World winemakers report increase in selling prices of at least 10%

Author

Valery Moiseev

Wine importers, as part of the procurement negotiations for the next year, received notifications from suppliers about the increased cost of products. The prices mainly increased by 20-25% and the minimum increase is 10%. This information is provided by the RBC agency.

The main reason for the price rise is the "critically poor harvest" of grapes. This is stated in the report of the International Organisation of Vine and Wine (OIV).

According to it, the world wine production will decrease by 4% in 2021, up to 247.1-253.5 million hectoliters (mhl). In comparison with the production average over the past 20 years, the decline will be 7%. The overall wine production in 2021 can be considered extremely low, it will approach the historically lowest level recorded four years ago. In 2017, the world produced 248 million hectoliters of wine.

World wine production

It is expected that the largest decline in production will be in Europe—in annual terms, it will be 13%, up to 145 million hectoliters. The winegrowers were let down by bad weather conditions that also affected the three largest wine-making countries: Italy, Spain, and France (that account for 45% of world wine production).

Wine production in EU countries

Due to frosts in late spring, harvests in New Zealand suffered. There the volume of wine produced in 2021 will decrease by 19%, up to 2.7 million hectoliters. New Zealand was the only country in the Southern Hemisphere to cut production.

Wine production in the Northern Hemisphere countries outside the EU (including Ukraine)

Among the major wine-producing countries in the EU, Germany (4% increase), Portugal (1%), Romania (37%), and Hungary (6%) show harvests exceeding 2020 figures.

In the United States, wine production in 2021 is expected to be 24.1 million hectoliters and that is 6% higher than in 2020 when severe fires raged in the west of the country. However, due to the summer drought in some wine regions in the United States, this year's volumes are 3% lower than the average five-year production level.

Wine production in the Southern Hemisphere

Poor harvests are not the only reason for the rise in wine prices the suppliers state about. They also mention the rise in the cost of packaging materials. The prices for cork and screw caps increased up to 60%, for labels—up to 50%, glass—up to 20%, and cardboard—up to 80%. The growth of logistics costs on European routes reaches 200%, the cost of container logistics has tripled.

Dynamics of prices for alcohol produced in Ukraine

According to the State Statistics Service, the producer price index (KVED section 11) amounted to 108.6% in November 2021 when compared to December 2020.

This section includes the production of soft drinks and mineral waters, the production of alcoholic beverages, mainly by fermentation, beer and wine, as well as the production of distilled alcoholic beverages.

The change in consumer prices in November-2021 to December-2020 in the category of products "alcoholic beverages and tobacco products" amounted to 9.2%.

The State Statistics Service does not publish data separately for Ukrainian wine products.