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THE SCENARIO

Beyond harvest estimates: from market to regulation, all the knots to unravel for wine

Climate change, declining consumption, the “anti-alcohol lobby”: reflections from the heads of Unione Italiana Vini - Uiv, Assoenologi and Ceev
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A moment of the grape harvest in Sicily, on Mount Etna

The difficulties of the market, in Italy and in the world, climate change, the structural decline in consumption, the strength of the “anti-alcohol” lobbies that threaten to undermine the wine system and not only (starting with the Irish regulations), the “Italian vineyard” to be modernized to make it perhaps less productive in volume and more in quantity and profitability, the DOC system to be rationalized, the regulations to be completed, from the issue of the national sustainability certification standard that has been “in its final stages” for years but stopped, to the one on alcohol-free and low-alcohol wines, already framed in the EU and implemented by many EU countries, but not by Italy: going beyond the estimates of a 2023 grape harvest that, according to data from Unione Italiana Vini - Uiv, Assoenologi and Ismea, at the national level will be on 44 million hectoliters, at -12% compared to 2022, but with a good and growing situation in the North (which will produce two-thirds of the 2023 wine) and a sharp decline, in the rest of Italy, hard but sustainable in the Center, with -20% in Tuscany and Lazio and -25% in Marche, far more substantial and dramatic in the South (where the profitability of vineyards and the value of wines is already lower on average), from -30% in Sicily and Puglia to -40% in Abruzzo (details Region by Region in the focus). There were many issues put on the table by representatives of the supply chain, Italian and European, in the Cavour Room of the Ministry of Agriculture, with Minister Lollobrigida absent due to other concomitant institutional commitments, as part of the presentation of the 2023 grape harvest forecasts.
“The sector is experiencing a situation in the clear dark”, said Lamberto Frescobaldi, president of Unione Italiana Vini and at the head of one of the most important companies in Italian wine as the Frescobladi group, “but the sector has to look ahead with calmness and entrepreneurship. The certainty this year is that we have put the agronomist back at the center of the vineyard, because with the complex weather pattern since the end of spring we have seen which wineries were the most prepared, with more means at their disposal to protect the vineyard. There will be less production, but the quality is all there to date. Because, let’s remember, everything can change in the coming weeks, the forecast tells us that rain and hail will come, and let's hope they are wrong. But this lower production, which I hope will be confirmed at the end of the harvest”, Frescobaldi provoked, “has taken away from us this wooden medal of European production supremacy, which, however, was not in value. We gladly leave it to France. We have to work better so that they increase the unit values of the grapes, because there is a part of the vineyard whose work is not remunerated, and if you do not pay the vintners well, they abandon the vineyard. Also, the average size of a farm in Italy is 2 hectares, in France 7 hectares, and we need to work on this aspect as well, because larger sizes allow for better investments and technologies. But first of all, grape prices need to be raised, especially in those areas of Italy where until April-May there was talk of distillation, overproduction, too much stock. And we can do it," Frescobaldi said, responding to WineNews, "because the range that has grown the most over the years is the 6 euros per bottle ex cellar, so the margins to pay a little more are there. But it is a fact that we can no longer afford 50 million hectoliters vintages, they are an anachronism. China is also producing wines and exporting them, as is India, and South America is also catching up. We need to have lower production, in favor of quality, and this tells us how important the issue of yields per hectare is, which is a sore point. There are areas with large yields that they know how to manage in the market, however, and others where excesses are created that then cause values to plummet. One way to eliminate surpluses may be distillation, as in France. Welcome, though, if combined with other actions, such as lowering yields. Then crisis distillations can be done if they are needed, but today the consumer and citizen badly accept that public money, which is lacking for basic services, be used to destroy what is not needed. We also need to work better on the promotion front, which is very important: we have made great strides, we started uphill compared to France, which, let’s remember, had centuries of colonial empire to establish the market for its wines. But we need planning, which we do not have today, and that is also linked to production volumes. And this”, Frescobaldi continues, “calls into question another issue: we need to renew the “vineyard Italy”, which is too old. And it’s good, and it’s nice, that there are thousands of varieties, but not all that glitters is gold, because then few go to market. A vineyard with the right rootstocks must be thought of, but also with mechanizable planting distances, because there is more and more difficulty in finding labor, and it is also an issue related to the changing population. France is much more mechanized than we are, yet it is considered the best in quality. The speed with which treatments are done, for example, is critical to quality. Then there is the issue of Denominations: of the hundreds we have, in Italy, 20% produce 72%, so, let’s keep this fragmentation that is an asset for the country, but let's also make macro-areas that can make aggregation, perhaps making some small Denominations become sub-areas of larger areas”.
Words that sound like a programmatic manifesto on the future of Italian wine, which also passes through two other not insignificant issues. “That of “low alcohol” and alcohol-free wines, which the EU has already legislated, with rules that other EU countries have implemented, but Italy has not. “And whether we like them or not, whether the Ministry likes them or not, they are products that exist, that the market is asking for, but on which Italian producers cannot play on equal terms with their competitors”, said Uiv secretary general Paolo Castelletti, “and they are forced to go and produce or buy abroad, leaving added value out of Italy. Let’s normalize them, even in Italy, let's give operators the chance to seize this opportunity”.
