Italy's Wine Industry in Distress

Italy is at risk of starting the 2023 harvest with the highest inventory of the last 20 years. Can crisis distillation help?

Reading time: 3m

Wine industry in crisis (Photo: fewerton/
Wine industry in crisis (Photo: fewerton/

Over the past three years, stocks have risen by 11% with production volume remaining constant.

Sales continue to decline both in Italy and in the major international markets. Hopes were high that they would improve in April, but nothing changed. According to the most recent inventory survey by the Ministry of Agriculture, 56.6m hectoliters of wine were still stored on April 30, 2023, 5% more than on April 30, 2022. This is in line with the surplus of 5% recorded at the end of March.

Crisis meeting of wine associations

Due to acute surpluses in Italian wineries, representatives of Italian industry associations held a crisis meeting at the Ministry of Agriculture. "The current inventory levels and market difficulties prove that the crisis situation persists in some wine-growing regions, especially with regard to red wines. This situation is particularly worrying for the industry as we are only two months away from the next harvest," explains Luca Rigotti, Italy's highest-ranking cooperative member.

Rigotti, coordinator of the wine sector in the federation of agricultural cooperatives "Alleanza Cooperative" and president of the Mezzacorona group, demands a medium-term strategy and the application of market-regulating measures to restore the balance between demand and supply. In addition to crisis distillation, a revision of the distribution of planting rights should also be considered, favoring strong-selling origins and suspending slow-sellers.


More and more wineries are discovering a second source of income—distillation. Roger Morris looks at the wineries taking advantage of the market’s thirst for spirits.

Reading time: 8m 45s

Yes to crisis distillation, but who pays for it?

The fastest solution would be crisis distillation, as in France and Spain. The stakeholders agree on this, but financing raises questions. The producers' association Unione Italiana Vini (UIV) opposes the diversion of funds that are already tied to sales promotion and investments. "While the UIV is aware of the particular difficulties of the sector – and has largely anticipated them – it believes that the buffer measure should not penalize the sector by diverting strategic resources for its growth. If it becomes necessary in certain areas of the country, the distillation measure should instead be able to rely on ad hoc regional funds," it says in a statement.

In any case, distillation is only a temporary solution for the sector's structural weaknesses. The discussion should be used to critically deal with dynamics such as overproduction, which also led to distortions in the compensation of the supply chain.

Setbacks in retail sales

Sales in the national retail sector have again declined in the first quarter of 2023. The volume fell by 6.1%, while the value increased by 2% due to inflation. The worst affected are the DOC red wines, with a decline of 10.5%. The only increase is in the low-cost Spumante category with an average price of €4.47 per liter RRP. Even Prosecco is feeling the backlash with a sales loss of 2.8%.

Weakening exports

Trade on the three main export markets, U.S. , Germany, and the UK, reported a volume loss of a total of 4%. According to NielsenIQ surveys, the value fell by 1%.

This time, sparkling wines are more affected than still wines: compared to a contraction of 3% in still wines, the sparkling segment fell by 5%. Particularly in the UK (-10%) and Germany (-6%) losses were recorded. The U.S. maintains its sparkling consumption (+1%), but still wines fell by 9%. In the UK the damage is limited (-1%) and Germany maintains the volume.

  • In the U.S., the negative trend is running through the strongest origins of Italy, from Pinot Grigio to Piedmontese and Tuscan red wines to Lambrusco.
  • In the UK, Sangiovese-based wines are on the decline, as are trade brands of Pinot Grigio, which have become more expensive than the wineries' own brands. Prosecco is also losing, only Prosecco Rosé maintains the comparatively small quantity.
  • In Germany, the shift to alternative and cheaper wines is noticeable, such as the change from Chianti Classico to Chianti.
News Wine

In the annual report on the global wine industry, the OIV highlights significant shifts taking place. Germany is no longer maintaining its position as the world's leading importer, and a new export champion from the New World has emerged. Clemens Gerke reports.

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The negative trend in the 1st quarter of 2023 contrasts with the then still positive figures in the previous year's period. But for the full year 2022, the three main markets have already seen declining sales.

Changes long overdue

For the Italian wine industry, the crisis distillation is a bitter pill that it did not want to swallow. But the industry has always left back doors open to avoid deep structural changes and strict volume control. This worked well for a long time. Now, Italy must try to confront the changed, increasingly complex market conditions and secure values with a mix of massive promotion and market-regulating measures. VC




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