The International Organisation of Vine & Wine (OIV) has released its preliminary estimates of global wine production in 2023: the mid-range estimate is 241.1 million hectolitres, 7% down versus the below-average volume of 2022 and, it says, the lowest output since 1961. We suspect this mid-range figure may be a little on the high side, as the OIV used for their Italy figure an early-September estimate issued before the lightness of tonnages in central and southern parts of the country became clear. 

While the “smallest output in 60 years” statement makes for good media headlines, the OIV concedes that it has occurred in a context “where global consumption is declining and stocks are high in many regions of the world”, adding hopefully, “the expected low production could bring equilibrium to the world market”. 

We have seen that Italy’s short crop has stimulated some bulk-wine buying activity there and in neighbouring Spain, with some ripples also felt further afield. In addition, there is a sense in some markets that distributors are finally nearing the end of the inventories they built up during the pandemic and will soon require fresh volumes, even if they get purchased incrementally given the current slowness of consumer sales. China, meanwhile, is reviewing the import tariffs it has levied on Australian wines since 2021 – which have reduced the value of Australia’s wine exports to the country from AUD1.2 billion at the peak of sales to AUD8.0 million today – with an expectation the levies will be repealed once the review is concluded. A China active again on the Australian market would help drain red wine volumes and potentially stabilise bulk red pricing around the world. And uprootings are underway in some countries as the industry inevitability rationalises in response to reduced profits and cashflow, lowering crop potentials in coming years. 

Consequently, there are some reasons to be a little more hopeful about the supply-demand balance in 2024. But in the short to medium term, until such time as North American and European consumer confidence returns, supply will remain out of whack with demand and buyers will hold the upper hand on most bulk wines. In the longer term, demand will continue to trend downward unless wine can grow its share of alcohol consumption among younger demographics. 

The Northern Hemisphere harvests are now complete: the French crush appears to have come in above-average in size; Spain’s was well below the average but availability levels remain close to normal after a slow year of sales, while the likelihood is that California’s crop – which we guesstimate at 3.5-3.6 million tons – is short of the average at least partly due to some unsold grapes going unpicked. Only Italy’s short crop will notably influence the bulk market, as outlined above. 

The fifteenth instalment of the World Bulk Wine Exhibition in Amsterdam is now upon us (21–22 November) and, as ever, Ciatti will be in attendance. Come visit us on our stand, D42, or around the show: broker contact details for each supplier country can be found below. We look forward to seeing faces old and new. In the meantime, read on for detailed updates on each market.

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