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OIV: first 2023 estimates of world wine production

20/11/2023

On Nov. 7, OIV Statistics and Digital Transformation Department head Giorgio Delgrosso presented the first estimates of world wine production in 2023.

Southern Hemisphere: worst drop since 2008

After two years of abundant harvests in 2021 and 2022, wine production in 2023 is expected to be around 45 million hectoliters, marking a significant decrease from the previous year. This is the lowest production since 2008 and can be attributed to the extreme weather events in the southern hemisphere.

Chile, the leading producer in the southern hemisphere, reported production of 10 million hectoliters, marking a 20% drop from the previous year, due to fires and drought. Australia also suffered a significant 24 percent decrease in production, with 9.9 million hectoliters, mainly due to rainfall and the effects of the La Niña phenomenon.

In third place, South Africa produced 9.3 million hectoliters, down 10%, due to vine diseases such as downy mildew and powdery mildew. Argentina recorded one of the least profitable vintages in its history, with production of only 8.8 million hectoliters, marking a 23% drop due to damage caused by spring frost.

Brazil recorded an estimated production of 2.3 million hectoliters, marking a drastic 30 percent drop from 2022, mainly due to rains during the growing season. Meanwhile, Uruguay suffered the worst contraction from the previous season, with a 34 percent decrease, caused by a severe drought.

A notable exception in the Southern Hemisphere is New Zealand, which recorded positive growth with production of 3.6 million hectoliters.

Northern Hemisphere (EU): the European Union at the center of concerns

The European Union, which accounts for more than 90% of world wine production, faces an estimated production of 150 million hectoliters in 2023, marking a 7% decrease from the previous year. If confirmed, this would be the third largest decrease in production since the turn of the century.

Forecasts within the EU show considerable diversification due to variable weather conditions. France is back as the world’s leading producer, with 45.8 million hectoliters, down 3% from the average of the past five years, but in line with 2022. The French harvest can be considered profitable overall, however, some areas experienced negative variations from the previous year. In particular, in the Bordeaux and Sud-Ouest regions, the downy mildew attack negatively affected production, while in the Languedoc-Roussillon region, drought was a limiting factor. Italy suffered a 12% drop in production, with 43.9 million hectoliters, the lowest level since 2017. Several factors related to this situation have been identified, but among them, the main one is undoubtedly the impact of downy mildew in the central and southern regions of Italy. Spain recorded an estimated production of 30.7 million hectoliters, down 14 percent, caused by a severe drought.

In the remaining EU countries with production above 1 million hectoliters, the changes in growth from 2022 are mixed. Some countries, such as Germany, expect higher production of about 9 million hectoliters, registering a 1% increase from the previous year. Portugal, with 7.4 million hectoliters (up 8%), Romania, with 4.4 million hectoliters (up 15%), and Hungary, with 2.5 million hectoliters (up 1%), have also forecast significant increases. These countries benefited from high temperatures during the growing season and summer rains that led to high yields.

On the other hand, there are nations such as Austria and Greece that have experienced declines in wine production. The situation in Greece is of particular concern, with an estimated production of only 1.1 million hectoliters, a 45% decrease from the previous year. This drastic decline is the result of a combination of grape diseases, particularly downy mildew, and a severe drought that has caused significant damage to vineyards.

Northern Hemisphere (Non-EU): US the best performers

Even in the major wine-producing regions outside the European Union with production above one million hectoliters, the situation seems to be mixed.

In the United States, the world’s fourth largest producer, production is expected to be around 25.3 million hectoliters, marking a 12% increase over 2022. This growth has been aided by an abundant winter and numerous rains in the Napa and Sonoma regions, which have brought a beneficial increase in moisture after many years of drought.

As for China, no data are available at the moment, but will be released at the next press conference scheduled for April 2024.

In the Eastern European regions, Russia forecasts an estimated production of 4.9 million hectoliters, in line with 2022 and a 9% increase over the average of the past five years. In Georgia, estimated production is 1.5 million hectoliters, registering a 28% decrease from the previous year, mainly due to adverse weather conditions such as heavy rains, hailstorms, and strong winds that damaged vineyards.

Production in Moldova is estimated at 1.3 million hectoliters, down 10% from 2022. At the same time, Switzerland recorded an estimated 1.0 million hectoliters, showing a 4 percent increase from the previous year.

Global wine production is declining

From data collected from 29 countries, representing 90% of the world’s wine production, global wine production for 2023 is estimated to be between 242 and 247 million hectoliters, with an average of 244 million hectoliters, registering a 7% decline from the already low levels of 2022.

This contraction represents the worst drop in wine production since 1961, surpassing even the historic 2017 vintage.

What are the causes?

Extreme weather conditions, including heavy rain and drought episodes, are primarily responsible for this contraction in wine production. Weather anomalies are becoming increasingly frequent, posing one of the most significant challenges to the industry.

Global wine production is also affected by complex economic and geopolitical factors, including inflation, falling demand, and rising inventories in many regions of the world. The combination of events such as the COVID-19 pandemic, the crisis in the global supply chain in 2021, and inflationary pressure in 2022 has increased the cost of wine production and distribution, reducing consumers’ purchasing power.

In addition, there are public health trends to reduce alcohol consumption and increasing competition from other alcoholic beverages, such as beer, in many countries.

Conclusions

The global wine sector is facing an unprecedented set of challenges in 2023, with wine production declining sharply due to extreme weather events. This situation represents a significant change for the industry and requires a creative response to address the structural changes and economic challenges ahead.

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