Italian Wine Union: Export Reaction, Peak in Russia

A favorable but unconvincing report on Italian wine exports in the first quarter. The April rally, as noted by the UIV-Vinitaly Observatory based on data from the Italian statistical office ISTAT, takes Italian wine exports into mainly positive territory for the first four months, culminating in a trend of +5.8% in volume and +7% in value (over 2.5 billion euros). However, the data published by ISTAT is insufficient to fully satisfy the players in the sector.

According to the Observatory, the very strong growth in orders from the Russian Federation and Japan, which account for 60% of the total increase in exports, is doomed to decline in the second half of the year. On the one hand, the Russian result is actually strongly influenced by demand, which over a four-month period recorded a real rush on stocks of ordinary and sparkling wine (volumes +120.5%) due to the increase in excise duties, which will come into effect on May 1, with rates rising to 243%. However, Japan (+36% volume) has seen strong and unusual growth in wine and agri-food orders from across Europe, likely also linked to the entry into force of the announced road freight transportation reform law announced in April, resulting in a reduction in maximum working hours for truck drivers and couriers, which are among the highest in the world. This factor has caused “supply stress” at all levels of logistics since the beginning of the year, as it did in 2021-22 globally after the container crisis.

On top of this, the strong inconsistency in Germany should be understood: in the same period, the export figure rose to +0.4%, while at German customs the import figure fell to -12% with a gap of 25 million liters. A factor that lacks in our main competitor in wholesale supply, Spain, which has seen a concerted export-import growth of around 20%. April, which can be compared to the previous one, the worst in the last 5 years, is nevertheless positive and accompanied by a strong reaction in various strategic points.

Compared to the quarterly balance sheet, according to ISTAT, the US and Germany gain 3 percentage points and move into positive territory (volumes +2.6% and +0.4% respectively), the UK authored a new gain (+12%), Switzerland recovers from -6% to -1%, and Canada also thrives (+5%). Again, compared to the same quarter, China lost 8 points, with order volumes at +3%.