Global Wine Industry
The global world of wine is in rough shape right now. There is an oversupply of wine around the world and that is impacting all aspects of the wine trade..
Maybe you have heard about the protests taking place in Europe: grape farmers are protesting in France, dumping farm equipment and manure on the local legislative buildings and blocking road access to Paris. Similar protests have taken place in Spain, Italy, Poland, the Netherlands and Bulgaria.
These protests are mostly about taxation, legislation and regulation that the farmers believe would make their jobs more expensive and labour-intensive.
Of course this wouldn’t normally be a huge issue, but with sales around the world at record lows, many farmers believe that their livelihoods are in jeopardy.
The protests in Europe are not unique. In Riverland, Australia farmers have protested the low prices of their grapes. To put that into some perspective, Riverland is Australia’s largest wine-grape producing region by tonnage, and in 2023 was responsible for 34% of the country’s total crush. However, they crushed 28% less in 2023 than in 2022 mostly due to the year’s bad vintage condition.
Pair that with the drop in demand for wines from these areas and growers are being paid a third of the cost of production. Many fear that due to the culmination of these detrimental factors, 2024 will be their last harvest.
Closer to home in British Columbia, wine growers are dealing with a one-two punch that may in fact change the course of the industry in the province.
Firstly, a drop in temperature for two consecutive nights in mid-January may have severe consequences for the vines, ruining the entire 2024 vintage. Some wineries in the Okanagan Valley are reporting a 90% loss in grapes. If you have not been, it is the northern tip of the Sonora desert and is playground for tourists all summer long. The dry, desert-like temperatures make a perfect place for summer tourism. As a bulk of the tourists are from Alberta who have a thirst for the wines, they account for a substantial portion of wine club membership at most wineries.
Secondly, around the same time as the devastating cold snap, the Alberta Gaming, Liquor and Cannabis (AGLC) sent a cease and desist letter to the Okanagan wineries over allegations that they are avoiding taxes by selling wines direct to consumers. According to a 2018 Supreme Court decision, the AGLC may actually have the right to restrict purchases that were not processed through provincial licensing. The timing couldn’t be worse.
As the younger generation of beverage consumer are reaching for ready to drink (RTD) beverages, cannabis-infused drinks and low/no alcohol drinks, that leaves the wine industry grappling with the new landscape.
The local wineries here in PEC are tiny in comparison to the massive operations in more established wine regions, but they too need support. What is happening globally is also cause for concern here. A slight shift in taxation, or consumer base, and the small family owned and operated wineries here might not be around much longer. It is up to us to grab a a bottle and show support. And sing the praises of the wines here when we are out in the world. Bring some with you the next time you travel abroad and share or give to other interested wine drinkers.