China's wine imports are contracting fast (pic: iStock)

China's wine imports are contracting fast (pic: iStock)

Global wine consumption recovered in 2021 in both volume and value but challenges loom big including global supply chain bottleneck and energy crisis caused by Ukraine war, and China’s persistent market downturn.

Global wine consumption recovered in 2021 in both volume and value but challenges loom big including global supply chain bottleneck and energy crisis caused by Ukraine war, and China’s persistent market downturn.

According to the latest data released by OIV, world wine consumption in 2021 is estimated at 236 mhl, marking an increase of 1% compared 2020, which means it has inverted the negative trend that started in 2018 with the decline in China’s consumption (which has lost on average 2 mhl per year since then).

China currently ranks as 7th biggest wine consumer and 11th biggest wine producer, according to OIV.

Global wine consumption rebounded in 2021, says OIV (pic: iStock)
Global wine consumption rebounded in 2021, says OIV (pic: iStock)

This downward trend was accentuated in 2020 by the covid-19 pandemic, which brought a depressing effect on many large wine markets. In 2021, the uplifting of Covid-19 related restrictions contributed to an increase in consumption in most countries around the world.

But it’s worthy to note that the consumption level from last year despite gains is still the lowest since 2002.

Wine trade in 2021 further expanded. With a volume of 111.6 mhl, the largest exported volume ever recorded in history, world wine exports in 2021 have increased by 4% compared to 2020, and have boosted even more in terms of value, with €34.3 billion EUR, registering a yearly increase of 16%.

France led global wine exports by value (€11.1 billion), followed by Italy (€7.1 billion), Spain (€2.9 billion), Chile (€1.7 billion), Australia (€1.4 billion), the US (€1.2 billion), New Zealand(€1.2 billion), Germany (€1 billion), Portugal (€0.9 billion) and Argentina (€0.7 billion).

Supply chain bottlenecks and energy crisis in 2022

However, OIV noted that global wine market in 2022 is confronted with notable challenges, top of which include global supply chain disruptions, Ukraine war-induced energy crisis and China’s temporary lockdowns.

The war in Ukraine has set off a series of new supply-chain bottlenecks. So has a surge in Covid cases in China, which has led to temporary lockdowns in parts of the country. In addition, the war is putting unprecedented pressure on the global energy market, which was already experiencing a rise in prices in 2021 particularly for dry goods such as glasses, corks, capsules. Moreover, the sanctions imposed by the EU on Russia are putting further pressure on the market.

Also, potential trade disruption between EU and Russia might cause some concerns, especially in Italy, France and Spain. As a reminder, Russia is the 10th largest wine importer in the world in 2021 (accounting for about 2% of the world imports) and the 8th largest wine market in terms of sales value.

All these as OIV warns will force wine trade to reconsider supply options and will create inflationary pressure on end consumers.

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