Growers in Spain’s Valdepeñas DO are to recommence the harvest after leading Castilla La Mancha wine producer, Felix Solis, decided today to reverse a decision to cut grape prices by 30% for most grape varieties. Growers halted the harvest this week to protest against prices, which they said had fallen below their production costs and had threatened to continue strike action for a fortnight.
“We have accepted the decision to raise grape prices, (other than Airen), by 27%. All growers will return to harvest by Saturday,” Arturo Serrano, technical director at grower organisation, ASAJA told Meininger’s.
On Thursday, around 200 growers on protested outside the Valdepeñas DO’s offices, during a board meeting, which later in the evening led to the U-turn on grapes prices, following the intervention of local authorities.
Castilla La Mancha wine companies have been grappling with the impact of Covid-19 on demand and market uncertainty. Eighty percent of the DO Valdepeñas wine is sold off-trade in supermarkets, rather than the bars, hotels and restaurants, where wine sales have collapsed. However, the DO wine board reported only a slight increase of 1.48% in sales in the first eight months of this year – that is despite a 11% rise in overall Spanish DO still wine sales in the first half of the year according to the OEMV, the Spanish wine market observatory.
“Sales have been a flat with nominal increases between the start of January and end of July this year,” said a spokesman for Felix Solis, the biggest producer in Valdepeñas.
“There is a real concern and uncertainty for the forthcoming months together with the restrictions on hospitality in Spain, with nightlife shut down and much less tourism; the impact of this situation has yet to be reflected in sales.”
Grape price disputes have arisen in several regions of Spain including Extremadura. Faced with a bumper crop, numerous Spanish wine companies have complained that EU aid measures including green harvesting, distillation and storage, have failed to resolve a widening gulf between supply and demand.
In Catalonia, big Cava companies are paying the same grape prices – as low as €0.30 per kilo – as last year.
“Sales of cava in the Spanish market have fallen dramatically. These sales depend a lot on tourism,” Pere Ferrer, Vice Chairman of Henkell-Freixenet said in an interview with www.elmon.cat on August 25th. Ferrer said the company had decided to buy the same volumes of grapes as last year.
Joan Santo, head of wine at grower union, Unio de Pagesos, told Meininger’s some Cava companies had decided not to buy grapes this year. “The buying market has been reduced. The harvest has not started yet in parts of Catalonia; there is no knowing how many grapes will be sold,” he said.
Meanwhile, in Rioja, Pernod Ricard’s AGE vineyard has agreed to buy grapes from growers over a two-year period, but at prices lower than the production costs set out by the local authorities. Rioja’s regional government announced, on July 27th, a €112m ($132m) grape-buying finance loan scheme for producers.
A snapshot of exports
During the first half of 2020, bulk wine exports became the hardest hit among the Spanish wine export categories, falling by 17.7% in volume, according to the OEMV. Castilla La Mancha accounts for almost two-thirds of Spain’s bulk wine production.
Catalan wine and cava exports fell by 13.55% in value and 5.49% in volume in the first half of 2020, according to the Catalan government. Despite a slight increase in June, total Spanish wine exports fell 11.6% by 124.1m litres to 946.4m litres during the first half of 2020, compared with the first half of 2019. Over the same period, the value of Spanish wine exports fell by 7.1% by almost €91m to €1.19bn, the OEMV said. Spanish government figures show a sharp 31% increase in bag-in-box wine exports and an 11% increase in Spanish PDO still wine sales in the Spanish off-trade during the first half of 2020.