As quoted by Eric Asimov in the New York Times (March 23, 2012), “Angelo Gaja issues a missive on the state of the Italian wine industry.”
Europe’s Winds of Change
by Angelo Gaja
The Italian wine market is going through a phase of profound change that offers contrasting clues for interpretation.
Domestic consumption is dropping while exports are growing. There are producers who are finding it hard to sell their wines and their cellars are still full of wine. Others take advantage of market opportunities and they empty their cellars with ease.
The current trend of pessimism contrasts with the rhetoric of optimism. Where does the truth lie? The numbers don’t tell the whole story but they help us to understand the current situation.
Nearly twenty-five million hectoliters of Italian wine are exported annually and domestic consumption is just over twenty million hectoliters. Together, these numbers constitute a demand of forty-five million hectoliters, to which we need to add the demand for wine by vinegar producers and users of industrial alcohol. The annual average production of wine in Italy in recent years has strained to meet demand. Will Italian wine fail to rise to the occasion?
Causes that Contribute to a Balancing of the Market
Global warming has contributed to this stress, as has the advanced state of obsolescence of 50 percent of the vineyards in Italy today. But it has also been accelerated by the effects of the European market reforms that were called for, imposed, and implemented by Brussels on August 1, 2009.
These reforms were inspired by common sense — a rare commodity these days. And they were intended to put an end to the waste perpetuated by more than thirty years of public subsidies devoted to the elimination of surplus. And they were implemented by the introduction of measures aimed at re-balancing the wine market.
Once squandered, [European Economic] Community contributions are now devoted to the co-financing of promotion of European wineries beyond Europe’s borders and they have helped exports take off despite the current crisis.
In a short period of time, the number of wineries exporting their products has grown more than 30 percent. A significant number of artisanal producers has begun to ship wines abroad and their success has encouraged to them to combine their resources and to travel beyond Italy’s borders to tell their stories and share their passion, traditions, and innovations. And in doing so, they have helped to contribute to the greater respect that Italian wine now commands throughout the world. As a result, there are many who now believe that the Italian wine market is undergoing a profound and unprecedented structural change that requires them to adopt a new and different cultural approach.
More must be done to monitor and prevent the production of counterfeit wine.
We must stop thinking that we need to compete with one another and that the winery next door is an enemy.
It’s inconceivable that the windfall of European Economic Community contributions for the co-financing of exports beyond Europe’s borders continue uninterrupted: why should European citizens be taxes to achieve this goal?
We must learn how to build business networks using only our own funds.
The domestic market continues to be the most challenging. But its value is undiminished because it’s what shapes and builds business: it’s a mistake to dismiss and neglect it.
The producers whose wines enjoy a healthy presence in the Italian market are often the same producers who reap the rewards of foreign markets.
The balance between supply and demand puts the greatest responsibility on all of our shoulders. And it should impel producers to grow and to become more capable businessmen who are better prepared to rise up to meet the challenges of the market.
March 19, 2012
(Translated by Jeremy Parzen for DoBianchi.com.)