2022 at a glance
High inflation and rising interest rates as a result of the post-pandemic pent-up demand met high shipping prices and delays and – from February onward – the Russia-Ukraine conflict’s impact on energy bills. Consequently, a wariness about consumer confidence, coupled with lags in getting the 2021-contracted wines onto retail shelves, had a dragging effect on bulk wine-buying across the world in 2022.
White vs. Red
A number of shorter harvests for the white varietals in 2021 – and the greater resilience of white and sparkling wine sales versus reds in mature markets over the past few years – meant momentum on varietal whites remained comparatively strong through 2022. It did appear, however, that demand was cooling through the second half of the year as the 2022 crops came in good-sized and – perhaps due to slower retail sales – some previously contracted wines were placed back on the market.
The red wine and rosé markets remained muted throughout the year except on specific types – high-colour, 14%+ alcohol reds, for example, or single-vintage pale/aromatic varietal rosé. Bordeaux growers are lobbying the French government for assistance with an acute oversupply of reds; Australia is selling its reds at ultra-competitive export pricing. Red wine inventory is large in many places, from Spain and southern France to Australia, from South America to California.
Better news for 2023?
Looking ahead to 2023, we have identified some glimmers of good news. Inflation trended downward in North America and the Eurozone towards the end of 2022 and there was a small uptick in consumer confidence – admittedly from low levels. Drewry’s World Container Index shows composite shipping costs as of 12th January were 78% below January 2022 and 79% below their September 2021 peak. Further small week-on-week reductions are expected.
China, meanwhile, has now ended its zero-COVID policy and reopened to the world in January: this could lead to a boost in demand for wine imports – especially welcome considering the slow market for reds globally – though it may also work against the fall in shipping container prices.
Australian wine does not stand to benefit while China’s prohibitive import tariffs on it remain in place, but the election of a new Australian government last May, combined with China’s reopening, has brought fresh hope of a thaw in Australia-China relations.
Despite – and sometimes because of – what may be going on at the macro level economically, there continue to be excellent opportunities to be harnessed on the grape and bulk wine markets. Ciatti can draw on decades of experience to help buyers and sellers navigate 2023 and beyond: don’t hesitate to get in touch. In the meantime, we wish all of our friends, clients and Global Market Report readers a very happy and prosperous year ahead.