Finance

In 2022 your wine will be more expensive and it will come more often from ‘new wine countries’

You will be more expensive next year for all wine, but especially for white wine, says Joris Snelten, CEO of Delta Wines, which, in its own words, is the largest wine importer in the Netherlands.

This affects consumers, because in Europe we now drink more white wine than red and the preference for white wine is still growing. Furthermore, especially more expensive wines will become scarcer, thinks Eric de Bruijn, director of De Bruijn Wijnkopers.

Prices of wine and other raw materials up

The fact that the prices for wine will rise is because the price of the wine itself is going up, but mainly because the prices of all other raw materials that are needed rise. These ‘dry’ costs, in other words all costs except the wine itself, increase more than those of wine, Snelten says.

With the ‘dry’ costs you have to think of the costs for the glass for the bottle, paper for the label, aluminum for the screw caps, the cork, the capsules that sit over the cork, cardboard for the boxes in which the bottles are packed and the wooden pallets on which the boxes are placed.

Packaging more expensive than the wine itself

For the cheaper wines, the dry costs are relatively high compared to the wine itself. For the cheapest wines, the packaging is even more expensive than the content. A higher price for glass, among other things, therefore affects the consumer price for cheap wines, Snelten explains.

In addition, the costs of transport from the winelands to the store are rising. “In the 30 years I’ve been in the business, I’ve never seen such a ‘perfect storm’,” says Snelten.

10 to 15 percent more expensive

For a bottle of wine of around 3.87 euros (the average price for a bottle in the Dutch supermarket), the ‘dry’ costs are about 0.60 euros, Snelten calculates. A price increase of 10 to 15 cents for glass and of 30 percent for cardboard will hit hard.

The price of a cheap bottle of wine of about 4 euros will rise by about 10 to 15 percent, Snelten thinks.

“But the prices for expensive wines also have to rise even more,” De Bruijn thinks. After all, the harvest of grapes for more expensive wines is also lower, but there is more demand for better wines. “Due to the corona crisis, we want to spoil ourselves a little more, also at Christmas,” says De Bruijn.

Corona

The fact that the ‘dry’ costs have risen is due to the shortage of raw materials worldwide. Because of corona, many countries went into lockdown earlier this year.

But when these were abolished, the demand for all kinds of products and therefore for the raw materials needed for them rose much faster than had been expected, causing shortages in various areas. Wine suppliers also notice this.

Bad harvest in 2021

Then the price of the wine itself. The harvest in major European wine countries was disappointing in 2021. In Italy (the largest wine producer in the world), production fell by 9 percent compared to 2020, in Spain by 14 percent and in France by 27 percent.

Those three countries account for roughly half of global wine production.

More extreme weather

The lower harvest in those three countries was due to more extreme weather as a result of climate change, such as strong winds or heavy rain in the summer and night frost in the spring.

The latter particularly affects the production of white wine, because the offshoots, the fruit set of the white grape varieties (from which white wine is made) appear earlier in the year than that of blue grapes (which is necessary for making red wine) and these so are more likely to be hit by an early frost.

There is a scarcity of more expensive wines such as Champagne and Bourgogne from France, says De Bruijn. “In the wine region of Chablis in Burgundy, the situation is so dire that our suppliers have had to cancel the current contractual obligation for this year immediately. They rely on force majeure, they simply cannot deliver,” adds Snelten. .

More wine from other wine countries

Production did not only fall in the major European wine countries in 2021, that was also the case in New Zealand, says Snelten. In the Netherlands we don’t drink much wine from that country, but in the rest of the world that is more the case, he says. “That created a waterbed effect, which resulted in even more demand for white wine from Chile, for example.”

All this means that in 2022 we will drink less white wine from France, Spain and Italy and more from countries where the harvest was good. “In Europe this concerns, among others, Germany and Romania, and outside Europe, for example, Chile, South Africa and Australia”, Snelten thinks.

But more expensive

It is of course nice that we can still drink wine from other countries, but the disadvantage is that the transport costs for wine from these countries are higher because of the often greater distance. After all, it is more expensive to transport wine from Chile or South Africa to our country than from Italy or France. Those costs are in addition to the higher prices for other dry costs.

The costs for container transport are also rising sharply. Transporting a container from Chile to Europe is now twice as expensive as before, says Snelten. “There are additional problems for Chile, where it sometimes unexpectedly takes eight to nine weeks before containers can be loaded onto a ship.”

On top of that you have to pay a surcharge for the higher fuel costs that shipping companies have to pay, while it also does not help that the dollar has strengthened against the euro, so that the transport costs measured in euros have risen even more. Wine from countries such as Chile and South Africa is often a bit cheaper than that from Spain, Italy and France, but the sharply increased transport costs are now negating that, says Snelten.

It will be better

It will get better soon, though, he thinks. Because in a few months it will be possible to harvest again in the southern hemisphere, in countries such as Chile, Argentina, South Africa and Australia. If it is spring here, then it is autumn there.

And the harvest prospects in most countries in the southern hemisphere are good, said Christián Le Dantec, commercial director at Chilean wine producer VPST.

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