Wine Geopolitics
Few things to mention about the GEOPOLITICS of wine …let’s try to explain and be wine correct .
Italy has escaped the cleaver of duties, and we can only be happy about that from USA . But the problems on the carpet are not over. On the other side of the world, in China, the market situation is very complicated, and it was even before the onset of Corona virus. Imports of bottled wines fell by 10% (4.6 million hl) in 2019, and what is surprising is that it is not only the French (-21%), but also Chileans and Spaniards who are losing market. Australia confirms the record in value, but again there is a sharp slowdown in shipments: if in 2017 quarter-on-quarter it was up 40-50 and also 60%, we are now at 1-2%, with annual cumulative of only 3%. Italy stops at 1%, but for our country this market is and remains marginal, nothing compared to the USA.
The recent fortunes of Australian wines on the Chinese market have had a beneficial effect of easing competitive pressure in the UK and US, but if things go ahead at this pace (and here the impact of the virus and its long wave could be devastating), Australians are also expected to be forced to rethink their strategy by returning to compete in traditional markets. And the same could be done by Chileans, who have progressively replaced Washington with Beijing at the top of the list of destinations, but plunged from the quarterly average of 30% in 2017 to -10% and -13% in September and December 2019. And Americans are also not exempt from the problem, as they concentrate 11% of their exports between China, Hong Kong and Taiwan.
And you know, when there's a surplus of supply, prices start to go dangerously down. In the United States, we may soon find ourselves ( Italian wines & wines in general )competing – even without duties – with a lot of wine designed for the eastern market, but forcibly relocated to the West and also on sale. So there will be an abounded offer of wines destined to China reach USA and the overall price of wines will drop everywhere with terrible consequences for all ,and off course mother nature as usual will save us ,,,,no rain no grapes prices will spike again .
Australian& NZ ( new world in general ) wines are very good industrialized products however the lack of varieties of grapes that only in the old world grows will make them loose the market share cause of lack of identity and the consumer is becoming more sophisticated and willing to grab special limited productions …they want identity craftsmanship experience handed by generations ….
China shipping has reached it’s tall containers with food and wine redirected to South Korea Japan, containers in China cant be cleared of customs as thousands are lying parked waiting for dispatch but so far the employees due to the Corona Virus are unable to return .
Tom & Jerry syndrome …. We are getting better and the other are getting troubled we thought we could soon overcome ….and we will .
Drink Smart Drink Safe and Drink Italian!