The Strategist

Lights and Shadows of World Wine Market

08/28/2015 - 15:37

World wine imports in the first five months of 2015 sometimes is in the bright light, and in some places, immersed in shadow, according to data compiled by Nomisma Wine Monitor.

Mick Stephenson
Mick Stephenson
The sun is on the side of wine import once again gaining momentum in China. After the unsuccessful 2014, purchases are growing steadily (51% in value, 38% by volume compared to the same period last year), and the clouds gathering over Russia, in which the purchase of wine abroad fell by more than 35% in value and 25% by number. "The fall of the ruble associated with a decrease in oil prices, that has put Russian importers in crisis," says Dennis Pantin, an analyst at Nomisma Wine Monitor. "Since oil is one of the main resources of the country – he continues - the situation is not likely affected by European sanctions imposed in connection with the Russian-Ukrainian crisis, but falling prices for oil greatly reduced the purchasing power of Russians. This economic stagnation and, consequently, low consumption of foreign wines seem to last for a long time. "

The market on which the purchase of wine increased by 122% in only five years (from 2009 to 2014), cherished dream wine exporters all over the world, a kind of new El Dorado, is literally blown away. The decline of Russian imports of Italian wine has become significant likewise, and is within the average: judging only by bottled wines, imports from Italy by volume fell by 36%. But competitors are not doing better. Purchases of French wine have been reduced by 45%, showing that, first of all, the crisis hit the wines which are in a relatively high-price segment.

However, the decline in commodity exchange was reflected not only on rubles: New Zealand, Australia, Brazil also faced - though not so suddenly and globally – with the depreciation of its currency. New Zealand and Australia are the two main exporters of wine at the international level. In this situation, reducing the purchasing power of the monetary unit will play into the hands of wine producers in their own countries, greatly complicating the life of the Italian and European exporters.

Unlike Russia, the other big market that can compete with it, namely China, seems to wake up after a decline in 2014. Imports increase equal to more than 50%, driven by steel wine and wine from the wood, was recorded for the first five months. In this situation, the lion's share of profits falls on Australia (+ 134%), while the Italian exporters are satisfied only with 18%. Given the circumstances, many predict that this trend might continue to prevail, and the awesome "bubble", hovering over the Chinese stock market, does not affect the real economic situation in the country.

Leaving aside the emerging markets and turning to more sustainable, we can note 23% to the cost of imports across the United States, and associated with it 2% to the volume (thus, it is necessary to talk not about growth, but a trend related to the strengthening of the US dollar against the euro, resulting in a slight decrease of -0.5% in local currency). In this situation, Italian wines are presented higher than the average on the market, showing an increase in volumes by 10%, primarily due to the phenomenon of Prosecco, which has become the locomotive of imports of Italian sparkling wine, and who reached the level of 48% by volume of deliveries. Prosecco could master the British market too, where this wine is literally swept: + 64% to the amount of purchases in the difficult 2015 compared with the same period last year.

original by la Repubblica (