In W25 in the wine landscape, the European Commission took exceptional measures on June 23 to support wine producers facing challenges in the sector, including authorising crisis distillation and grape thinning. These measures aim to address imbalances caused by inflation and a drop in consumption. The decrease in wine consumption is significant in several European countries, with Italy experiencing a 7% drop, Spain at 10%, France at 15%, Germany at 22%, and Portugal at 34%. Moreover, EU wine exports from January to April 2023 were 8.5% lower YoY, leading to increased stocks. To promote exports, Spain published an order in the Official Gazette of Aragon on June 20 which outlines the approval of subsidies for the promotion of wine in third-country markets from January 1 to December 31. The subsidy aims to enhance the competitiveness of the wine sector and facilitate market opening, diversification, and consolidation. Furthermore, Castilla La Mancha in Spain will receive USD 46.73 million for vineyard restructuring, accounting for 53% of the total funds allocated in the country.
In the UK, the wine trade has seen an increase in on-trade sales from 14% to 22% and a significant rise in off-trade sales from 25% to 41% compared to the previous year. Exports have also grown from 4% to 7%, and there are predictions of wine production reaching 25-29 million bottles by 2032 with the expansion of vineyards to 7,600 hectares from the present 4 thousand hectares. Following a call from Sussex last week to accelerate wine tourism, the report showed almost a quarter of all wine revenue came from tourists (24%). Sussex's primary objective is to increase the value of the wine tourism sector from USD 27.17 million to USD 307.54 million by 2040.
Georgia has emerged as the top exporter of still wines to Russia, surpassing Italy in the first five months of 2023. Georgia's supply of still wines to Russia increased by 63% to 24.15 million litres, while Italy saw a 31% increase to 23.36 million litres. This resulted in Georgia holding a 19.1% share of the still wine supply to Russia in volume, compared to Italy's 18.5%. During the same period, imports of still wines from Spain increased by 25%, France by 23%, and Portugal by 69%. The growth in Georgia's wine exports can be attributed to its imports by retail chains in the low and medium-price segments, as well as the advantage of zero import duty for Georgian wines. Additionally, Russia has recently banned the use of imported concentrated grapes to increase sugar content in wine production, which allows domestic producers to increase their production. This ban impacts wines that rely on concentrated vacuum must, used in up to 50% of semi-sweet wines on the market. Domestic wineries with appropriate installations are capable of producing vacuum must, enabling them to adapt to the import ban.
Ukrainian winemakers are requesting additional customs measures, including a 50% special duty on fermented drinks, vermouth, fortified wines, and grape wines from Georgia and Armenia. This request is in response to what they perceive as an unfriendly policy towards Ukraine by these countries' governments. Lastly, in the US, extreme weather conditions have caused a significant 70% decline in Missouri's wine production this year. The ongoing drought poses a risk of long-lasting damage, and if replanting is necessary, it will take several years, typically 3 to 5, to achieve full production from the vines.