And last but not least, according to Frescobaldi, there is the issue of sustainability: “clarity is needed, our sector is the most controlled, and that is fine, because controls have given value to territories and wines. We need a systemic tool. We made the regulation on the single national standard, first in the world, but it is an unfinished business: the famous Ministry logo still does not arrive, let’s take this reform to the end. The public outside is confused, they have been bombarded by biodynamic, organic, sustainability, and to get respect from consumers we need a clear message, and we need the institutions and the Ministry to help us communicate more clearly”.
Important points, joined by those of Assoenologi president Riccardo Cotarella: “I rejoice because we are losing production primacy, I am in the heart to the French, where distillation is structural because there has been too much production for years. Reasoning about reducing production is not belittling the work of producers. In our industry there is a lot of imagination, a lot of philosophy, but we need entrepreneurship, because if the product does not sell, the producer suffers. Not other categories in the supply chain, but the producer. All protection consortia can contain production by lowering yields, looking at the relationship between inventories and market trends. Others, such as Bolgheri, Chianti Classico, Barolo, Montalcino, have stopped vineyard growth, for example. But this is not the case everywhere: we still look at quantity, and in many areas there is carelessness. More grapes means less quality, and that applies to all grapes. But what affects it most is that if stocks are high, the price goes down. Let’s make this wine lack, sometimes”, Cotarella said, “to raise prices. Sometimes grape and wine prices are so low that they offend the work and dignity of producers and winemakers. Coming to the harvest”, said the president of the enologists, “this year the role of the technician came out: we are also men of the vineyard, not only of the cellar. There are neighboring vineyards, this year, with 60 hectares burned by downy mildew and 10 hectares that are beautiful because they are treated differently. The further we go, the more science is needed in the vineyard, there is no escape. The quality of Italian wines has grown so much, there has been a profound renaissance compared to 30-40 years ago, where a few families made great wines in Tuscany and Piedmont, and little more. Today this is not the case, great wine is made from Aosta to Pantelleria, thanks to new knowledge, local grape varieties and the work of technicians. But quality is done with a serious program, which we do not have, because we are still going in short order, sometimes even against each other. We can still grow”, Cotarella said, “but it is useless to bliss in fat years and complain in lean ones. We need long-term, entrepreneurial reasoning. We need preparation. Climate change has not harmed us; in recent years we have produced the best wines ever. All the great Italian grape varieties, Sangiovese, Nebbiolo, Montepulciano and so on, are late ripening. Often in the past rain and mildew would come in October; today's earlier ripening allows us to do much more quality. The problem with the vineyard is not the temperature, but the UV rays, so we also discuss how to change planting techniques, for example. But above all, let’s think about one thing in these complicated times: wine has always been saved in the end, and it will be saved again”.
Still, there are many unknowns casting shadows on the sector, as explained by Ignacio Sánchez Recarte, secretary general of Ceev - Comité Européen des Entreprises Vins, who also outlined the European and world harvest estimates. “Looking at the 5 main EU countries, Italy, France, Spain, Germany and Portugal, we estimate a drop of 10.5 million hectoliters overall, mainly due to Italy’s decline and Spain’s strong one, at -12%, on 36 million hectoliters, while France, with 45 million hectoliters, is more or less in line with its average, as is Germany, on 8.8 million hectoliters, while Portugal is even up +8%, at 7.8 million hectoliters. But there are major production declines in the rest of the world as well: -21% in Argentina (9 million hectoliters), -13% in Australia (11.1 million hectoliters), -22% in New Zealand (2.9 million hectoliters), -6% in South Africa (9.5 million hectoliters), while Chile is growing slightly, at +1.3% (to 12.6 million hectoliters). But more than numbers”, Recarte stresses, “there are three “swords of Damocles” over the head of the wine sector: climate change, which is increasingly difficult to control and to which we must adapt, also spending well the EU funds that are there; the decrease in consumption, which is not only linked to inflation, but also to the new generations, their uses and new trends, which see wine less present. It is not a question of price, if a 25-year-old is willing to pay 10 euros for a gin and tonic, which has much lower production costs moreover than wine, this is well understood. And then there is the work of the “anti-alcohol” groups, as the case of the label with the “healt warnings” in Ireland shows, and the most dangerous factor, because if the message goes out that any level of alcohol consumption is bad for you, if a “tobaccoification” of wine and spirits materializes”, Recarte explained to WineNews, “there is a risk of collapse not only of the reputation, but of the whole regulatory, legal and support system for the wine supply chain”.
Reflections that came after the presentation of data that, recalled Ismea’s Extraordinary Commissioner Livio Proietti, “are not certain, but forecasts, which are always a fairly slippery field. The grape harvest has already begun and we can give fairly reliable data, but hoping that nothing disastrous happens, and we know that the climate can change a situation that today, however, appears consolidated. Certainly we have had an exceptional year from a climatic point of view, with an 80%increase in rainy days in some areas, concentrated at the times when treatments against phytopathologies had to be made, downy mildew in primis, which hit especially in the Adriatic area, in Abruzzo in particular, where there were completely unproductive vineyards. The national production drop will be a little over -10%, so France, which has had fewer problems, will surpass us in volume, but, as said, this is not an alarming figure. The problem is the market, which is not running: we have stocks in the cellar equal to a vintage, and there could be tensions both on the consumer market and on producer prices. The challenge is innovation: we have vineyards that are in some cases too old, harvesting techniques to improve, risk management in agriculture to refine, and we need to work on these aspects”.

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