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27 August 2021

Vinitaly Observatory-Nomisma Wine Monitor

The gradual re-opening of the Horeca channel combined with a desire for “revenge spending” on the part of consumers all over the world are driving wine purchases on a global scale. Analysis of imports for the main markets in the first half year indicates a significant recovery compared to the same period in 2020, up by 8% for sales prices for International wines.

When compared to the same pre-covid period (1st half year 2019), the change at aggregate level is negative (-1.7%) but for 8 of the 12 markets analyzed, the recovery was higher than the import level prior to the pandemic. In other words, the recovery for imports was so impressive that it overtook values posted in previous years, demonstrating a desire to return to "normality". Its positive effects on the world wine trade have already been seen in the first half of this year, that is to say in early summer when re-opening of restaurants was not yet at full swing.

In detail (table 1), analysis of imports in the first half of 2021 in relation to individual markets indicates negative changes in values only for China (-10%) and Japan (-8%) compared to the previous year, joined by the United States and the UK in the two-year comparison (and therefore prior to the outbreak of the pandemic).

On the other hand, the majority of markets analyzed not only highlighted positive but actually two-figure variations - as in the case of Switzerland, Russia, Australia, Norway, Brazil and South Korea.

In this context, Italian wine purchased followed the same trend line, albeit with some differences. First and foremost, compared to last year, Italian wines “outperformed” the market trend in Germany, China, Russia, Australia and South Korea. More limited growth was seen in the United States - but this is also in the wake of the "boom" in the first two months of 2020, when American importers rushed to make purchases given concerns of the possible imposition of additional duties threatened at the time by the Trump administration. This "out of line" trend is demonstrated when comparing purchases of Italian wine in the first half of 2021 compared to two years ago, that reveals +6% against -1% in terms of overall imports.

The downturn in the UK is also not entirely true. Following Brexit, many traders and retail chains have shifted their operational centre of gravity to the continent, thereby giving rise to business triangulations that have moved wine imports to neighbouring countries. One of these is Belgium, with the result in the first half 2021, significant flows of Italian wine were purchased by Belgium and then marketed through retail chain outlets in the UK.

Lastly, a final comment must refer to China. The significant increase posted for Italian wines compared to a total decrease in imports was largely driven by the "vacuum" on the market left by Australian wines given the on-going trade war between the two countries which, as is well known, saw the Beijing government impose duties of more than 200% on wines imported from Australia.

Over and above such clarifications, the underlying trend associated with the resumption of world trade highlights a recovery for medium-high range wines, mainly linked to the Horeca channel and the desire for "revenge spending" shared by all consumers worldwide in this historical moment. It is therefore no coincidence that exports of Champagne in the first half of 2021 grew by 60% compared to the same period in the previous year, on a par with the Bordeaux and Burgundy red wines; much the same was seen, albeit with smaller yet still "impressive" variations, for PDO red wines from Piedmont and Tuscany, with exports respectively up by 24% and 20%.

 

Photo by Dan-Cristian Pădureț on Unplash