W37: Wine Update

In W37 in the wine landscape, Italy's wine production is anticipated to decline by 12% year-on-year (YoY) in 2023, dropping below 4.4 billion liters. This decrease is attributed to extreme weather conditions and the impact of fungal diseases, particularly Plasmopara viticola, which have severely affected vineyards. Consequently, Italy will relinquish its position as the world's largest wine producer to France for the first time in nine years. Production is expected to decrease by approximately 20% in the central regions and about 30% in the south. However, there is no significant cause for concern as available wine reserves currently exceed 4.9 billion liters, marking the highest level in six years.

Italian wine exports reached 3.7 billion liters in the first half of 2023, slightly below the 2022 figure. Wine exports to North America saw poor performance, with a 7% YoY drop to the United States (US) and a 16% YoY drop to Canada. In contrast, exports to Europe showed a slightly positive trend, especially with promising signs from France and Russia. Regarding the types of wine products, there was a slight growth in sparkling wines (+3%) and a slight decline in bottled still wines (-2%).

In Russia, retail sales of alcoholic beverages from Jan-23 to Aug-23 totaled 1.46 billion liters, a 4.3% increase YoY. Sales of grape wines increased by 5.5% YoY to 373 million liters, sparkling wines by 9.2% YoY to 121 million liters, and fruit wines surged by 17.6% YoY to 81 million liters. Liqueur wines showed the highest growth rate, increasing 1.8 times to 7.84 million liters. Low-alcohol products witnessed sales of 114 million liters, a 17.1% increase YoY. In Aug-23 alone, retail sales of alcoholic beverages amounted to 192 million liters, marking a 6.6% YoY increase. Grape wines sold 51 million liters (9.7% more), and sparkling wines amounted to 16 million liters (13.2% more).

Additionally, over the next decade, the Far East of Russia has the potential to become the easternmost wine-growing region in the country, producing PGI (protected geographical indication) and ZNMP (protected designation of origin) wines. Global climate change in the past two decades has reshaped winemaking geography in Russia. Initially, the Rostov region was considered the northernmost for grape cultivation, then vineyards appeared in the Volgograd region, and now even the Samara region has vineyards. According to Roskachestvo's forecast, wine-producing regions may increase by 1.5 times over the next five years, potentially including areas like Astrakhan, Tver, Oryol, Saratov, and the Far East.

Lastly, 2023 has posed significant challenges for farmers, including winegrowers in Bulgaria. Adverse weather conditions, such as excessive rain in some areas, prevented timely spraying and forced farmers to combat diseases and pests extensively. As a result, many winegrowers had to complete their harvest as early as May. Additionally, in certain regions, hailstorms damaged the crops, leading to harvest losses. In contrast, in some areas, there was a severe drought, resulting in meager yields.

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