WINE COMPANIES ARE AMONG THE HEALTHIEST IN THE SECTOR, THANKS TO RECORD EXPORTS (5.6 BILLION EUROS), RECOVERY OF THE DOMESTIC MARKET (+ 1%), AND VERY LOW DEFAULT RATES, REVEALED CRIF RATINGS OBSERVATORY - WINE MONITOR NOMISMA

Italian wine has just closed a highly positive 2016, with a new record in exports, 5.6 billion euros in value (+ 4.2%), and a slight recovery on the domestic market - 1% increase in sales value in supermarkets. Consequently, from a financial point of view wine companies in the sector are healthy, and default rates are well below the average of the national agricultural sector, revealed the latest joint analysis of the Observatory CRIF Ratings - Wine Monitor Nomisma, which compared the default rates on bank loans, substandard loans (better known as "Basel past due 90") and public ones (derived from bankruptcy or jeopardizing procedures).

The comparison is certainly flattering to the Italian wine world considering that in 2016 Basel and public default rates in the wine sector were respectively, 2.8% and 0.5% - well below the average values of companies in the domestic food & beverage sector of 3.6% and 0.7%.
Furthermore, the risk level of the fund continued to shrink in 2016, as evidenced by the decline in Basel default (from 3.9% in 2015 to 2.8% in 2016), which is much lower than pre-crisis standards (2007-2008). Public defaults have now stabilized around 0.5% (2016 and 2015), at a level roughly in line with the findings of the first difficult years of the economic crisis, after a peak period that consequently fell due to monetary policies implemented by the European Central Bank.

Regarding credit risk, the joint report warned that the relationship between financial insolvencies and market dynamics requires careful reflection on the business focus and the ability of enterprises to change their offer. Geographic markets, sales channels and product supply are all important elements to assess the credit risk of companies in the industry, and from this point of view, the uncertainty surrounding both the United States of America and the United Kingdom, both essential market for Italian wine companies, is at least potentially worrying...