After a record year, the wine industry faces supply chain and war impacts

Last year, global wine sales rebounded to a record level after governments removed coronavirus-related restrictions, according to the international wine group OIV. Supply chain interruptions and conflict in Ukraine could slow down global wine sales, which rose to a record level last year.

According to the International Organization of Vine and Wine (OIV), global wine commerce increased by 16% in value to 34.3 billion euros ($36.15 billion) and 4% in volume to 111.6 million hectolitres (MHL), both of which were record highs.

The equivalent of 133 ordinary bottles is one hectolitre.

According to Pau Roca, director-general of the OIV, “we saw an overall revival of the wine market in 2021.” The real question is how the industry will respond to the crisis in 2022.

After the virus caused logistical problems and rising costs, he thinks Russia’s invasion of Ukraine will make inflation even worse and hurt consumer demand.

He noted that Western sanctions against Moscow might damage trade with Russia, which spent 949 million euros last year on wine imports, largely from Italy, France, and Spain.

The world’s top three wine exporters, Spain, Italy, and France, accounted for a little over half of the overall shipments last year, according to the OIV.

For the year 2021, France’s wine sector has already recorded record export sales.

There were still a lot of imports from France to the United States in terms of value, with imports up 21% to 6.2 billion euros last year, according to the OIV.

As a result of the UK’s decision to leave the European Union, US imports rose by 13% to 13.9 million gallons. This made the US the world’s second-largest importer.

With constant imports of 14.5 MHL, Germany remained the largest importer by volume.

OIV says that global wine consumption grew by 1% in volume, which is the opposite of the trend that started in 2018 and was blamed on a big drop in Chinese wine consumption after a wine boom.

Weather-affected grape harvests in western Europe overshadowed record output in the southern hemisphere, with global production anticipated at 260 MHL in 2021, down 1% from the previous year.

The estimate was nonetheless higher than OIV’s November predicted range of 247.1–253.5 MHL, with Italian output being revised up significantly.