Lower yields and production, simplify promotion: the “plan” of Unione Italiana Vini

Overcoming the unfavorable economic situation, hoping that the situation in the US regarding tariffs will be resolved as soon as possible, or at least improve, by suspending the granting of new authorizations for vineyard planting for one year, but also implementing a structural reform of Italian wine, intervening on legislation, starting with an update of the 2016 Consolidated Wine Law, to reduce production and keep pace with times when consumption is falling, and an excess of product would be very costly to manage, not to mention the risk of a collapse in prices. First and foremost by lowering yields, but also by intervening in the designation system (529 between PDO and PGI, with the top 20 accounting for 80% of Italian wine), merging and rationalizing them. But also by intervening on the production front, modifying and simplifying the decree that gives access to the CMO Wine resources that Europe allocates to Italy. This is the outlook outlined by UIV - Unione Italiana Vini, an association with over 800 members representing 85% of Italian wine exports, and presented today at a meeting in Rome to the Minister of Agriculture, Francesco Lollobrigida, and the Minister of Economy, Giancarlo Giorgetti, among others (with greetings from Federico Bricolo, president of Veronafiere, and Matteo Zoppa, president of Agenzia Ice), who responded by offering an opening for discussion to meet the needs of a sector that, it was recalled, in addition to feeding thousands of businesses and jobs, is a symbol of Made in Italy, with great economic, social, environmental, and image value for the country.
“In a complex scenario, the sector is called upon to raise awareness. Unione Italiana Vini is calling on the sector to come together and launch a plan to revise the Consolidated Wine Law, in line with the current market situation. The goal is to update the law and its implementing decrees by 2026, 10 years after its entry into force”, said Lamberto Frescobaldi, confirmed as president of Uiv, who added: “given the decline in global consumption, we can no longer afford to flood the “Cantina Italia” with harvests of 50 million hectoliters, which represent the average production of the last 25 years”. The theme of potential, together with that of the market, was the focus of the Uiv Observatory, presented by Carlo Flamini.According to the analysis, the first five months of this year saw sharp declines in consumption volumes in all four major markets (Italy down 1.8%, the United States down 4.7%, the United Kingdom down 3%, and Germany down 9.6%), which together account for 73% of Italian wine companies’ turnover. Retail sales fell by 3.4%, rising to -5.3% for still/sparkling wines (+4.9% for sparkling wines). In this context, which affects all producing countries, Italy is, however, the only one to see an increase in its vineyards and, therefore, its potential. According to the Observatory’s estimates, a 2025 harvest of 50 million hectoliters (a hypothetical figure, but in line with the recent historical average), combined with a lack of demand, would result in a quantity of approximately 90 million hectoliters in the cellars next October, the equivalent of almost two harvests. This is an unsustainable situation at this moment in history, which would lead to a real reduction in estimated potential values of around 5.3%, or more than half a billion euros in negative balance between 2025 and 2024, and a double-digit decline in the average price of production value.
“The problems were there even before”, added Frescobaldi, “but we were “saved” by two exceptionally low harvests compared to the average. Now we need to be humble and produce 7-8 million hectoliters less to maintain control of one of Italy's most profitable assets in our trade balance”. According to Uiv, the corrective measures that need to be implemented urgently relate to the entire sphere of supply and demand management in the supply chain. Starting with the reduction of grape yields per hectare, including the end of exemptions for generic wines (maximum 30 tons per hectare, added Frescobaldi), aligning the yields specified in the regulations with the actual yields over the last five years, with a simultaneous review of the mechanism that allows surpluses for PDOs (20% reduction or elimination), revising the reclassification mechanisms, updating the timelines for adopting production management tools, and halting new planting authorizations for one year. And also the reorganization of the appellation system itself, starting from the consideration that the top 20 appellations represent 80% of Italian wine volume, which means that a disproportionate number of DOC/IGT wines (there are 529 recognized ones) exist only on paper. “This anomaly must be resolved through a system of consolidation and territorial reorganization for each region”, said UIV Secretary General Paolo Castelletti, “a process that should certainly be developed by individual territories, but which, in our opinion, could be encouraged and coordinated at the national level by the National Wine Committee, whose powers, established by law, should be updated in the Consolidated Law”.
