DAN'S WINE BLOG - CHALLENGING TIMES

Friday, November 25, 2022

?We are living in challenging times both politically and economically.

?For obvious reasons I won’t get into the politics, however on the economic side, we are all aware of rising interest rates and grocery prices, so don’t be surprised when your favourite tipple starts going up in price. Chances are that the producer/winery is raising the price in order to survive rather than “profit gouge” as all the energy companies are currently doing.

?Here are some examples as to why the price of wine is inevitably going up:

?According to Vitisphere, one small(ish) Champagne grower (15 hectares) had their electricity contract which was costing them around €18,000 a year expire recently. The provider’s new contract will cost them around €86,000 a year. Holy carp Batman! They are going to have to seriously raise their prices, which in turn will slow down their sales – “lose/lose”.

?In Spain one of the main glass bottle producers, Vidrala, has just advised that they will be raising their prices as of the New Year because their profits have dropped by nearly 40% over the last six months.

?In Italy many wineries were hit with a 20% price increase on glass in April and have just been advised of a further 22% increase. The bottle manufacturers are blaming the ongoing increases in the price of gas (massive amounts of which are used to melt sand/silica into glass) as the reason for the increases. The skyrocketing price of gas is being blamed on the unprovoked invasion of Ukraine by Russian dictator, Putin.

?In addition to the escalating cost of bottles, many wineries around the world are either not having their orders accepted or more often only receiving bottle part-orders, such as a California winery that recently ordered 15,000 bottles and only received 3,000 bottles with no advice as to when or IF they will receive the rest. Half bottles, big bottles and heavy bottles are no longer available.

?This situation has been caused by the European loss of “cheap” Russian gas. To put it into context Europe has 126 glass making plants across 23 countries, which by their very nature have to run continuously and cannot be turned off, as the glass would solidify inside the furnace and destroy it. So with the escalating cost of gas, these plants have been forced to reduce their production as close to the minimum as possible and have prioritized their production to certain industries such as car manufacturing. In some countries in Europe there have been up to fifteen gas price increases since the start of the unprovoked invasion.

?I haven’t heard (yet) of this happening to Aussie wineries, but I guess it is only a matter of time before the cost or shortage severely impacts on bottlings here.

?Therefore Australian winemakers, now would be an excellent time to consider and investigate alternative packaging options – small casks (1.0L), cans, sacks or best of all the Packamama slimline bottles made from recycled PET plastic. This excellent solution for all but long cellaring wines, requires massively less energy than producing glass bottles, recycles existing plastic and is way more environmentally friendly than glass. A 10-pack of slimline bottles takes up the same space as a 6-pack of 750mL glass bottles and weighs less, ergo a significantly smaller carbon footprint from start to finish.

?Check this outstanding innovation out (see website link below) already being used by Taylors Wines and Accolade’s Banrock Station.

?Website Link: www.packamama.com

?Well that’s me done for another week, please stay safe and enjoy #australianwines and where possible drink #emergingvarieties. Cheers, Dan T.