|  Coincidentally, as the Morgan Stanley Report was being announced on Monday the 28th October, OIV was also releasing the data of the current year production on the same date. When our news report Morgan Stanley Study Predicts Global Shortage was published on October 31, the dissent note was sent by Mr. Federico Castellucci, the Director General of OIV on November 7. He said that the Stanley Report was erroneous and did not recognize production of all the producing countries and members of OIV. He referred us to the Report released by OIV.
A Report in the Guardian yesterday summarizes the figures released by OIV in conjunction with those compiled by La Monde. After a bad patch in 2012, output is back to the level of 2009. Italy is still the world's top wine producer, ahead of France, with output close to 45m hl, up 2%. After a particularly poor performance last year, volume is rising again in France (up 7%), totaling 44m hl. But it is still well below its 2011 record, when it outdid Italy. In third place, Spain has registered the biggest increase, with output soaring by 23% this year to reach 40m hl, according to the report.
These three countries account for 45% of global production, which the OIV puts at 281m hl, and two-thirds of the EU total. The most recent member of the EU, Croatia (which joined in June 2013), contributed 1.4m hl to the overall figure. Among the other former eastern bloc countries, Romania and Hungary both did well, and output in Germany (9m hl) was steady.
OIV also questions the reason given by Morgan Stanley - of vine pulls. According to the OIV, the drop due to vine pulls was only half that of 2012. EU had already stopped subsidizing the uprooting of surplus vines in 2011, following the destruction of 270,000 hectares of vine across the EU. Recognizing the earlier vine pulls, Mr. Catellucci said, "With a loss of 300,000 hectares of vines compared with the year 2006, the 2013 harvest has been fairly significant thanks to a productivity which continues to increase despite the abrupt stop caused by adverse climate conditions in 2012."
Outside the EU, all the countries recorded significant growth in vinified production, with the United States producing 22 MhL. There was also an increase in South America - Chile hit a new record at 12.8 MhL and Argentina's vinified harvest was 15 MhL (+27%) after a poor year in 2012. New Zealand recorded a record level of production of 2.5 MhL this year, while Australia could reach an estimated production of 13.5 MhL, says the OIV Report.
There is a consolidation of consumption this year on the cards. ‘World wine consumption estimates lead us to anticipate a consolidation in demand thanks to the geographical expansion of the markets in new consumer countries,’ according to OIV. Despite a slowdown in China there has been an increase in demand from Asia, Central Europe and surprisingly Africa.
At the recently held World Wine Symposium where I met Antonio Amorim, Chairman of the Porto based biggest cork producer in Portugal, Amorim, he told me that despite the business taken away by the screw-cap industry and the economic slowdown, they had increased their sales last year by about 10% and are working hard to maintain the sales levels this year. What has helped them is the exploding Champagne market in Africa. Apparently, Pernod Ricard’s Mumm has opened an office in South Africa-not for the local market but to supply the rest of the African market which includes countries like Nigeria. This would mean higher sale of other sparkling wines as well. Since Amorim is a major supplier to the Champagne producers, this spells higher sale of their corks and that made him smile.
For a detailed OIV Report, read http://www.oiv.int
Subhash Arora
Tags: Morgan Stanley, OIV, Federico Castellucci |