Between harvest estimates and struggling markets: the scenario Unione Italiana Vini (Uiv) & Vinitaly

The 2023 grape harvest is slowly taking shape, amid the many uncertainties related to the weather and a market that does not soar, as much in Italy as in exports included, and with so much wine in the cellar, almost a whole vintage, as WineNews has reported in recent days. And as reiterated now by the Uiv & Vinitaly Observatory, which has processed data from the Ministry of Agriculture’s “Cantina Italia” on stocks and numbers on sales in third countries, relating to the first half of 2023, according to the latest customs surveys. According to Uiv & Vinitaly analysis, the 2023 vintage opens with a wine cellar stock of 45.5 million hectoliters, the equivalent of more than 6 billion potential 0.75/liter bottles. The figure reflects a surplus of 4.5% over the same period 2022 due in particular to an unprecedented increase in stocks for the highest quality wines, with PDOs at +9.9% over the last pre-sales 2022 survey. “The other market indicator”, the Observatory adds, “is also complicated, with non-European demand reported in the first half of the year in further contraction. Among the top 10 buyers, which together account for 85% of the non-EU market, volume exports are positive only for the Russian destination, with double-digit quantitative declines for the United States, Canada, Japan, Norway, China and South Korea. Overall, the trend reduction in the first half of 2023 marks -9% in volume and -5% in value, with sparkling wines down 13% and bottled still wines nailed at -5%. For both types, the trend in value indicates a 4% gap, but while for sparkling the increase in average price is in line with the surplus in production costs (+10%), the same cannot be said for still wines (+1%)”. Lamberto Frescobaldi, president of the Unione italiana vini (Uiv), explains that “the next harvest, whose feared sharp contraction is yet to be verified, is being weighed down by an economic situation that is manifesting itself in all its complexity. We understand the desire on the part of our companies to maintain market share, but lowering prices, as, for example, with bulk reds in Germany, which are falling toward Spanish quotations at 50 cents/liter, risks becoming a dangerous boomerang once out of the purchasing power crisis that also involves our competitors. In this regard”, Frescobaldi says, “the growing phenomenon of private-label products and bottlings of our wine outside Italy are contributing to the erosion of added value”. The most important issue, then, is not whether more or less wine will be produced, but the market. “That of greater wine production is a record that we gladly leave to France. Our real fear right now”, Frescobaldi said again, “is that the Italian production decline will ultimately turn out to be less than estimated. That would be worrying because the 2023 harvest began with the highest level of stocks ever. It is as if we have one more vintage in the cellar. In short, it is not the wine that is lacking, but the market. General inflation has certainly penalized sales”, Frescobaldi adds, “because the reduction in the purchasing power of families has not favored a product that remains rooted in the culture and traditions of Italians, but today it is no longer an essential food as it was in the past for our grandparents. What’s more, the paradoxical aspect is that wine has resorted much less than other products to list price adjustments”. It remains more fundamental than ever, therefore, to invest in promotion as well, to reverse the trend, also thanks to the CMO funds that arrive from Europe, which, in recent years, have been fundamental in pushing the growth of Italian wine in the world, and which cyclically, between health pushes and skirmishes between EU countries, especially because of a difference in visions and needs between Northern Europe and the Mediterranean area, simplifying to the utmost, are questioned. “These are fundamental measures for not only Italian but European wine and must be revived. It should not be forgotten that wine sales abroad represent a significant slice of the GDP of both Italy and France”, Frescobaldi said again. And among the top players in the promotion of Italian wine in the world there is, of course, Veronafiere, with Vinitaly: “the Observatory had predicted a difficult 2023, this is occurring despite the fact that the global economy has for now kept away most of the recessionary clouds. What Vinitaly can do”, commented Veronafiere CEO Maurizio Danese, “is to intensify the building of commercial bridges with foreign countries, especially in relations with non-EU markets, starting with the U.S., where we will be a partner of the Chicago Chamber of Commerce for the International Wine Expo: from September to December we are planning a new internationalization campaign with 25 appointments in 15 countries and 4 Continents; on the one hand, to further refine the incoming for the next edition in Verona, and, on the other hand, to ensure business to business directly on foreign markets”. Meanwhile, the harvest goes on and the market prepares for orders for the end of the year, which has always been a very important time for wineries’ budgets. And on September 12, Assoenologi, Ismea and Uiv (Unione Italiana Vini) will release the harvest forecasts in Rome at the Ministry of Agriculture.