• Production falls to lowest since 2002
  • Consumption still behind
  • France pays EUR47m to rip out vines
Consumption lags production by nearly 20m hectolitres - OIV

Consumption lags production by nearly 20m hectolitres - OIV

World wine production is set to fall to its lowest level for eight years this year due to cut-backs in Europe, the US and Australia, new figures show.

Wine production will fall by between 2.5% and 6% in 2010, according to the International Organisation for Vine & Wine (OIV). Falling production will help to drain a world wine glut that has caused serious headaches for many major producer nations in recent years.

The US, European Union (EU) and Australia have seen the biggest cuts. Production in the US is set to fall by 9% to 19.9m hectolitres in 2010, while the EU will see production drop by 6%, to 151.9m hectolitres. Estimates vary on the size of Australia's grape harvest for 2010, but the country's Government has reported a 12% fall on 2009.

"It remains to be seen whether the drop in production will affect wine prices," said the OIV's director general, Federico Castellucci.
   
Despite efforts to mop up the world's wine surplus, consumption still lags production by a considerable margin, according to the OIV. It said that global wine consumption is set to be 239.8m hectolitres, while production will be around 259.2m.

EU officials are offering to pay winemakers to rip out their vines as part of a strategy to make the bloc's wine industry more sustainable and competitive. France's Government announced today (18 November) that it has spent EUR47.2m (US$64.7m) in the last year on compensation for winemakers who have chosen to rip out vines. Around 7,000 hectares have so far been destroyed.

French wine production is set to fall by 2% in 2010, according to the OIV, while production in Italy will drop by 11%. However, figures show that Spain, which is the EU's third largest wine producer, will not shed any production in 2010.

It is largely the smaller producer nations in Central and Eastern Europe that are bearing the brunt of the EU reforms. Wine production will fall by 60% in Czech Republic and Slovakia this year, by 30% in Romania and by 23% in Austria, OIV figures show.

For the full OIV figures, with commentary in French, click here.