OIV says war in Ukraine will also cause wine prices to rise

The International Vine and Wine Organization (OIV) warned on Wednesday that the war in Ukraine will lead to higher wine prices as a result of rising energy prices and worsening supply chain problems.

“The war in Ukraine has added new bottlenecks to the supply chain”, said Spanish Pau Roca, the organization’s chief executive, saying that this has had an inflationary effect on the wine sector as well as cuts in input supply.

While presenting a report on the results for 2021, Roca also warned that “a possible trade interruption (…) between the European Union and Russia will affect the main exporters of that country”.

Russia was the world’s tenth largest importer of wine with a purchasing volume of €1.1 billion (2% of the total) in 2021, and its three main suppliers were the three members of the European Union: Italy (33% of the total), France ( 19% and Spain (12%). Roca pointed out that the conflict in Ukraine “clearly affects energy prices,” but that is not the only factor.

First, both Russia and Ukraine are some of the main raw material suppliers. But also because of, for example, a 20-fold increase in the prices of containers and other essential goods and services for international trade. Last year, world wine exports reached a record level of 34.3 billion euros, up 4% in volume and 16% in value.

In 2021, Spain became the world’s leading exporter of beverage volume at 23 million hectoliters, up 14% from 2020, surpassing Italy at 22.2 million (+7.3%). However, the undisputed leader in terms of value was France with 11,075 million euros (+26.8% in a year), followed by Italy (7,060 million, +12.5%) and Spain (2,883, +0.5%).

Roca stated that the production in the southern hemisphere, where the 2022 harvest continues, is expected to decrease by 13.1% to 10.85 billion hectoliters in Argentina; from 9.9% to 12.1 billion in Chile; and 10% in Brazil to 3.24 bc due to weather conditions. OIV also forecasts it will fall 5.3% to 13.45 billion hectoliters in Australia and 0.4% to 10.65 billion hectoliters in South Africa.