The global wine market is a concerning one – production levels reached a historic low in 2023 while sales were hampered by falling demand and high average export prices.
Although the total volume of wine exported dropped to 99m hectolitres in 2023, this was offset by a high export value, which reached €36bn ($39bn). The average price per litre of exported wine hit a record high of €3.62.
Global wine consumption has been gradually declining since 2007, with recent drops led by falling interest in China. Covid-19 lockdowns “exacerbated” the trend, according to the International Organisation Of Vine and Wine’s (OIV) annual report on the global wine trade in 2023.
A rebound in wine consumption following the pandemic has been “dampened” by the increasing price of wine – driven by surging energy and raw-material costs and supply-chain disruption which have had a knock-on effect on production and distribution costs.
Here are some of the most significant facts from the OIV report.
France becomes world’s largest producer, overtaking Italy
France overtook Italy to become the world’s largest wine producer in 2023, making an estimated 48m hectolitres.
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By GlobalDataThe country made just over a fifth of the world’s wine – exceeding its five-year average by 8.3% - in 2023.
But the news may not be welcomed by winemakers tackling oversupplies and falling consumption – in recent years the French government has provided support to wineries to destroy excess stock and pull up vines.
It has also given the go-ahead for surplus wine in certain regions to be turned into spirits with a high alcohol content, which are often used as biofuels.
France is Europe’s largest consumer of wine and second-largest in the world, drinking 24.4m hectoliters in 2023 – 2.4% less than 2022. The US was the world’s largest wine consumer in 2023, with 33.3m hectolitres of wine drunk (3% less than 2022).
France’s exports in 2023 were less buoyant, hit by weakened international demand. The country was one of the largest contributors to declining wine exports worldwide last year – falling 800,000 hectolitres and €300m.
Italy, Spain and France combined exported over half (56%) of the world’s wine volumes last year and 63% of total export value. All three countries saw both volume and value declines. France remained the highest-value exporter.
Export trends suggest bulk market stronger than bottled
Global wine exports were “significantly impacted” in 2023, dipping to a 13-year low led by bottled wine.
The OIV cited low production volumes in the Southern Hemisphere, high average export prices and weakened international demand for the results.
Exports fell 6.3% in volume to 99.3m hectolitres (the lowest recorded since 2010) and sank 4.7% in value to €36bn.
The dip was driven by bottled wine exports, which fell by the highest amount in both volume and value – suggesting a potential move towards cheaper products.
Bag-in-box and bulk wine, the majority of which will be cheaper than bottled, declined at a slower pace of 4% year-on-year in volume terms (compared to 9% for bottled wine).
The average price of bag-in-box wine exported also decreased, falling 7% to €0.70 per litre. Despite representing 33% of total world wine volume exports in 2023, bulk wine comprised only 7% of the total value.
Sparkling wine witnessed what the OIV called an “unexpected decrease” of 4% in volume compared to 2022 and a 1% drop in value. However, the average export price of sparkling wine grew 4% to €8.20 per litre.
In country terms, the largest contributors to the decline year-on-year were Chile (down 1.5m hectolitres), South Africa (down 0.9m hectolitres) and France (down 0.8m hectolitres). The US, New Zealand and Argentina all exported 700,000 hectolitres fewer in 2023 than 2022.
Canada saw a particularly large drop in volumes (47%) of bottled wine, as did the US (20%), Argentina (24%) and Chile (21%). Chile, the US and Argentina also saw major drops in the value of their bottled wine exports.
Türkiye’s wine industry faces major headwinds
Türkiye has the fifth-largest area under vine in the world but has lost around a fifth of that in the last decade.
In 2023, the OIV estimated it had 410,000 hectares under vine.
The country’s winemakers face domestic barriers from its conservative government – president Recep Tayyip Erdogan is reportedly teetotal and famously became embroiled in a debate over whether anise-flavored spirit raki or yogurt-based ayran was the country’s ‘national drink’.
Erdogan’s government banned online sales of alcohol in 2011. Alcohol marketing is prohibited and retail sales restricted. In January, it was reportedly mulling an alcohol deposit scheme that would require winemakers to provide hefty financial collateral to cover potential future taxes or administrative fines.
Despite having one of the world’s largest surface areas of vines, a mix of historic, religious and political reasons mean only a small percentage of those are used to produce wine grapes. The country does not appear in the OIV’s top-20 producers list.
“Türkiye’s wine market holds plenty of promise for the future, but until now growth has been domestically oriented with exports remaining low,” the Wine And Spirits Education Trust (WSET) wrote last year.
“Today we are hopeful that an increased focus on native varieties and efficient marketing can enable Türkiye to capture the attention of curious wine lovers around the world who are in search of new tasting experiences.”
China plays “central role” in declining world consumption
The OIV said the decrease in China’s consumption, averaging a loss of 2m hectolitres annually since 2018, has played a “central role” in driving down global consumption figures.
Approximately 24.7% less wine was consumed in China in 2023 compared to 2022, totaling 6.8m hectolitres.
The country dropped from eighth-largest wine consumer to ninth in 2023, overtaken by Argentina, which drank 7.8m hectolitres of wine.
China’s consumption has been declining since 2018 – when consumption sat at 17.6m hectolitres. The two decades prior were characterised by “rapid growth in consumption”, the OIV said.
Imports in China also declined for the sixth consecutive year in 2023, dropping 26.1% in volume to 2.5m hectolitres and 21.7% in value to €1.1bn.
Ian Ford, founding partner of Hong Kong-headquartered drinks consultancy Nimbility, told Just Drinks he thought the decline in shipments to China had “largely bottomed out”. He predicted the revival of trade with Australia in March could provide an “inflection point” in declining shipments to China.
However, he cautioned: “The China wine market is unlikely to boom again any time soon.
“Economic factors are definitely at play here. Consumer confidence has wavered, discretionary spending on and consumption of alcohol has decreased.”
