Producers challenges

Question 1

Climate change- lower yielding

Answer 1

Global wine production fell 9.6% to 237.3 million hl in 2023- IWSR

In 2023, global wine production was estimated at** 244 million hectoliters (60 years low),** outstripping consumption by 12 million hectoliters. In other words, even in a much-reduced vintage, there’s a glut of wine. **Oversupply **at present almost **equivalent to the entire UK wine market at 13.3m **hl (1.7bn bottles)

Cava- Freixenet- redundant over 200 employees short vintage.

Question 2

Labour

Answer 2

Nearly half (45%) of all businesses have labor shortage,”ProWein Business Report 2022”

Among sales channels, the hospitality sector (90%) and restaurants (66%) reported significant labor shortages.

Solutions
“The wine industry is increasingly focusing on fair labor practices.
Joseph Brinkley, the director of regenerative agriculture atBonterra - ROC-certified , highlights the implementation of a living wage and regular feedback sessions with farmworkers.

Systembolaget - risk analysis (eg in Italy) + code of conduct in working ohours, remunaration, discrimination, child labour for example. Also has a report system trialed first in SA.”

Wine society

Question 3

Supply chain distruptions

Question 4

Export declines

Answer 4

**SA: **
2023 - 17% volume /+ 0.9%value

Italy
Fell 7.3% in 2023 Lamberto Frescobaldi, president of UIV, commented on the situation: “It’s undeniable that 2023 was affected by cyclical factors, especially the reduction of stockpiles in North America. But it’s equally true that our country urgently needs to expand its customer base: These main five countries account for nearly 60% of the value of Italian exports, compared to 50% for France and 40% for Spain.”

Australia
Declined by 1% in value and 2% in volume in 2023

Exports to Northeast Asia increased by 29% in value, particularly Hong Kong which saw a 60% increase in exports- mainly red wine above AU$10 per liter FOB,

Despite declines to North America and Southeast Asia, Australian wine exports remain relatively stable due to growth in Europe and Hong Kong.

Exports to Japan grew by 4% and to Mainland China by 21%”

Question 5

Oversupply

Answer 5

In 2023, global wine production was estimated at ** 244 million hectoliters (60 years low),** outstripping consumption by 12 million hectoliters. In other words, even in a much-reduced vintage, there’s a glut of wine. **Oversupply **at present almost **equivalent to the entire UK wine market at 13.3m **hl (1.7bn bottles)

Question 6

Over supply legal solutions

Answer 6

Champagne has capped yields for its impending harvest at a slightly lower level than last year, as sales fall by almost 4% in the first half of 2023.

Yield droped 5% from **12K/ha to = to 11,400kg/ha **on 2023

Question 7

Over supply political/economical

Answer 7

France and Chile are removing vineyards to address oversupply.

France
is offering 57 mm Euros financial support for vine removal of 10K ha in Bordeaux in 2023, whereas Chilean vintners lack such support, and they are just leaving them because cant afford to pull.

Chile

Tim Atkin :Chilean producers are talking about pulling out 20,000ha of vines.
Viña Santa Rita has ssales lower around 8-9% below budget”, but other “big names are 30-40% down”, said Sebastian Labbé, the winemaker for Viña Santa Rita. ( falling demand in key export markets, particularly China, combined with low levels of domestic consumption– which he said is just 12 litres per capita)

-in 2022, wine consumption in **China **fell by 16% to 880 million liters, with a notable shift away from Shiraz and Cabernet Sauvignon, key varieties in Australian and Chilean exports.

German Winegrowers’ Association - DWV - calls for a ban on new planting, a viner-pull scheme and ways for people to leave the profession in a socially responsible way. “The industry needs to find a new balance where supply meets demand in the long term,” wrote Christian Schwörer, DWV General Secretary

“The VDP is open-minded and positive towards Piwis. However, we believe they are still on their way, especially in terms of their distinctiveness, expression and perfect suitability for certain terroirs.” Only when Piwis could replace traditional varieties to the extent that “the identity of our valuable appellations is unmistakably reflected and a statement on ripeness can be made, will engagement in the rare top locations be conceivable.” PIWI