Friday, December 5, 2008

Export of Italian wines: crisis in Tuscany and success in Piedmont

It is the moment of Piedmont for Italian wines (in the picture a view of the village of Barolo).

According to the data reported in an article of "Sole 24 Ore" of 29 November 2008, there has been a redistribution of preference in the world public with regard to the Italian wines in favour of Piedmont.

After a long period of growth for the export of tuscan wines, there has been during the period January-August 2008 a decrese of 4.2% in value and 9.2% in volume compared to the same period of 2007, while at the same time, the wines of Piedmont enjoyed +17.3% increase of export during the first semester of 2008. It is true that the first semester has seen the release on the market of Barolo's 2004, a fantastic vintage that has received unanimous praise with the Italian and international wine critic.

However, the negative data regarding Tuscan wines may also have other reasons apart from the competition of barolo. First of all, as it is recognised, Tuscan wines are relatively more expensive compared to other Italian wines and this trend has been growing during the recent years. While focusing on the growing export, Tuscan winemakers have forgotten to moderate their price list and take into account the competition of other wine countries, the relative strenght of the euro (and weakness of the dollar, major export market for Tuscan wines) and the world economic crisis. In addition, the recent scandal of Brunello with the bottles of some producers temporarily kept out of the market and the non exceptional quality of 2003 Brunello released in 2008 may have influenced the decisions of wine importers, notably in the US (no official data are available yet for the export of Brunello in 2008). Since Brunellos 2004 to be released in January 2009 should reflect an outstanding vintage, one can expect (and hope) a re-launch of exports for next year.

However, the signals arriving from the Italian market are not reassuring and the current economic crisis will further reduce the consumption of the Italian consumers in the medium-high price segment.

Most likely, we will see a reduction of prices in the next months that will benefit first of all wine consumers but will make life difficult in particular for the new entrants in the wine market.