Ciatti Report: A Painful But Necessary Rationalisation

This year’s Northern Hemisphere harvests are now underway after an eventful growing season of heatwaves, humidity, hailstorms, flooding, and disease pressure. What does this all mean for the crops? Ciatti gives its assessment.

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Better things to come? (Photo: Nuthawut/
Better things to come? (Photo: Nuthawut/

Early vintage indicators

Despite mildew pressure in Bordeaux and drought in western Languedoc, France as a whole is estimated to be on track for a crop of 45m hectolitres, in line with the five-year average. A searingly hot summer in Spain has reduced the juice yield of La Mancha’s international varieties, but we currently do not expect the overall crop to be significantly down from last year’s 40m hectolitres. Italy’s crop is estimated at 42-43m hectolitres, down from last year’s 50m hectolitres due to heat and hailstorms, but this size is not unprecedented, being in line with 2017. California’s crop is lagging two to four weeks behind due to a wet and mild growing season: it remains too early to make a forecast.

Weak sales

Meanwhile, the Southern Hemisphere’s export sales remain steady, though at a reduced level. Chile could have its largest-ever carryover stock as of 31st December as total export volumes remain 25% down versus last year. Argentina has normal availability levels despite its 2023 crop being one of its shortest on record, illustrating the sales decline. South Africa’s export sales are now outpaced by its domestic sales.

South African growth

In fact, South Africa’s domestic wine market is one of the few around the world actually growing, possibly the only significant-sized market doing so: the drinking age population totals approximately 40m. Growth is being driven by entry-level red and white wines for the bag-in-box market. Good competition between domestic players has led to attractive retail price points, while improved logistics have enhanced wine’s cut-through in traditionally beer-drinking areas.

Better things to come?

Inflation is trending downward in many markets, pausing further interest-rate rises in some. Cautious optimism is being aired regarding final-quarter 2023 consumer sales. Typical of recent reports of improved consumer sentiment, German market research company GFK in its August update on the UK market found that negativity regarding the next 12 months had halved versus where it was a year ago, “and the eight-point advance in major purchase intentions is potentially better news for retailers as we move into autumn”. It ought to be remembered, however, that grocery price inflation – the measurement arguably most relevant in assessing what sort of consumer sentiment wine is facing in the retail aisles – is proving one of the slowest to fall.

Vineyard rationalisation

Ultimately, the wine industry is entering a period of painful but necessary rationalisation of production to bring supply back into greater balance with demand after 15 years of declining global consumption. We are now seeing vineyard removals discussed and in some instances being carried out – we believe approximately 10% of vineyards in Chile are being uprooted this year, for example. In the meantime, many bulk prices constitute an opportunity, offering great value, and – if consumer sentiment really does improve towards the end of this year – now may be the best time to take advantage.


Ciatti’s broker team, with its many decades of experience in the wine and grape industry, stands ready to help pair up buyers with suppliers. For the very latest and most detailed market intelligence and pricing, don’t hesitate to get in touch with Ciatti directly.

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