Recently, Italian wine media Wine News forecasted a 4.6% drop in Italy's wine exports for the year as a whole, outperforming the 10.5% drop in overall global wine exports and the 18% drop in exports from its main competitor, France.
Image from: COTTON Famous Wine Show
Italian wine has generally carried the brunt of the 2020 epidemic and will see a drop in exports, but in a manageable range. Italian wine exports are expected to be €6.1 billion this year, down 4.6% year-on-year, outperforming the global trend (-10.5%) and its main competitor, France, whose exports are expected to fall 17.9%. The upside to such a set of figures is that the market share of Italian wines has risen; the downside is that such macro figures may mask significant declines in certain segments, such as small players with high quality rates. In absolute terms, global wine imports will fall by €3 billion this year, with €1.7 billion of the loss coming from France, the market leader; while Italy is expected to lose €300 million, with explosive exports in the first two months of the year (+15%) reducing the total loss.
Italian wine sales have remained relatively stable thanks to the improvement of the price/performance ratio and the development of diversified distribution channels. However, many small and medium-sized companies were unable to do anything about it, especially those targeting the retail and ready-to-drink channels, which could face losses of more than 50%. In addition, exports of sparkling wine, a symbol of going out and partying, fell by 5.7%, underperforming still wine overall (-4.5%) for the first time since the financial crisis in 2009.
Falling demand in major export markets and declining domestic demand are doubling down on the wine industry, and the disappearance of the domestic consumer market is now a more serious problem than the more modest decline in export markets. This raises another obvious risk: more and more wine companies are considering price cuts. The fall in wine prices will hit all wine companies, but also the entire Italian wine industry"s efforts to raise prices and improve positioning in recent years.
Overall, Italy has done well this year, with a 4.6% drop in exports based on a combined assessment of several major export destinations. The two most important export markets: the United States (-2%) and Germany (-3%) both showed only limited declines. This is already a victory of sorts: in the case of the United States, for example, wine imports fell by 10% this year, while the value of wine imports from France fell by 23%. The Chinese market has still not fully recovered, with Italian wine imports falling 38% in the new crown season (March-August this year), before the decline narrowed and future trends remain to be seen.
