Wine prices are up and consumption is down. It looks like a case of the rich are drinking more and the poor less.
The International Organisation of Wine and Vine (OIV) reported this week that in 2022 many markets saw significant increases in wine prices which lead to a slight decrease in volumes consumed worldwide. The overall value of global wine exports is the highest ever recorded.
The OIV estimated world wine production in 2022 at 258 million hectolitres (mhl), marking a slight decrease of 1% compared to 2021. This was due to higher-than-expected harvest volume in Europe, despite the drought and heat waves during spring and summer, and average production level recorded in the Southern Hemisphere.
World wine consumption in 2022 is estimated at 232 mhl, marking a decrease of 2 mhl compared to 2021. The war in Ukraine and the associated energy crisis,says OIV, together with the global supply chain disruptions, lead to a spike in costs in production and distribution. This resulted in significant increases in wine prices for the consumers.
High inflation and global supply chain disruptions that led to significant slowdown of sea freight combined to result in an overall lower volume of wine exported at a much higher average price (+15% compared to 2021). It estimated the value of global wine exports at 37.6 bn EUR, ($A55bn).the highest figure ever recorded.
The combination “wine prices are up and consumption is down” suggests it is not just in Australia that the wine industry is a declining part of the alcohol industry. Those local companies hoping that a re-opening of the Chinese market might soon come to their aid should note this OIC summary of consumption trends : “Moving to Asian markets, China’s 2022 wine consumption is estimated at 8.8 mhl7, accounting for a 16% drop with respect to 2021. This is due to overall decline in internal demand, which has had a significant impact on the fall in global consumption.”
See also The Chinese Wine Buyers Who Don’t Drink It which explains most wine is bought by people who don’t intend to drink it. Instead, they give it away as gifts, during festivals like Chinese New Year, the Mid-Autumn Festival, or Singles Day.
