17-Sep-2024
– Last updated on
17-Sep-2024 at 09:38 GMT
Grape and wine producers confront significant obstacles due to increased production costs, and labor shortages are intensifying these challenges.
The impact of climate change compounds these issues, with elevated temperatures and more frequent extreme weather events disrupting the timing of harvests, the quantity of crops, and the quality of grapes. Such alterations make agricultural planning highly difficult, and in some cases, lead to devastating losses. Notably, global wine production in 2023 fell by 9.6% due to severe climatic conditions(source).
France, Italy, and Spain, the leading global wine producers, collectively account for nearly half of the world’s wine output. The production figures for 2023 highlight the varying impacts of these challenges. France saw a production increase of 4.4%, whereas Italy and Spain experienced significant declines in production, 23% and 22% respectively(source).
And wine is in a long-term structural decline. The category has always relied on older drinkers, and has done little to attract younger drinkers who are much more interested in trending categories such as RTD alcohol and craft beer.
And, in general, alcohol is increasingly under fire as trends shift towards health and wellness – leading to what CEEV calls the ‘demonization of wine’ in health policy. The result is that supply and demand simply don’t match up.
The decline in consumption – along with disruption of trade exchanges from geopolitical disputes and trade conflicts – has created uncertainty in the world wine trade: a big issue for an industry that enjoyed €17.9bn worth of exports in 2022-2023.
This month, the European Committee of Wine Companies (CEEV) participated in a high-level meeting on the future of wine policy with the European Commission: setting out its vision to tackle the challenges facing the wine sector and its key proposed solutions for long-term sustainability.
The effectiveness of solutions for challenges in the wine industry depends on the operations and regulations of wine markets. The approach is dual-pronged: enhancing the competitiveness and adaptability of wine businesses to market demands, and bolstering their resilience against climate related challenges through mitigation and adaptation strategies.
“The EU wine sector faces both long-standing and immediate challenges,” said Mauricio González-Gordon, President of CEEV. “This meeting was critical for strategically discussing the future of EU wine policy. We appreciate the Commission’s efforts in initiating this. The future of the EU wine industry depends on operators who are dedicated to sustainable and continued growth, and it’s important that EU policies support and prioritize these operators.”
There are complex issues in the industry. One significant issue is finding the balance between preserving traditional wine making practices and innovating to meet the needs of newer generations.
One solution might be to enhance the flexibility of geographical indications, which are usually very restrictive, to allow for easier adaptation to climate changes.
Or it might involve revising the production and labeling standards to effectively include dealcoholized, partially de-alcoholized wines, and aromatized wine products, thereby aiding the expansion of no and low alcohol wine options.
There’s another complex issue – perhaps even more challenging to address – which is to discern the role of wine in a society where negativity towards alcohol is growing. The CEEV suggests that addressing this involves distinguishing the harmful effects of alcohol abuse from the moderate consumption of wine.
Yet, the primary focus of the CEEV’s varied policy objectives is to reduce the bureaucracy that vineyards, wineries, and others in the supply chain deal with. Notably, 99% of wine producers in the EU are small or medium-sized enterprises, which are more susceptible to being burdened or confused by diverse and evolving regulations.
Access the CEEV’s policy documents here.
To secure the future of EU wine companies, CEEV proposed a range of policy priorities.
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