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The wine industry is now under threat from the rising costs of energy, transport and materials. This is the key message of the ProWein Business Report 2022, presented by Prof Simone Loose, Director of the Institute of Wine and Beverage Business at Hochschule Geisenheim University. For this, 2,455 experts from 47 countries were surveyed, including 567 producers and 592 importers and retailers from Germany.
85 per cent of those surveyed see the price increases for energy, glass and paper as a major threat to their companies. Of the wine producers, 62 per cent are strongly or very strongly affected by rising energy costs, particularly in Spain, Austria, France and Portugal. Eleven per cent are no longer producing certain products as a result, especially those with small quantities and high production costs. Seven per cent of retailers have shortened their opening hours in order to save energy.
In addition, 66 per cent of businesses expect lower profits than in the previous year. 14 per cent of them fear that they will even slide into the red due to higher costs, but can still offset the losses with existing reserves. Seven per cent are currently at risk of closing down.
The disruption to global supply chains has affected 66 per cent of companies. The higher costs for transport and handling reduced the profit margin for 59 per cent of those surveyed. 29 per cent of wine producers and wine exporters even lost sales and customers because the transport costs made the planned business unprofitable. This mainly affected wine exporters from Australia, Argentina and Chile. Almost all market participants felt the effects of supply bottlenecks for materials, spare parts and auxiliary materials, with 92 per cent of producers suffering from delays in the delivery of glass bottles.
Wine professionals and producers also remain pessimistic for 2023: after 35 per cent a year ago, 55 per cent now fear a reluctance to buy as a result of the possible economic slowdown. Producers in particular expect the situation to deteriorate significantly.
Despite this, only a third of companies intend to stop or reduce their investments, particularly producers from Germany (57 per cent) and Australia (67 per cent). Online business is to be expanded further. Over 80 per cent of export-oriented producers from Portugal, Australia, Spain and France want to open up new sales markets at home and abroad. This is less the case in countries such as Germany (36 per cent) and Austria (50 per cent), which are strongly focused on their domestic markets. Wines with low alcohol content and de-alcoholised wines are seen as sales trends for 2023 by 33% and 24% of the industry respectively.
(al / Source: Messe Düsseldorf; Photo: 123rf)