27 DE mayo DE 2019
Ricardo Migueláñez. @rmiguelanez
The presentation given on April 11th, for the first time ever, by Pau Roca, the former General Secretary of the Spanish Wine Federation (FEV) and current General Director of the International Organization of Vine and Wine (OIV), on the global wine industry in 2018, offered several lessons and reflections.
Starting with an analysis of the world's wine production potential, which has been practically stable in recent years at 7.4 million hectares and which includes different kinds of vineyards (table grapes, raisins and grapes for winemaking), he does see a slight downward trend since 2014, especially due to the loss of winemaking areas during those years in Turkey, Iran, the US and Portugal.
Spain is a leader in terms of plant mass, which is as important as it is undervalues as an environmental impact on the area, with 986,000 hectares, but with mainland China starting to take over (little by little), with 875,000 ha and growing, even with the slowdown seen in previous years, by 1.2% and 10,000 ha in the last year, compared with 0.1% and barely 1,000 ha in Spain.
Even our two main rivals, France, in third place (789,000 ha, 0.2% and 1,000 ha more) and Italy, fourth in line (702,000 ha, 0.8% and 6,000 ha more) are growing, percentage-wise, more than Spain.
The European Union's vineyards, which span 3.3 million ha, remain stable in general, after declines resulting from the voluntary, subsidized plans to grub up vines between 2009 and 2011, and the roll out of a wine potential administrative management program, which limits the possibilities of annual growth of new plant by at most 1% of vineyard area of the preceding campaign in each country.
Europe is not growing in terms of winemaking area, but the situation isn't much better in other places. Although China is growing, that growth is slowing; Turkey is stable at under half a million hectares, and the US has seen a slight decline since 2014, with 430,000 ha. In the Southern Hemisphere, Argentina (219,000 ha), Chile (212,000 ha), Brazil (82,000 ha) and South Africa (125,000 ha) have reduced their plant mass, and only Mexico, with 34,000 ha, has registered a slight increase. In Oceania, both Australia (145,000 ha), and New Zealand (39,000 ha) maintain their potential with few changes.
Even with winemaking potential, wine production (excluding juice and must) in 2018 increased considerably, thanks to a strong improvement in productive yields, the second-best in the last two decades, with 292.3 million hectoliters, trailing only the record set in 2004 (298 million), with an increase of no less than 42.5 million (+17%) compared with 2017 which, in contrast, was historically very low, less than 250 million, and an increase in 21.4 million (+8%) more than the 270.9 million on average from the 2013-2017 period.
The fact that production the previous year was one of the lowest in history took pressure off the market with regard to yielding a strong supply during the last harvest.
Things would be very different if, during the 2019/20 campaign, production were similar to the 2018/19 campaign. Then it would make sense to think that there were market problems, which there aren't at the moment, despite the moderation in prices, which would have increased notably due to the lower supply in the last two campaigns.
There's no doubt that this high production is due to growth in the three main producer countries: Italy (54.8 million hectoliters), France (49.1 million hectoliters) and Spain (44.4 million hectoliters), as well as other producers such as Germany (9.8 million hectoliters), Romania (5.1 million hectoliters) and Hungary (3.6 million hectoliters), and also outside the EU, in the US (23.9 million hectoliters), Argentina (14.5 million hectoliters) and Chile (12.9 million hectoliters) and, in contrast, slowed by countries with lower production compared with the previous year, such as Australia (12.9 million hectoliters), South Africa (9.5 million hectoliters), and China (9.3 million hectoliters).
Southern Hemisphere: 2019
Pending information about the performance of harvests next fall in the Northern Hemisphere, the OIV has advanced on those this spring in the Southern Hemisphere, where slides across the board are expected due to high temperatures in summer, which will have impacted productive yields, and the drought that continues to impact South Africa. This is a positive factor for the global wine situation, since it puts less pressure on the market at the moment.
According to this forecast, Argentina will see a decline of 7.7%, to 13.4 million hectoliters; South Africa too, of 1.6%, (9.3 million hectoliters); Australia, -8.2% (11.8 million hectoliters); Chile, -18.6% (10.5 million hectoliters) and Brazil, -9.2% (2.8 million hectoliters). Wine production is expected to increase only in New Zealand, by 2.8% (3.1 million hectoliters) and Uruguay, by 0.7% (750,000 hectoliters).
