Devil's Advocate: What to Expect from 2025, and Why? Part 3 - Markets

In the final part of his 2025 predictions, Robert Joseph looks at wine markets.

Reading time: 5m 15s

Image by Midjourney AI and Cath Lowe
Image by Midjourney AI and Cath Lowe

These are such uncertain times that it seems foolhardy to try to predict which markets are likely to be the most and least promising for 2025. But, here goes.
 

NORTH AMERICA

United States

Until we know about Donald Trump’ tariffs and the impact on the US economy of his return to power, and the effect of increasingly alarming/ist health warnings, any attempt to predict the state of the wine market over the next 12 months is a one-eyed shot in the dark. However, as sales of wine-based alcohol-free wines and RTDs (including wine RTDs) seem set to go on rising as more brands follow Josh Cellars in climbing aboard the AF train, there seems to be plenty of justification for expecting conventional wine to repeat its 2024 performance: sales could fall by another 6-8%.
 

Canada

If anywhere is likely to be impacted by Trumpian sanctions and, if the new US president is to be taken at his word, some quite robust discussions over sovereignty. At best, the Canadian economy is expected to grow by 1.5%. At worst, it might shrink.

The wine trade will continue to be affected by last year's decision by the LCBO to allow Ontario convenience, grocery and big box stores to sell alcohol, This year, we will see how having over 8,000 more retail outlets affects consumption.

The negative impact of semaglutides on wine consumption will be global but, given its proximity to the US where the drugs are particularly popular, Canada might also be disproportionally affected. While Americans are paying $1,000 per month for Ozempic, the cost for their northerly neighbours is as little as $140.
 

ASIA

China

The Beijing government is doing everything it can to reboot consumer spending after the slowdown caused by the pandemic and the property sector crisis. This may help the on-trade and retail wine sales.

There are positive signs, too, from the most recent Australian export figures for the six months since the removal of tariffs. These suggest that Chinese wine consumption might be bouncing back. Over the year, some 59m litres were shipped, with a total value of AU$612m ($384m).

The authors of the export report frankly acknowledge, however, that the figures are “likely to be characteristic of re-stocking Australian wine after a long absence”.

Support for this cautious view comes from other, less encouraging data. In the year to November, French imports fell by 21% in volume, Spain’s by 37%, Italy’s by 13% and Chile’s by 15%. In all of these cases, apart from Chile, the value fall was smaller, indicating that Chinese who are drinking wine are trading up. But they are not drinking enough. In the third quarter of 2024, China’s biggest wine producer, Changyu, China’s leading wine producer, made its first loss since going public in 2000, and several distributors have closed or are reported to be struggling.    
     

India

The other largest nation on the planet may look more promising, though how much so depends on whose predictions you choose. For Statista, wine sales growth will be 6%, Euromonitor favours 12%, while IWSR optimistically opts for 17%. Excise duties, local taxes and registration costs are still impediments and logistics are not comparable to those in China, but online shopping will become increasingly important and there will be more casual opportunities to drink good wine in bars and cafes.
 

Vietnam

Elsewhere in Asia, Japan and Korea maybe be flattish markets this year, but Vietnam could be worth some prospection by wine companies that are not already in that market.
 

AFRICA

This huge continent will be increasingly part of the export discussion, but how many wine companies know where and how to start? Many professionals think of Nigeria as being a key target, while Côte d‘Ivoire, Angola and Namibia are all bigger importers. Indeed, the first of these shipped in £64m worth in 2023. Togo, Cameroon Republic of Congo, Benin, Gabon and Burkina Faso should all be on would-be exporters’ radar. However, there are lots of cultural differences between countries within this continent. Sagaci Research, found, for example, that in West Africa, wine was mainly drunk by men, while in Southern and Eastern Africa, women are the bigger consumers. Attitudes to wine may also not align with those in London or New York; heavy, ostentatious bottles still appeal in Nigeria, for example.

