GAJA: “2007 GRAPE HARVEST IS THE SCARCEST EVER”. THE OFFER INCREASES, CONSUMPTION FALLS, CLIENTS WHO “PAY AS THEY WISH” ON THE RISE… REFLECTIONS ON THE NECESSITY OF RECTIFIED CONCENTRATED MUST. CONTROLS TO DISCOURAGE THE MULTIPLICATION OF WINE

Below, is the publication of the discussion “The 2007 Harvest: the scarcest ever” by Angelo Gaja, one of the most authoritative winemakers in Italy.
According to Gaja, “The 2007 harvest has topped all predictions. Though exact data will not be available until the beginning of the new year, it is now almost certain that Italy will produce about 40 million hectoliters of wine, a decrease of about 20% in respect to the 2006 harvest. So little wine has never been produced before in Italy. As for the quality of the wine, it is still early to discuss it but a general optimism prevails among producers”…
What weight should be given to the estimates for the quantity of wine that will be produced in Italy in 2007?
During the two months preceding the harvest estimates on wine production were clamorous, although still provisory and largely depending on weather conditions that continue to have influence up until harvest time. They are similar to the “primizie” (the first seasonal products to appear on the market), goods that nourish the impatient. If one tries, instead, to ask a winemaker to make a forecast for harvest quantity a month before the harvest it is probable that he will remain prudent until the end, knowing that various factors and unforeseen occurrences could change estimates; because he remembers the surprises experienced during harvests that had already begun and during which the quantity of grapes “grew” or “decreased” in respect to the values that had been predicted after a year passed among the vineyards.
Predictions of grape and wine production are useful but the differences can reach up to 15%. This is high and must be kept in mind.
What factors have influenced such a notable fall in production?
It is well known that it was due to drought, the hot and windy days in the north and center that dried up the grapes, the African heat in the south that was accompanied by difficult outbreaks of downy mildew in Sicily.
How necessary was it this year to use Rectified Concentrated Must (RCM)?
With the goal of the authorization to obtain public funding which would then trigger the production of RCM, the estimates anticipated for harvest production did go into effect. The invocation of an “unfavorable” year was called by all regions in Italy. And these are the conditions that put in motion the production of RCM. Successively, the predictions for surplus production were withdrawn because of the scarcity of the harvest and it became apparent that the alcohol levels were already high in wines and they often did not need any corrections. It is presumed that RCM has remained in large part unsold or unutilized in wineries for the reasons it had been destined for. Since it is a product that is hard to conserve, what will happen to the RCM that was produced this year? How much was produced? How much was the total contribution made by the State for its production? Is a Grillo or Gian Antonio Stella necessary to call attention to the use of public funding, and to demand an account of it? Is there the risk that the RCM that wasn’t used will be put to improper use?
Was there a fall in production only in Italy or in other countries as well?
Australia had already registered a sharp decrease six months ago. Almost exactly the same as other New World countries as well as almost all countries in Europe.
What effects will the 2007 harvest have on the market?
It will produce a beneficial rebalancing of both the national and international wine market. In Italy, grape prices have risen. The price of bulk wine will increase in 2008. It is inevitable that these increases will have repercussions on wine bottle prices. But not all of the markets will absorb them in the same way. On the Italian market there is a very confusing situation: the offer is growing, the consumption continues to fall, clients who “pay as they want” are also increasing. These clients who decide the price are, at this point, an open wound. Giacomo Bologna has sarcastically suggested that for clients who are known not to pay it would be best to adopt a conciliatory technique: ‘give them a great discount immediately, so less is lost afterwards’. As for Italian wines that are sold to the public for less than 3 euros per bottle, it will become impossible not to ‘correct’ prices. For this price range, we will see an increase in the offer of foreign wines. For wines that are sold in the high price ranges, price adjustments will be more gradual and largely diluted over time. On foreign markets, Italian wines that are sold in the lower price ranges will feel strong competition from New World wines. Italian wine, thanks to the competency of our entrepreneurs, is very competitive in the 3 to 10 euro per bottle price range and we are also strong in the price range immediately above this (where price adjustments will also be made gradually). And, anyways, countries competing with Italy will be obliged to increase prices because 2007 wine production was lower for them as well. It is well known that the weakness of the dollar is not favorable for us. If this continues, our entrepreneurs will be called to push their capacities to the limit. A red light would go on in 2008 if Italy should have to repeat another hot, dry and scarce year.
Controls?
In 2008 it will be even more necessary to have activated controls to discourage the undisciplined fall into the temptation of multiplying wine. The wines that are most at risk are those that have a high demand on the international market, those that should be most highly controlled so that these incidents continue to be less tolerated”.
Angelo Gaja