We are in the midst of a very complex vintage, with current forecasts for Spain to increase wine production by more than 15% this year, even if production drops by 22% in 2019, which will undoubtedly place a serious burden on wineries and winegrowers when placed in the current situation of already overstocked stocks.
Image courtesy of: Penin Guide Spain
Spain is the country with the largest area of vineyards and the third largest producer of wine in the world. In terms of exports, Spain ranks first in the world in terms of volume and third in terms of value. However, since the outbreak of the new coronavirus, the overall wine market has seen a significant reduction in sales, the closure of the hospitality sector has hit the wine industry hard, and exports have not helped. According to the Spanish Wine Market Watch, Spain is the country with the largest drop in overseas sales, with sales falling between 35% and 50%.
Falling sales and rising yields are making it more difficult for farmers to sell their grapes and, importantly, for them to sell their grapes at reasonable prices. Low wine demand and oversupply will also lead to lower prices, and wine entrepreneurs will likely bear significant financial losses.