors and other contributors. The material information contained on this website is for general information purposes only. I endeavour to keep this information correct and up-to-date, I do not accept any liability for any falls in accurate or incomplete information or damages arising from technical issues as well as damages arising from clicking on or relying on third-party links. I am not responsible for outside links and information is contained in this article nor does it contain any referrals or affiliations with any of the producers or companies mentioned. As I said, the opinions my own, no liability, just thought it would be important to make this clear. Thanks!

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