“Many people don’t see a future here”: winegrowers have to clear their vineyards due to oversupply

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It sounds strange, but it’s true: the world is swimming in red wine. The situation is so dire that winegrowers have started clearing their vines, especially as overproduction has driven down grape prices and now threatens the livelihoods of countless vintners and viticulturists.

These are particularly affected in Australia, where a combination of corona-related cost increases and Chinese export restrictions have boosted supply and depressed prices in the country. This has serious consequences: “There are a lot of people who don’t see a future in the wine industry,” Lyndall Rowe, president of Riverland Wine, an industry group that represents winemakers, told Bloomberg.

Demand is falling even faster than production

Countries such as the US, Spain and the wine country France are also confronted with the problem of oversupply. What’s curious, however, is that while global production hit a 60-year low last year, demand for wine is currently falling even faster.

Australia also produced less wine in 2022 and 2023 than it had in fifteen years. However, the country continues to struggle with historically high inventory levels, as industry group Wine Australia wrote last November.

Since the outbreak of war in Ukraine, the costs of raw materials such as fuel and fertilizer have also increased. Insurance premiums have also increased in connection with climate change. “The recent dramatic increases in input costs have destabilized wine’s very fragile economic model,” Richard Halstead, chief operating officer at alcoholic beverage research firm IWSR, told Bloomberg.

Boom in non-alcoholic drinks

The changing drinking habits of people most affected by red wine are also likely to have an impact. According to Christophe Chateau, spokesperson for the Bordeaux Wine Council, people are now increasingly choosing sparkling, rosé or white wines with a lower alcohol content than red wine. Generation Z is also consuming less alcohol, which has led to a boom in non-alcoholic drinks.

Something similar is reported from Spain. While fewer and fewer people here pour red wine for themselves, the demand for white wine is still high. “Farmers will have problems in one or two years because red wine cannot be converted into white wine,” said José Luis Benítez, general director of the Spanish Wine Association.

In order not to simply abandon winegrowers in this situation, the French government has decided to provide 200 million euros to help them demolish their vineyards and convert their wine into ethanol.

Many winemakers are still rooted in tradition

A further €150 million was raised after Bordeaux winemakers joined protests by French farmers to demonstrate against the abolition of EU fuel subsidies. The amount of one million dollars is intended to support wine growers in clearing vines and growing alternative crops.

However, especially with the latter, there are doubts as to whether this can be achieved so quickly. Because: According to Richard Halstead, adjustments are particularly difficult for a sector such as wine growing. Many winemakers have worked in the same way for generations and are strongly rooted in tradition.

Australian winemaker James Cremasco puts it a little more drastically to CNN. “There will be no next generation of family winemakers. They will all become large companies and all the young people from the area will work there.” (ced)

Source: Blick