The EU risks drowning in unsold wine, and the Commission is not innocent
The European wine sector has been hit by a drop in demand due to the current inflationary storm on food and drink prices, combined with a solid 2022 harvest, which has left cellars filled to the brim, according to a new report from the European Commission.
Wine production on the continent increased by 4% last year compared to the previous year, thanks to an excellent vintage, perhaps to demonstrate that not all "Climate Change" comes to silver. At the same time, however, wine stocks increased by 2% compared to the five-year average. The decline in wine demand was most significant in Portugal, with a 34% decrease. Demand also fell by 22% in Germany, 15% in France, 10% in Spain and 7% in Italy .
It seems that a significant part of the problem, at least according to Bloomberg, derives from the contraction of real incomes which has forced consumers to change some of their habits, especially regarding drinking, and abandon bottles, above all more expensive.
And for producers, the situation is even worse, as the Commission has stated:
“In parallel, EU wine exports for January-April 2023 were 8.5% lower than a year earlier, helping to further increase inventories.”
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The perfect storm of factors is "translating into sales difficulties for EU winegrowers and producers, a reduction in market prices and, consequently, a serious loss of income, especially in some regions most affected by these trends ” , warned the Commission.
And he continued:
“ The situation is very fragmented across the EU and the imbalance between available supply and demand is rather concentrated in some regions and wines. Most affected are red and rosé wines from some regions of France, Spain and Portugal, but other wines and/or Member States could face similar difficulties in some production regions.
In response to the glut of wine on the continent and the crisis at producer level, the Commission has “ adopted temporary market measures to prevent unsold wine from weighing on the entire internal market and preventing producers from finding sufficient storage capacity to the new crop ". At the same time, with a contradiction, the Commission admitted that threatening notices appeared on Irish bottles of wine on the health dangers due to wine, a measure which certainly does not help its consumption.
Let's hope that at least Italian winemakers will be able to overcome the crisis without excessive problems.
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The article The EU risks drowning in unsold wine, and the Commission is not innocent comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-ue-rischia-di-affogare-nel-vino-invenduto-e-la-commissione-non-e-innocente/ on Sun, 02 Jul 2023 11:18:52 +0000.