Since its peak in 2007, when some 250 million hectolitres was consumed, global wine consumption has trended downward amid successive headwinds: the 2007-08 financial crisis and its long aftermath, China’s 2018-19 economic slowdown, then the end of a post-pandemic rally. The International Organisation of Vine & Wine (OIV) provisionally estimates 2022 consumption at 232 million hectolitres, in line with 2020 and – before that – 2002. In short, the consumption gains made this century have been lost. 

A considerable factor in this shrinkage is China. While the other major winedrinking countries have consumed wine at a roughly steady rate, the OIV estimates Chinese consumption has declined by two million hectolitres every year since 2018, so that China drank in 2022 less than half of what it did four years before. It was hoped the lifting of strict COVID-19 measures in January would unleash pent-up Chinese demand for imports including wine, but while exports have returned to growth and there has been solid domestic consumption of services, imports have stumbled in and out of negative territory. 

Until such times as China’s burgeoning middle classes rediscover their love for imported wine, the onus is all the more on the already mature markets of Europe and North America to grow. This is a tough ask, considering the present economic circumstances and the long-term decline in consumption among younger drinkers who can choose from an ever-increasing range of alternative alcoholic beverages, whether that be, for example, hard seltzers in the US, cannabinoid-infused drinks in the UK, or alcohol-free spirits in France. 

In the meantime, the bulk markets of France, Spain and South Africa have seen increased activity in the past few weeks. Distillation prices have been agreed – though not yet officially announced – in southern France, establishing the market floor, while the frost risk has passed without major incident. Recordbreaking April heat in Spain and a severe rainfall deficit have stimulated bulk demand as fears for the coming harvest grow. December-February activity in South Africa, delayed while buyers sought extra time to gain visibility on future need, is now taking place. This buy late, ship quick approach has been assisted by noticeable improvements around the world in container availability and shipping efficiency – themselves possible symptoms of a global economic slowdown. 

With costs high and bulk demand slow, holding large inventory is currently considered a liability; buyers are seeking to secure only what they definitely know they will need. Sellers are reacting to local factors but also increasingly taking in the macro view – economic uncertainty, the retail sales slowdown – so the upward and downward price pressures are often cancelling each other out. Therefore, the overall trend in the past few months is for stable bulk pricing; most of the price softening that does occur is happening on reds. 

For the latest buying and selling opportunities, don’t hesitate to get in touch with Ciatti direct; the team can draw on its many decades of experience to help you ride out the current turbulence. In the meantime, read on for detailed updates on each market.

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