Italian wineries are now storing 9.9% more DOC wines compared to the previous year, while exports to non-EU countries are on the decline. The industry association, Unione Italiana Vini (UIV), and Vinitaly have analyzed the wine stocks as of July 31, 2023, as well as exports to non-EU countries. Stocks have risen by 4.5% compared to the previous year, primarily due to the unprecedented backlog of DOC wines, up by 9.9% compared to July 31, 2022.
Changing tides
The assessment of customs reports for third-party nations does not present a promising outlook. During the first half of 2023, Russia stood out as the sole and notably successful contender among the top ten markets, registering substantial growth rates (+54% in quantity, +65% in value). Conversely, in the United States, Canada, Japan, Norway, China, and South Korea, quantities have experienced double-digit declines. The repercussions are especially severe in the most critical export market: Italian manufacturers have faced an 11% drop in quantity and a 7% decrease in value in the USA, where the average price per liter had risen by 5% to €5.19. Although Russia paid 7% more per liter, it did not spend more than €2.95. Switzerland reacted to an 8% price hike with a 9% decrease in sales (reaching €5.98/l).
The ten markets, which together account for 85% of total exports to non-EU countries, purchased 9% less wine in the first half of 2023 and spent 5% less, despite an average price increase of 4%. The sparkling wine segment suffered the most with a 13% drop in sales, while still wine sales decreased by 5%. Both categories saw a 4% decrease in value, but while the rise in sparkling wine prices corresponds to increased production costs (+10%), still wine prices have only been adjusted by 1%.
Fighting dumping prices
Lamberto Frescobaldi, President of UIV, cautions manufacturers against driving down prices and cites Germany as an example. "We understand our companies' desire to maintain their market share, but lowering prices – such as with the large red wines in Germany, which are approaching Spanish prices at around 50 cents per liter – could become a dangerous boomerang once we have overcome the purchasing power crisis. This also affects our competitors. In this context, the increasing prevalence of private labels and the bottling of our wines outside of Italy contribute to the erosion of added value," says Frescobaldi. VC
