VINEX Regional Manager Report: Inge Straetmans, Europe
This week’s focus switches to Europe with an assessment of how the wine market is performing by, Inge Straetmans.
Overall picture
- The overall picture is hard and it’s the worst time ever to be a wine buyer and some are becoming scared about the lack of availability.
- In the 25 years I have been in the business I have not seen this before where buyers will openly show you their needs.
- They would never do that normally. There will be empty spaces on shelves from some counties which will have to be filled by alternative sources.
- There is, for example, no Vin de Provence rosé, no IGP Méditerannée in the market. We’ve traded a lot of Corsican rosé this year to replace Côtes de Provence.
- There is a general understanding in France that producers can’t just double prices because of a bad vintage.
- Some buyers will replace Spanish table wines for more wines sourced from across Eastern Europe, or wherever there's is best value. Volumes of some references are still there. Prices went up, the buyers' responded by shifting over to another reference.
Impact on prices
- Some buyers have been prepared to wait and have not bought everything at higher prices. But those that have waited will now find it harder to get quality wines near the end of vintage.
- In 2016 Spanish rosé was €0.35 per litre, in 2017 it went up to €0.80 and now it’s heading down to €0.70.
- In the coming weeks that could go down to €0.65 and €0.60 close to harvest time.
- However, we believe prices will be maintained as South Africa is now on the same level (with higher prices and exchange rate).
Alternative sources
- In 2017 a number of retailers moved in on South Africa as it's pricing was low and with reasonably good quality wine to find. But this year with reduced supply, producers are not responding to new tenders.
- There will be less difference this year between Chilean and Vin de Pays D’Oc wines across all the main varieties and we could see more Europeans buyers come back to buy from France.
Overseas demand
- The overriding factor is China. Chinese buyers still value French wines, above their own production, but we can expect this to change slightly over time. I’ve tasted some very good Chinese wines recently on the Concours Mondial.
- In three to five years China’s own production will have more of an impact. They have top quality facilities and equipmet, and are importing IP from all over the world.
Market trends
- I need South African Chenin Blanc in big volumes, whoever can deliver that will be king.
- Good quality Bordeaux wines, Sauvignon Blanc (around 12.0%) from the South West and juicy red wines like Syrah (at 13.0%) are also in demand.
- Some buyers are switching away from bulk if they can't find it, to bottled wine with increasing interest in Eastern European wines.
- It’s very hard to get higher end wines like Sancerre, Pouilly Fumé in bulk.
- There is less interest in big, high alcohol blockbuster wines and those with too much oak.
- With less Pinot Grigio buyers are looking to Eastern European Pinot Gris and Pinot Blanc. Particularly those bottled in a traditional Alsace bottle.
- The recent devasting storms in Bordeaux won't help when trying to secure volumes of quality bulk wine at reasonable prices.