Grapevine & Wine 04/01/2010

Wine consumption may continue to decrease

Viniculture production in 2009 is however almost identical to 2008 levels but market demand also on the wine spirits and brandies market remains at previous level despite the crisis

According to initial estimations made at the OIV (International Organisation of Vine and Wine), the world vitiviniculture situation in 2009 continues to reflect the effects of the world economic crisis.

“Unless the volume of imports increases, world viniculture consumption in 2009 may, unfortunately, continue to decrease compared to 2008 levels. This decrease shall be due to a decrease in trade volume and the consumption of importer countries, affected by the crisis” declared Mr. Federico Castellucci, Director General of the OIV.

World wine consumption in 2009, will be situated at a very low level of the estimated mean (21,7 Mhl) but included in a mean between 11,3 and 32,1 Mio hl, that being 1,2 Miohl lower than levels recorded in 2008 (22,9 Miohl), due to the combination of maintaining world production at a level equivalent to last year’s level and an opening of the bottom of the estimated mean of world demand.
The 2007/2008 campaign combining weak production levels and a high consumption level, demonstrated a slight increase in table wine with no geographic indicators prices (eat that time with no indication of vine variety) for red / rosé and white wines. The situation particularly for the 2008/2009 campaign reflects a substantial drop in rates and this despite the new overall modest 2008 production, even if the relative price position is partially reflected by the very low 2008 production.
While market demand on the wine spirits and brandies market remains at previous level despite the crisis, industrial needs should « consume » the wine « production/consumption » difference of wine even at the high end of the estimated mean. Nevertheless, this does not signify, as is indicated every year, that in certain market segments or in certain countries, particularly in accordance with changes in rapid potential demand affected by the crisis, all wine prices should be strained.

World areas under vines have likewise recorded a slight drop in 2009. This decrease is predominately due to the reduction of approximately 75 mha of community vineyards following the implementation of the new CMO. The most important European viticulture countries have experienced reductions in their respective areas under vines in 2009.
The principle concerned EU countries are Spain (reduction expected close to 45,0 mha under the influence of the implementation of community regulations), Italy (11,9 mha), France (10,3 mha, following a return to definitive abandonment anticipated over 3 years on other Member states), Portugal (2,3 mha) and Hungary (1,5 mha).
The overall growth rate of areas under vines in the Southern hemisphere and in the USA has slowed compared to rates observed in 2000. This growth could come to a halt between 2008 and 2009. As such, between 2008 and 2009, Argentina and Chile may experience slight growth, Brazil and New Zealand, stabilisation on the level of their vineyards, while South Africa has experienced a decrease in planted surface areas under vines since 2006.
Moreover, the professional sector in Australia, faced with a difficult economic context, has examined the issue of a surplus in areas under vines. To be noted that between 2007 and 2008 Australian areas under vines have decreased slightly.

The 2009 world viniculture production, with close 268 million hl, is almost identical to 2008 levels.
In 2009, the European Union at 27 has recorded a slight increase of 1% based on an increase in production in France, Portugal, Romania and Bulgaria while other traditionally producer countries (Italy, Spain and Germany) have recorded decreases compared to levels reached in 2008.
The overall production of countries of Southern hemisphere / USA + Switzerland has likewise decreased slightly, generated by a drop in production in Argentina, Brazil and Australia despite positive results recorded in the United States, Chile and Switzerland.
In particular the USA recorded net progress in the growth of the 2009 wine production compared to the rather modest production level in 2008 (20,6 Miohl not including juice and musts, compared to 19,33 Miohl that being: +6,6%). This result was not obtained by growing production of fresh grapes but rather by apparent growth in a directing of a part of these grapes towards wine production. It is to be noted that table grape production and especially raisins are traditionally very important in this country.

“The world economic crisis has not spared the vitivinicultural sector, particularly wine consumption. In 2009, we experienced stagnating production with an overall decrease in demand” concluded Mr. Federico Castellucci, Director General of the OIV.

di Alberto Grimelli