Unione Italiana Vini’s project is therefore one of profound change for the future of a sector that is historically virtuous and strongly family-oriented (65% of net assets are held by families), but which in recent years has shown a decline in EBIT margin (to 6.2% in the 2023 consolidated figures), as revealed in the 2025 Report on the Wine Sector in Italy published by Mediobanca’s Research Department a few weeks ago, and discussed in detail at the meeting by Oriana Romeo, Senior Analyst at Mediobanca’s Research Department. It highlighted how, among the main challenges identified by the sector, including through interviews with a panel of companies accounting for 94.9% of the sector’s turnover, the reduction in consumption (72%) is slightly ahead of the other major unknown: tariffs (66%). It is no coincidence that the main lever for responding to the trade impasse is opening up to new markets (77%), but also new investments in human capital (56%) and the development of non-alcoholic and low-alcohol products (50%). According to Mediobanca, this sector, which is also more capital intensive in structure, is less profitable than neighboring sectors, as evidenced by the difference in return on investment (ROI), which stands at 5.4% for wine compared to 8% for the food sector and 9.9% for beverages. Tuscan companies have the highest EBIT margin (16.4%), while Abruzzo companies have the best ROI (7%), with Piedmont in second place (6.4%). The largest exporters are Piedmontese producers (63% of turnover), followed by Tuscan (59.5%) and Abruzzo (58.7%) producers.
Clearly, however, in addition to the structural issue, there is also the cyclical issue, where much attention is focused on the issue of US tariffs, on which the EU and Italy are awaiting news on July 9, as announced by President Trump, while diplomatic negotiations continue. And while in recent days some, such as Minister Giorgetti, who reiterated this today, had emphasized that, while hoping for a zero-tariff solution, maintaining the current 10% without further increases would already be a good result, Unione Italiana Vini does not agree. “Even with tariffs at 10%, it will be a problem for the sector”, added Castelletti. “We found this in a survey of companies, which estimate a 10-12% loss in overseas sales. We need a more united Europe to be strong and accelerate the signing of free trade agreements. We cannot talk about “diversification of outlets” and then hesitate on important choices such as Mercosur. If it is difficult today to access a very receptive market such as the US with a 10% tariff, how can we export to complex markets such as Brazil or India, which have tariffs of 27% and 150% respectively?”.
As mentioned, in terms of promotion, companies are calling for the implementation of the measure to be aligned with social changes. From this point of view, fundamental aid for promotion in third-country markets should be more focused on more structured and impactful projects. A revision of the OCM Promotion Decree should further simplify the rules for access and financing. This view, held by those representing businesses, is partly shared by politicians, but in a complicated context. And while positive news on tariffs is expected any hour now, even if an agreement is reached, it will be a general agreement and not a detailed one, as Alfredo Conte, deputy director general for International Trade Policy at the Ministry of Foreign Affairs, pointed out, it should be borne in mind that “we are in a year zero of the geopolitical order, it is as if the Berlin Wall had fallen yesterday, or if the USSR had dissolved today”, said Andrea Cangini, secretary general of the Luigi Einaudi Foundation, and that it is difficult to understand what will really happen on the tariff front which, as recalled by Mario Baldassarri, economist, university professor, and former deputy minister of the economy, “in the economic theory shared by all, tariffs are a negative-sum game, both for those who pay them and for those who impose them”.
Looking to the future, the first thing to do is not to give in to what Minister Francesco Lollobrigida has called “depressionism”.“It’s not good for anyone. It’s true that recent data isn’t great, but we’re coming off a record year for wine exports worldwide in 2024”, said Lollobrigida, “and the long-term trend is positive. We need to engage in dialogue with the US, as we are doing, with the government, which is also making a major contribution to the EU, but the decline in consumption in the US is not so much linked to tariffs as to the demonization of wine, which is happening all over the world. We need to think strategically, defending the CMO in the EU as we have done, or working with the supply chain as we have done on dealcoholized wines, to give the sector an extra chance, but protecting PDO and PGI, for example, and on this we are working with Giorgetti to speed up interministerial decrees so that production can really get underway at the end of the summer. We must differentiate markets, of course, but we cannot think of abandoning the historical ones, with the US at the forefront. And we must also manage our internal issues. Italy, for example, does not support the policy of uprooting vineyards without a prospect of conversion: farmers and winegrowers, in particular, are the primary guardians of the land, and if vineyards are uprooted without conversion, it means abandoning the land. We need to think about a different, medium- to long-term model. Many things are changing in Europe, and it is always positive to think things through, but we strongly disagree with a change in the CAP that is not primarily aimed at production, that returns to negotiation with Member States, and that perhaps converges into a single fund from which resources could be withdrawn to deal with other contingencies”.
There are many complex issues, such as the complex issue of US tariffs, as Economy Minister Giancarlo Giorgetti pointed out: “Your sector is important for Italy, it is a sector of excellence, and all in all, it is doing better than others. But the issue of tariffs is complex. It is not just about tariffs tout court, which involve many other goods, but also about general taxation, financial and monetary relations, and VAT, which Americans simply see as a tax. In short, it is a very, very complex issue. It is obvious that we are all aiming for ‘zero tariffs’, but even if no one likes it and it does not favor anyone, I believe that 10% tariffs, given the context, would be an honorable condition, taking into account that companies pay the highest price when there is uncertainty such as that which reigns now and which will probably continue for a while longer”.