Ciatti Report: Global Slowdown?

Activity on the bulk wine and grape markets in January occurred mainly in the Southern Hemisphere, now that picking of its new 2023 vintage is underway and crop expectations begin to influence buying and selling behaviour.

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Smal crop and sluggish markets (Photo: ronniechua/
Smal crop and sluggish markets (Photo: ronniechua/

Small crop in parts of the Southern Hemisphere?

The potential for one of the smallest crops of the past 20 years in Argentina – following spring frosts and continued hailstorms – has stimulated bulk wine buying activity there and in neighbouring Chile. Dryness combined with some intense heat has led to numerous wildfires in Chile, but its own crop is currently expected to be normal-sized.

Disease pressure looks to have been a contributor to smaller crops in South Africa – projected to have its smallest crop since 2019 – and in Australia, where there has also been a deliberate pull-back in red grape production given the country’s large red wine inventory. Only New Zealand is expected to see a harvest above-average in size, the important Marlborough region escaping the January flooding that struck the country’s North Island.

Sluggish bulk wine activities in der Northern Hemisphere

Bulk wine activity in the Northern Hemisphere, meanwhile, proceeded sluggishly through January, with most purchasing taking place on the 2022 white wines – and even then, only incrementally. As whites are in greater supply-demand balance than the reds, this buyer hesitation is likely more symptomatic of a retail sales slowdown in Europe and North America than carryover levels. It is still early days for the Northern Hemisphere’s 2022 reds, but the slow activity on the remaining 2021 carryover – which is large – is a good indicator that bulk red wine sales will not be brisk for the foreseeable, especially given the economic environment.

Crisis in France

It is with this in mind that growers in southern France lobbied the French government to introduce a crisis distillation plan, the second in four years. On 6th February a scheme was duly announced that will get underway this summer, with a potential second round occurring from October. Precise details are yet to be hammered out, but suppliers are hoping for distillation pricing in line with that seen in 2020 –€78/hl for IGP/AOP wines and €58/hl for Vin de France wines – and are likely to prioritise carried-over red and rosé wines for the scheme. Suppliers in Italy are now calling on their government to introduce something similar.   

Talk of rosés going for distillation highlights how, at the Global Market Report’s France page says this month, “the rosé market has become decoupled from the white wine market over the past year or so, proceeding at an incremental pace closer to the reds.”

South Africa, too, experienced disappointing European sales of its 2022 varietal rosés and is consequently questioning how much to produce this vintage. This situation is likely at least partly attributable to southern French overproduction – as wineries sought alternatives to producing reds – compounding a lag in rosé turnover in 2020-22 due to COVID-19’s toll on the on-trade and summer-season gatherings.

Threat of a global slowdown?

The loading lags of the past 12-15 months, due to logistics delays and/or slowing pull-through on the retail shelf, means many buyers are only now receiving wines contracted last year. Improved container availability, and cheaper prices, may however be a symptom of a global economic slowdown, from which the wine industry will be no more immune than any other.


In the meantime, there continues to be an array of opportunities for buyers and sellers out there on the bulk wine and grape markets, and Ciatti can draw on decades of experience to help realise them: don’t hesitate to get in touch.

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