ITALIAN WINE BASED SPIRITS: ITALIANS ARE DRINKING LESS (-10% IN 2011 OVER 2010), SO COMPANIES ARE RELYING ON EXPORTS OF GRAPPA, SYMBOL OF MADE IN ITALY SPIRITS, +18% BOTTLED AND +37% BULK

Wine based distilled spirits in Italy: Italians are drinking less (10% less in 2011 compared to 2010), and companies are turning to exports, says Assodistil, the National Association of Industrial distillers of alcohol and other spirits. "The world is changing, especially in recent years”, said the president, Antonio Emaldi, “and today the spirits industry is faced with an aggressive global system not willing to help those that find it hard to adapt”. The sector of alcohol beverages distilled from wine showed a significant reduction, while grain alcohol instead is increasing all over Europe. This is not new to Italy: in recent years the top alcoholic production item is from grain, followed by products from viticulture. Overall, in 2011 in Italy 833.000 ettanidri of alcohol were produced, 16% less compared to 2010, and 192.800 ettanidri of viticulture origin, 16% less.

Wine based spirits, a segment in which Italy is the European leader together with Spain, is still the leading voice in export volume even though it is down 30% compared to 2010. Fruit based spirits instead, increased (+67%).

Grappa shows signs of change, too: despite reduced volumes (11%) and its consumption and strong ties to the territory of origin, the distilled beverage, symbol of Made in Italy, has now entered the "good parlor” of agro food and catering, cementing its reputation as a cultured and refined product for demanding consumers. The data show an excellent performance in exports: in 2011 exports of bottled brandy increased 18%, while bulk increased 37%. The most interested markets are the United States, Brazil, China and to a lesser extent, Russia.

From a structural standpoint, the Assodistil data describe a highly concentrated sector: the top 10% of producing companies, including high-end production, holds 64% share of production. And the top ten companies for sales volume boast over 60% of the market share. The vast majority of enterprises are micro and small companies that, despite low-volume production (below 1.000 ettanidri), represent the history and are the symbol of this sector.

The issues that concern the producers most are both structural, such as the advance payment of excise duty together with a penalizing tax burden, and tax measures that are likely to come into force soon, like new taxes and VAT increased to 23%.