Global wine consumption during the past year registered a slight decline, of 0.3% and 700,000 hectoliters on average, resulting in 246 million, mainly due to declines in China and the UK. However, the OIV suggests that this statistic is provisional, with the US leading the way in absolute terms, with 33 million hectoliters, i.e. 1.1% more than the previous year.
In Europe, consumption remains stable, with Spain increasing slightly, by 1.8% to 10.7 million hectoliters, in line with Portugal, Romania and Hungary, with France as the leading consumer country in terms of volume, with 26.8 million hectoliters, followed by Italy, with 22.4 million; Germany, with 20 million; and the UK, with 12.4 million, but with a decline of 2.6%. China, which saw growth in recent years, saw consumption slow by 6.6%, to 18 million.
In terms of per capita consumption (for people over 15), Portugal leads the ranking, with 62.1 liters, followed by France (50.2 liters), Italy (43.6 liters) and Switzerland (37.8 liters). Spain comes in 12th with 26.9 liters, behind Germany (28 liters) and ahead of Argentina (24.6 liters). Countries with noteworthy consumption include the UK, ranking 15th with 22.7 liter per capita; the US, 19th, with 12.4 liters; Russia, 21st, with 10.1 liters; Japan, 22nd, with 3.2 liters, and China, 24th, with 1.5 liters per capita.
During the last year, the international wine market (the sum of all exports) experienced a slight increase of 0.4% with respect to 2017, with a volume of 108 million hectoliters, while the value increased by slightly more, 1.2%, due to higher prices, to 31.3 billion euros, according to OIV estimates.
Spain continues to lead the ranking of exporters in terms of volume, with 20.9 million hectoliters, 19.4% of the global market share, despite a 2 million hectoliter decline with respect to 2017, followed by Italy, with 19.7 million hectoliters, France (14.1 million hectoliters), Chile (9.3 million hectoliters) and Australia (8.6 million hectoliters).
In terms of value, on the other hand, Spain ranks third, with 2.916 billion euros, 1.9% and 55 million more than in 2017; trailing France, which obtained 3.2-times more than Spain, with 9.336 billion euros, 2.8% and 253 million more, and Italy, with 2.1 times more and 6.148 billion euros, 3.3% and 196 million more.
Value is one of the main handicaps of Spain's wine exporting sector. We are a leader in volume at global level, but we are unable to leverage this situation to improve, even in percentage terms, the value that we add to our wines compared with our main competitors which, at the same time, are also the main clients buying the cheap bulk wine we sell outside Spain.
Those countries that bill more than 1.000 billion euros abroad for their wines include Australia (1.829 billion euros, almost 3.2% and 56 million more than in 2017); Chile (1.680 billion, 5.2% and 93 million less); the US (1.226 billion euros, 6.2% and 81 million less); Germany, (1.032 billion euros, 2.6% and 26 million more); and New Zealand (1.011 billion, 4.6% and 49 million less).
More than half (53%) of the wine exported in terms of volume was bottled; another 34% were bulk wines in packages of more than 10 liters; 9% were sparkling wines, and the remaining 4% were bag-in-box wines in packages of more than 2 and less than 10 liters, with Germany, South Africa and Portugal as the main exporters in this category, which already accounts for 2% of the value of all exports, compared with 70% of bottled wine; 20% of sparkling wines and 8% of bulk wines in packages of more than 10 liters.
According to the OIV, sparkling wines saw the greatest increase, in terms of volume and overall sales value, with growth of 3.7% and 6.3%, respectively, led by Italy (20% of the total) and France (13%), and although they represent barely 9% of the total volume of wines exported and one-fifth (20%) of the total value.
Germany leads the ranking for wine imports, with 14.5 million hectoliters, despite reducing purchases by 4.6% and 700,000 hectoliters; followed by the U8, which also reduced purchases by 0.8% and 100,000 hectoliters, to 13.2 million; and the US, with 11.5 million, almost 5% and 600,000 hectoliters less; China, with 6.9 million, 8% and 600,000 hectoliters less; France, 15.1% and 1.1 million less, etc.
In terms of value, the US is the main importer, with 5.245 billion euros, 0.25% and 13 million more; followed by the UK, with 3.510 billion euros, 1.2% and 42 million more; Germany, with 2.619 billion, 1.9% and 49 million more; China, with 2.415 million, 2% and 50 million less; Canada, with 1.693 billion, 1.5% and 25 million more; Japan, with 1.419 billion, 0.6% and 19 million more; Russia, with 1.226 billion, and the Netherlands, with 1.693 billion euros.