WBWE 2016: Evolution of Bulk Wine Market

Jan 04: While wine connoisseurs love to flaunt their premium wine collections and reminisce about their visits to wineries, a sizeable chunk of the world wine market consists of bulk wines that are supplied and used by many of those wineries and importers including India, writes Subhash Arora who attended the 8th edition of the World Bulk Wine Exhibition as well as the annual presentation about the current scenario by Rafael del Rey, Director General of Observatorio Español del Mercado del Vino, Spanish Observatory of Wine Markets

World Bulk Wine Exhibition(WBWE) has established itself as a premium wine show on bulk wines and so far has been the only such platform in the world where the buyers and sellers come and valuate the latest in the world market. This is also a very useful and important platform where the two negotiate and finalize deals. The two-day annual Show was held on November 21-22 this year.

One of the interesting aspects of this Exhibition is a string of seminars on topical subjects presented by eminent speakers from different countries. In fact, I had been invited to speak on the Indian market in the 2014 edition. Besides, the inaugural seminar by the Director General of OIV which supports the exhibition (the bulk wine constitutes 40% of world business, the then Director General of OIV Federico Castellucci had told me when I was invited for the first time and had sought to know if I should attend it). Another very interesting seminar is a Presentation by Rafael del Rey, Director General, Observatorio Español del Mercado del Vino (Spanish Observatory of Wine Markets). He gives a detailed statistical analysis of the current market scenario, based on his collection and collation of data, updated till June of the current year. This is a very interesting seminar focused on the bulk market. It was no different this year and was attended with rapt attention by a full house.

The general evolution of wine trade remains impressive, although stabilized this year, said Rafael. Within the general evolution, bulk has remained around 10% of total value; now down to 9.5% up to June this year with total business of wines in €28.725 billion with bulk having a share of €2.732 billion YoY till June, 2016.
With a share of 3,850 million liters on YoY basis till 2016 exports of bulk wine out of a total of 9,965 million liters of total wine exported, bulk wine had a substantial share of 38.6%, highest during this millennium.

Italy used to be the global leader in bulk wines in value, till 2011 when Spain overtook and is now the leader both in terms of Euros and liters. Spain already overtook Italy in volume since 2003 when Italy cut down heavily on its exports to France. It is followed by Italy and France. Following them are Australia and Chile which are very close. USA and South Africa are the other two important bulk wine suppliers making the Top Seven.

Pricing

France and the USA are the only bulk wine exporters selling above 1 €/l, with most exporters trading at around €0.70/l. Spain has always been between at the bottom of the list (generally between €0.35 to €0.45, with the exception of 2013, after the short, much less-than-average 2012 harvest.

Importers

Germany continues to be the biggest importer of bulk wines followed by France (See Table). The UK, which does not produce much domestic wine relies on bulk imports and bottling within the country to save costs and the carbon footprints. USA, Russia and Italy, Chine Portugal, Canada and Sweden in that order make the Top Ten importer of bulk wines.

It is interesting to see Sweden in the list of Top Ten bulk wine importers. With practically no domestic production, Sweden imports large quantity of wine as Bag-in-the box packaging. Under the international convention, any packaging over 2 liters is considered bulk wine and hence the skewed results.
Another interesting observation made by Rafael was that China showed a substantial increase both in value (in €) and volume terms in 2016 (YoY-June 2016). With no specific laws in China determining or restricting the amount of bulk imported wine in its domestic wine. This was followed by France, Canada, Norway, Russia and Belgium, with positive rates between 1 and 11%. Denmark and UK grew in volume but not in value (buy more or less the same but cheaper), while Sweden spends more Euros in less wine and Switzerland, Japan and specially Italy reduced purchase in both litres and Euros.

It may be pertinent to note that a small amount of bulk wine finds its way either into India indirectly or in the form of BIO (bottled in origin) or for blending. Over a decade earlier, a few Indian companies used to import bulk wine but with the import duty of 150% and the local states not allowing the state duty benefits for such imports, it has been curtailed. However, imports of packaged bulk wines to a small extent is currently possible.

For more information, visit www.oemv.es

Comentario de / Comment of Wines Inform Assessors:

Está claro que conseguir precios rentables en el vino a granel de España, aunque también en los vinos embotellados es uno de los puntos claves para el sector -quizás disminuyendo la producción total,ver las cifras económicas en http://spainwinesnews-noticiasdevinoespanol.blogspot.com.es/2017/03/espana-exporta-el-vino-106-euros-por.html y http://spainwinesnews-noticiasdevinoespanol.blogspot.com.es/2017/03/espana-es-el-tercer-productor-mundial.html-

Wines Inform Assessors, Barcelona
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It is clear that obtaining profitable prices in the bulk wine of Spain, but also in bottled wines is one of the key points for the sector - perhaps decreasing overall production, see economic figures at http://spainwinesnews-noticiasdevinoespanol.blogspot.com.es/2017/03/espana-exporta-el-vino-106-euros-por.html y http://spainwinesnews-noticiasdevinoespanol.blogspot.com.es/2017/03/espana-es-el-tercer-productor-mundial.html-

Wines Inform Assessors, Barcelona
......

See Table
Subhash Arora

Origin information: Indian Wine Academy