Viewing the global wine market in December 2021, supply-specialists Ciatti believe that consumer confidence appears relatively robust in many markets, despite the pandemic. Perhaps shoppers are able to draw on extra discretionary spending power accrued during two years of intermittent lockdowns/restrictions. But it would be misplaced to assume such bullishness will persist regardless of inflation, which is a growing story. The inflation rate in the US, for example, reached 6.8% in November, its highest since July 1982; in Germany it reached 5.2%, the highest since June 1992, and in the eurozone in general it was a record 4.9%. The European Central Bank has said this inflation is a passing “hump” that will decline next year; the noises from the US Federal Reserve have been less optimistic. Similarly, the UK’s inflation rate in November was at 5.1%, the highest since 2011, with the Bank of England expecting it to peak at 6% next year. It is a case of waiting to see which institutions are closer to being right in 2022.
As reported last month, another contributing factor to bulk market slowness is the global supply chain situation, with buyers switching to alternative sources of supply should transport links with their usual supplier no longer be workable in terms of time or cost. Longer shipping lead times can also inject speed into the marketplace, as we have seen with 2021 Provence rosé which – only just ready – is quickly being shipped to the important US market in order to ensure it arrives in time to retail there from spring 2022.
Looking ahead to that point in time, the vineyards in Argentina, Australia, Chile and South Africa all seem in good condition, with confidence of at least average-sized 2022 crops in each country, though – still three months away from picking commences – a lot can change in the meantime. Argentina, Chile and South Africa’s currencies have all weakened in recent months: Argentina’s economy is in trouble and the country’s central bank has finally acknowledged that the peso should be gradually devalued (indicators suggest the peso’s true rate is twice as weak as the official rate of ARS100/dollar).Chile’s general election (in which a run-off is to be held 19th December) has similarly helped weaken the Chilean peso past CLP800/dollar, while South Africa’s Rand, with its typical fluctuations, has softened significantly since May. Good harvests and weaker currencies suggest opportunities for the intentional buyer in these countries, but the global shortage of white varietal wine, means activity is likely to be brisk, potentially sending prices upwards. Ciatti recommends that potential buyers move quickly in the new year.
The gradual growth in the ratio of white wine consumption to red around the world has been such that, if short harvests affect white varietals (as was seen in both hemispheres in 2021), supply will struggle to meet demand. By contrast, red wines are languishing in some instances.