The war in Ukraine will lead to soaring wine prices due to rising energy prices and worsening supply chain problems, the International Organization of Vine and Wine (OIV) warned on Wednesday.
“The war in Ukraine has added new bottlenecks to the supply chain,” and this is having an inflationary impact on the wine sector and causing disruptions in the supply of inputs, said the organization’s general director, Spaniard Pau Roca.
Presenting a report on the results for 2021, Roca also warned that “the possible disruption in trade between the European Union and Russia (…) will hit the main exporters to that country”.
Russia was the 10th largest wine importer in the world in 2021, with a purchase volume of 1.1 billion euros (2% of the total), and its three main suppliers were three European Union members: Italy (33% of the total), France (19%) and Spain (12%). Roca pointed out that the conflict in Ukraine “clearly affects energy prices” but is not the only factor.
Firstly, because both Russia and Ukraine are among the most important suppliers of raw materials. But also, for example, by the twentyfold increase in the price of containers and other basic goods and services for international trade. Last year, world wine exports hit a record high, increasing 4% in volume and 16% in value to 34.3 billion euros.
Vineyards of Mendoza, Argentina: Wine production in Latin American countries is also affected by climate change
Image: Getty Images/iStockphoto
In 2021, Spain became the world’s leading exporter of the drink with 23 million hectoliters, up 14% from 2020, surpassing Italy with 22.2 million (+7.3%). In terms of value, however, France was the undisputed leader with 11,075 million euros (+26.8% in one year), followed by Italy (7,060 million, +12.5%) and Spain (2,883, +9.5%).
Roca said that in the southern hemisphere, where the 2022 harvest is now underway, production in Argentina is expected to fall 13.1% to 10.85 billion hectoliters; 9.9% in Chile to 12.1 billion; and 10% in Brazil to 3.24 billion hectoliters due to weather conditions. The OIV also estimates that there will be a 5.3% drop in Australia to 13.45 billion hectolitres and a 0.4% increase in South Africa to 10.65 billion hectolitres.