Spain's wine import market collapses

Spaniards were buying small, but significant quantities of imported wines. That demand is now over, finds James Lawrence.

Photo by Mary Rebecca Elliott on Unsplash
Photo by Mary Rebecca Elliott on Unsplash

The Covid-19 pandemic has severely impacted the demand for imported wine labels in Spain, according to a range of stakeholders involved in the market.

Historically, Spanish consumers have overwhelmingly favoured domestic brands over foreign labels, resulting in a negligible market for imported wine.

Yet according to data released by the IWSR, the import market has grown by 8% over the past five years (CAGR 2014-2019), with tourism being a key driver. Italian brands (mainly Lambrusco and Vermouth) were driving this growth, in addition to an expanding number of French wines.

“As has been witnessed across most major wine markets, Covid-19 has provoked a pivot towards local or regional wines,” said Daniel Mettyear, research director at the IWSR.

“There is now the expectation that imports will struggle in the near term in Spain, particularly as tourism may remain below full capacity for some time.”

Before the global pandemic struck, Austrian producer Alzinger was making good progress in expanding their distribution in the Spanish retail and hospitality sectors. Unfortunately, all their hard work has been significantly set back.

“Our sales in the Spanish market collapsed in 2020,” said owner Leo Alzinger. “This is simply because their domestic industry can satisfy the current reduced demand – they have no need of imported wines.”

Portuguese company Garrafeira Soares has also suffered losses across several European markets – including Spain.

“Excluding Ireland, Canada and Luxembourg, all our export markets have shown declines,” said a representative from the firm. “There was a negative impact across the portfolio, especially in the premium references. However, we have sold good volumes of our Malhadinha Red Wine 2017. We have noticed an increase in demand for this product compared to 2019.”

Nevertheless, Alzinger is confident that the Spanish import market will rebound. “Due to our long-term relationship with our Spanish partner, we are confident that there will be an improvement as soon as the pandemic is over.”

However, Spain's economy has taken a strong hit from the Covid-19 lockdown, with restrictions severely impacting the health of the tourism and hospitality sectors. Analysts believe that the recovery could take years.

“Both of these vital industries have an important bearing on drinks market performance in Spain,” noted Mettyear.

James Lawrence

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