EUROPE

United Kingdom

Britain remains a huge import market and, thanks to its wealthy fintech sectors, is still a good place to sell fine wine. But don’t expect it to be a great market generally this year. From the beginning of February, wine will be taxed according to its ABV. This change in the excise duty regime is accompanied by a rise in the taxes to levels that make wine in the UK officially the most highly taxed in Europe. A £9 ($11) bottle of wine is now 50% tax.

 

Britain will be a great market for any producer with wines with low ABVs, especially makers of 7-8% mid-strength examples. For others, especially those with 14.5% reds and fortified wines… less so.

The reason for these tax increases – a ‘black hole’ in the economy – also led to the imposition of 20% sales tax on the private school fees that apply to 7% of British children. These average £18,000 ($22,250) plus extras, annually but can be over three times as much for top schools. The impact on many wine-drinking middle-class Brits should not be underestimated.

The ongoing costs and inconvenience of Brexit are also a factor for European producers wanting to sell wine in Britain.
 

Ireland

With its small population and geographic adjacency to the UK, Ireland is often overlooked. It has also failed to develop as much of a fine dining culture as its larger neighbour. But this is a very wealthy little country, with an historic taste for alcohol and a readiness to splash out on pleasure and entertainment. It should be on exporters’ target list.
 

Germany

For a number of reasons, Germany’s GDP has been flat since 2019, compared to growth in the rest of the euro area of 5%. Because of the strength of its auto industry, Germany is particularly vulnerable to Trump tariffs. This is also a country whose citizens are more conscious of their health than some of their neighbours. Will they react to the apparently endless stream of wine-and-cancer advisories?
 

Netherlands

Germany’s neighbour, the Netherlands has its own problems in the shape of stubborn inflation, but Rabobank is optimistic that “Purchasing power recovery will drive growth in Dutch economy in 2025 and 2026 and positively impact broad well-being”, so it could be worth watching.
 

Nordics

The rumblings over the insecurity of the future of the monopolies will continue, but wine producers elsewhere will almost increasingly exploit the chink in the Nordic distribution system that opened last year. The decision to allow supermarkets in Finland to sell mid-strength wine with ABVs of 8% or less has led to shelves full of wines from brands like Torres, Barefoot, Black Tower, JP Chenet, Lindemans, McGuigan and Barefoot. The Finnish market is too small to justify the effort involved in making and packaging all these products. But of course, producers are looking at other markets. The likelihood that Sweden will follow its neighbour’s example is taken very seriously.

Denmark has no monopoly system, of course, and it also has higher predicted economic growth than any of its neighbours.
 

Poland

Don’t forget Poland, where enthusiasm for wine is growing among younger consumers, and the economy is – in relative terms – booming with expected growth this year of 3.6%.
 

Russia and Ukraine

If, by any chance, Donald Trump does bring peace, both markets will be of interest to the industry. Consumption has continued to grow in Russia – especially of sparkling wine – despite many deciding not to sell there. Italy has done particularly well.

Ukraine’s own wines are now more visible to outside markets, but this has also, quietly, become an increasingly interesting import market, even during the hostilities. If 2025 marks the beginning of a reconstruction boom, more wine exporters may be making their way to Kyiv.

Opinion

It’s that time of the year, and, given the current state of the world, and the wine industry in particular, Robert Joseph thinks a little crystal ball gazing is in order - even if some of what he foresees may not be entirely welcome. Part one of a three-part series.

Reading time: 6m

Opinion

In part two of his three-part series of predictions for 2025, Robert Joseph looks at some specific sectors within and outside the industry.

Reading time: 5m

The views and opinions expressed in the Devil's Advocate pieces are those of the writer, and do not necessarily reflect the views or positions of the publication. They are intended to provoke discussion and debate. If you would like to offer your own response to this or any other article, please email the editor-in-chief, Anja Zimmer at zimmer@meininger.de.

 

Don't forget to subscribe to our newsletter. Be the first to know and never miss out on important updates.

 

 

Latest Articles