Verona. Predictably, the diminished production in Italy has started to produce its effects on the market at the origin for bulk wines. Returning from a campaign that had already seen an exponential increase of all types of wine, in particular common wines , price lists are gradually but inexorably increasing. The Italian average price – detected by Med & A, the National Association agents and brokers in wine – has increased minimum of 30-35% compared to the same period of last year for PDO and PGI wines, to around +50% for the base segment, fed by a perverse game of requests greater than the supply from operators escaping from DOC wines.
“There is a big difference from the last harvest that lies in the extent of these increases”, says Stefano Graziani, President of Med.&A. (National Association of Agents Brokerage and Sales Agents) during the recurrent meeting with his team of agents and brokers, gathered at the headquarters of Unione Italiana Vini in Verona. If 2011’s quotations started at the minimum, and many areas saw increases as a return to a physiological process, 2012 starts with a consolidated basis and strong price lists. For many products – especially the basic ones, as well as some Do or Ig productions – the risk is to cause a war “at the penny” if the distribution will not be willing to accept the legitimate demands of the bottlers, squeezed between rising prices on the one hand, rising costs of raw materials and other subsidiary materials on the other hand. “
Already last year we assisted to some bottlers who had struggled to pass on the distribution the prices increases incurred in the production, being forced to “swallow” at least half of the increases. “This year if the distribution is not aware that in Italy there is less wine and stocks are cleared, prices can’t help but raise up, and the outlook for many suppliers not to make a profit is just around the corner.” commented Graziani. Basically, if the big retail chain will plug the pot, it may break out. Taking into account that this year’s low production involves the whole world, our operators will fail to draw from traditional tanks reserves in contingent circumstances, such as Spain or Argentina.”
Less wine around the world
Numbers certify that in the world there is less wine: apart from Italy’s decreased of 8% going below the threshold of 40 million hl, France and Spain are also at historical minimum. Indeed, the latest forecasts mark a declining by 30% for the Spanish a crop, to 27 million hl. Heavy falls are expected in Argentina, as well as throughout the European continent from Austria to Russia to Bulgaria. About the causes – in addition to climatic factors, which this year had a strong impact for Europe in particular – Med & A. points out that now the grape product is increasingly finding destinations other than wine consumption: the production of juices (dramatic increase this year in Germany, in Apulia entire productions were turned into juice), vinegar, and the alcohol market for the production of spirits and vermouth, all hungry for raw materials are becoming competitors in the purchase of grape, compared to wine producers. Already in 2011, the OIV quantified in 30 million hectoliters requirements for industrial purposes, estimating for 2012 a request exceeding the supply, especially in the market for brandy. This is driving up the prices of grapes and therefore wine.
“What we want to run as super partes association – says Graziani – is an appeal to the retail sector, to make them realize – numbers in hand – that the market is experiencing a time of great uncertainty, with the uncertainty of the application of Article 62 , the impact of which – though in principle seems to benefit those who sell – still must be assessed in its entirety, as it touches consolidated trends in the field of bulk. Increases in production are a fact – said Graziani – so scale distribution is called if only to take notice and open with its suppliers in a constructive dialogue. “
The details of the Regions
All the main producing areas are experiencing increases generalized, involving musts, common wines and wines with a geographical indication.
The harvest in Verona and Vicenza area is in line with most of the Italian regions: it has been estimated a crop poorer than last year and, in the process, we realize that the estimate was still optimistic compared to reality. The reduction in the amount of some varieties according to the latest estimates may even reach 30%. The market has already begun to move upward on the grapes, with average price still not easy to assess because there are still purchases of the last few supplies available, and prices are still rising. The wine market reflected a series of increases: in particular, the largest jump is of the white wines without denomination of origin, with an increase of 50% compared to the same period of 2011.
These percentage increases relate a bit to all common white wines of Italy, since the poor production is responsible of not reaching the DOC and IGT denomination of the table wines, according to the specific legislation for each disciplinary. More contained instead are the increases of the DOC and IGP wines, around +20%, which is found more or less in all the varieties.
In the Northeast (market of Treviso) the increases compared to last year are already widespread, with peaks for the whites of Igt from the Venetian terrirory: +58% the generic, +35% Pinot bianco, +30% Glera, +21% Chardonnay. Double-digit increases for the red IGT, with +33% Merlot, 25% Cabernet Sauvignon. Stasis instead for Prosecco on the market, with the Doc recording a -25% compared to the end of September last year.
Slightly in coutertrend the Piedmont, facing increases on the prices of the grapes (see article), pictures today a stasis situation: only slight increases for Barolo (2008 is quoted between 7 and 7.50 euro per liter) while stable are Barbaresco (2009 from 2.80 to 3.20 per liter), Barbera d’Alba (2011 from 1.10 to 1.50 per liter) and Dolcetto d’Alba (2011 1 to 1.20 to liter), for which there is not a great demand today. Downwards the Arneis (Roero 2011 from 1.80 to 2 euro per liter and Langhe from 1.50 to 1.70). On a medium term perspective the prices of Barolo should come to a standstill, while those of Barbera could raise, as long as the market is stable. Stand-by for the Arneis.
Moving to Emilia Romagna, significant increases were recorded for basic wines, both red and white, united by a rise of more than 60% compared to the same period of last year. Strong increases for wines with a designation: Sangiovese +45%, Trebbiano +60%.
In Abruzzo, the start of the campaign was outlined from the lowest stocks in recent years in several wineries, as well as the lowest amount of unsold products. After the initial phase of skepticism with patchy sales certainly due to price increases, we come now to the situation where the white musts demand exceeds the supply. The Trebbiano production estimates say about 10-15% less than in an average year, but today we are still tied to the rain factor that can still create problems, especially on the integrity of the grapes. On the red grapes there is much more to say: the estimate for the quantity of the Sangiovese is on the average, while for the Montepulciano grapes it is estimated a decline in production that is to be related to the different areas.
Apulia records strong increases in the North area (Bari, Barletta, Foggia), with the maximum prices for the basic wines raised over 5 euro (°/100 kg) and a tendency to increase further in the course of the campaign. Less marked are the increases of the prices in the South area, the Salento, that were limited to a few cents, with a peak of 15 cents for Lambrusco wine and Cabernet.
In Sicily, finally, there are significant increases in the prices of wines from the same period of the previous year: roughly the average stands at a + 30% for whites and 20% for the red ones. It is still difficult at this time to make predictions, because the months of October and November will record the most significant transactions and will give us a more precise status of the market.
What is Med.&A.
Med & A. – National Association of Agents Brokerage and Sales Agents was founded in 2000 by its current president, Stefano Graziani, and a group of agents and brokers in the wine sector with the aim of protecting the category in union, technical, economic and social marketing of bulk wines.
Today, with its 25 subsidiaries on behalf of a hundred professional operators, who treat about 15 million hectoliters of wine per year for a turnover of nearly one billion euro, the association is the point of reference and guarantee for the agricultural world and the industrial sector.
The association is part of the Unione Italiana Vini.
Traduzione di Glores Sandri