Lombardy:
Articles

The MiWine and the Market (First of Four Parts)
Staff Writer - March 26, 2004

1. Export Rewards Quality
   • The future depends on quality
   • Bottled wine fares better than the bulk product
   • The imports
2. ISTAT Italian Wine Production Figures for 2003
3. A vineyard Called Italy
   • Data from the latest Italian viticulture censuses
   • Main Italian grape vines types per land cultivated (data from year 2000)
4. Wine and Health

1. Export rewards quality

The market of the future requires quality
The most recent data about Italian wine exports confirm the trend toward quality that has characterized the Italian production across the board in the last ten years. As a byproduct of the quest for quality, the Italian wine production fell from an average 72 million hectoliters (over 1,902 million gallons) per year in the 80s, to 59 million hectoliters (less than 1,600 million gallons) in the 90s. The even lower production in 2002 and 2003 of 44.6 million (less than 1,200 million gallons) and 40 million hectoliters (less than 1,100 million gallons) respectively are due to the extreme weather conditions that affected the vines' productive cycle.

According to Istat (Italian Institute of Statistics) data, as of October 31, 2003 the global Italian wine export was at 10,617,543 hectoliters (280,485,796 gallons) per year, for a value of 2,202,657,000 Euros. This marks a 15.5% fall in volume and a 1.4% in value compared the same period a year earlier. In fact, prices rose an average of 16.3%, from 1.78 Euros to 2.07 Euros per liter.

The shipment outside the EU has been a little better, as the absolute values of export decreased by 4.2%, from 3,717,422 to 3,561,473 hectoliters, the value increased by 0.8% (from 1,069.929,000 Euros to 1,079,132,000 Euros).

As we can observe, the consumption is growing in Northern Europe, with Great Britain and Sweden leading the pack. in the non-European market, Russia increased its imports enormously, though the volume is still low overall. The United States shows the second highest growth in the Italian market by volume. Italy is the number one exporter of wine to the United States, by volume and by value, grossing $822 million, or 32% of the US market, while France exports 28% and Australia, second by volume, comes in third in value, gaining 22% of the market.

Bottled wine fares better than the bulk product
In 2001 and 2002, for the first time ever, the export of Italian bottled wines was higher than that of bulk wine, with 7,028,977 hectoliters (185,685,917 gallons) of bottled wine exported against 6,126,415 hectoliters (161,842,753 gallons) of bulk wine in 2001. In 2002, and 7,216,680 hectoliters (190,644,505 gallons) of bottled wine were exported compared to 5,494,089 hectoliters (145,138,468 gallons) of bulk wine. Considering yearly quantity and values for the 1993-2002 decade, the export of 2002 bulk wines diminished by 25.4% in quantity and 22.3% in value, while bottled wines increased by 26.5% in quantity and 52.9% in value.

France, Germany, Spain and Portugal, the main buyers of Italian bulk wines, have reduced imports dramatically, going from 8,567,521 hectoliters (226,329,948 gallons) in 1999 to 3,948,241 hectoliters (104,301,486 gallons) in 2002. The largest buyers of Italian bottled wines are Germany, United States, United Kingdom and Canada.

In 2002, the shipment of Italian bottled wine destined to other EU states increased 6.3% in volume and 13.4% in value compared to 1999. The export to non-European countries increased even more, marking a 32.4% growth in quantity and a 58.5% in value. The shipment of bulk wines diminished here as well, from 1,000,878 (26,440,398) to 854,763 hectoliters (22,580,448 gallons).

It is becoming more and more evident that a dynamic commercial politics based on quality, is the right path to follow to protect the 'Made in Italy' brand against an evermore aggressive market. Many new players on the international market, such as the United States, Australia, New Zealand, Chile, Argentina and South Africa, compete by producing large quantities and selling at lower prices. Australia in particular, continues its expansionistic commercial policy, marking a 13.6% global export increase in 2003, reaching peaks of 40% in Sweden, 30.6% in Holland and 27% in the United States. Within the EU it increased 4.6%. The EU importation of wine from non-European countries increased threefold in the last ten years, climbing to 9.1 million of hectoliters (240,396,553 gallons) from 2.7 million of hectoliters (71,326,450 gallons). In the same period, exports stabilized at around 12 million hectoliters (317,006,445 gallons).

The Import
According to Istat (Italian Institute of Statistics) data, as of October 31, 2003, the Italian wine imports were at 1,148,444 hectoliters (30,338,679 gallons), for a value of 150,575,000 Euros, marking a growth of 98.3% in volume and 25% in value over the same period a year earlier. The average price of foreign wines in Italy was 1.31 Euros per liter. The cost-per-liter last October 31, 2002 was 2.08 Euros per liter. The increase in import of wines in the medium-to-low price range is a side effect of the limited harvest of 2002 and 2003.

The main importerers of wines to Italy in this period were:

• Spain, with 671,068 hectoliters (17,727,740 gallons, an increase of 281.8%), at an average price of 0.41 Euros per liter, a decrease of 12.8%) and
• France with 310,858 hectoliters (8.211.999 gallons, an increase of 23.7%), at an average price of 3.22 Euros per liter.

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