The world makes, and drinks, less wine. Winemakers are struggling

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Jordi Ustrell expects his vineyard dry crops to produce about half of their usual 15,000 bottles of wine this year.

“That’s a big loss,” the interim chief executive of Celler Devinssi, a small winery in the Spanish town of Gratallops, told CNN.

Ustrell is one of many European winemakers struggling to grow enough grapes as harsh and inclement weather becomes more common. High input costs and reduced consumption add to the difficulties of small, independent wineries.

According to the International Organization for Vine and Wine (OIV), an industry group, global wine production is set to fall to its lowest level since 1961 this year, hit by rising temperatures and rare floods. The increase in that decline is expected to drop to 12% and 14% of the output of Italy and Spain, the largest and third largest producers in the world by 2022, respectively.

Climate change will have a “huge” impact on wine production, Giogio Delgrosso, head of statistics at the OIV, told CNN.

Delgrosso said that, in the past, severe weather would strike every few years to disrupt long stretches of healthy, abundant crops. “Now extreme climate events are happening all the time. Every year there is something.”

This year, heavy rains have helped mold spread in vineyards in central and southern Italy, while severe drought and high temperatures have damaged vineyards in Spain.

Other major wine producers, including Australia, South Africa and Chile, are expected to suffer drops of between 10% and 24% in output this year, according to OIV data, as floods , forest fires, droughts, and fungal diseases ravaged the vineyards.

A changing climate has helped others, however. Output in the United States, the fourth largest producer in the world, is estimated to grow 12% this year. Greg Jones, a climatologist and chief executive of Abacela, an Oregon-based winery, told CNN that, half a century ago, the state could not grow grapes. Now, he said, rising temperatures have made Oregon “one of the best producing regions in the country.”

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Ustrell in Spain lived in unpredictable times.

For about two years now, there has been almost no rain in Gratallops, located about 90 miles west of Barcelona. That put a lot of stress on Ustrell’s vines. And the snow, which penetrates into the deepest layers of the earth, giving moisture to the vines during the dry summer months, did not fall once during that time.

It’s no surprise, then, that Ustrell’s crop of Cabernet Sauvignon — a red wine grape variety traditionally grown in France’s Bordeaux region, where conditions are particularly humid — is the first , as he put it, “collapsed” this year.

Gratallops’ vineyards are so dry, he added, that 26 of its 28 wineries, including Celler Devinssi, have recently formed an association to lobby local authorities for funding to improve supply. of water for irrigation, even if that means transporting large buckets of water to the town by truck.

Celler Devinssi is not in danger of closing, but the 23-year-old company’s bank account will almost certainly be “in the red” this year, according to Ustrell.

Across the border, French winemakers are grappling with the opposite problem: Too much wine.

France is on track to pip Italy to become the world’s largest producer this year, according to OIV data, from second place in 2022. The country remains at the same level of production as last year thanks to a more favorable time.

But the growing supply of wine has outpaced declining demand in France and abroad, pushing up prices.

The mismatch prompted French and European Union authorities to announce a joint €200 million ($217 million) purchase scheme this summer, allowing French winemakers to sell their excess stocks of distilleries for recycling other alcohol products such as hand sanitizer.

Falling prices coincide with rising input costs.

In the past two years, a combination of rising inflation and historically high energy prices have driven up the cost of inputs such as fertilizer, bottles and transportation fuel. Add in higher interest rates, which make borrowing to invest more expensive, and many winemakers’ already narrow profit margins have all but disappeared.

Charly Triballeau/AFP/Getty Images

People buy wine in the French city of Toulouse in September. Many French winemakers have suffered because retail prices have fallen this year.

French winemakers struggling to sell their own products took their anger out on imports from Spain. Hundreds of them descended on a major cross-border highway last month and attacked trucks carrying Spanish wine to France. Protesters smashed crates and emptied gallons of imported wine on the street.

Frédéric Rouanet, who organized the demonstration, explained to CNN that Spain produces a lot of cheaper wines and said the message to merchants is clear: “If you want to get cheap wine from Spain, you have to to buy our wine from us first. .”

Otherwise, says Rouanet, who runs an association of winemakers in France’s Aude, the region The wineries are simply “not passable.”

Meanwhile, people around the world are drinking less wine than in previous years, choosing beer or spirits instead, or giving up alcohol.

Globally, wine consumption will fall by around 6% between 2017 and 2022, OIV data shows, as consumers change their drinking habits and inflation erodes their disposable income. That means almost 1.9 billion fewer bottles of wine were drunk last year than in 2017.

Estimates for this year, cited by the European Commission in June, show even sharper declines in European countries, suggesting that the trend may be accelerating.

The many pressures have forced some vineyards to close their doors.

Michael Baynes, co-founder of Vineyards-Bordeaux Christie’s International Real Estate, an investment advisory specializing in vineyards, said that the number of winemakers selling, while still a small part of all Bordeaux producers, ” big increase” this year.

“It’s a bloodbath,” he told CNN. “We have seen some sad stories so far. Many multigenerational families have lost the land they have nurtured for years.”

Their problems began 20 years ago, Baynes said, when low-priced Bordeaux wines were forced to compete with “New World” wines – such as those from Chile, Argentina and Australia – rising in popularity.

Arnaud Finistre/AFP/Getty Images

A worker harvests grapes in a vineyard in Burgundy, France, in September. The supply of French wine has outstripped the decline in demand in France and abroad this year.

The surviving family-run wineries, and larger wineries sold to the lower end of the market, are in a precarious position, Baynes said. A bad harvest, a new export tariff, another interest rate hike may be all it takes for a generation-old winery to close for good.

And lenders who were “nervous and nervous” did not come to the rescue of wineries that they suspected would struggle to pay dearly. loan, he added. “They turned off the tap on lending.”

“Families, generations, blood, sweat and hard work that went into creating a beautiful product can be lost forever.”

Climate change is the reason John Mitra sold the Bordeaux vineyard he owns with his wife, Penelope, last year because it is so difficult to predict the harvest from year to year.

“It’s very dangerous,” he told CNN. “Some years you can get 3,000 bottles in one hectare. In other years, you go up to 50. Unless you have a lot of financial help, you can’t operate.”

The couple has since moved 340 miles east to found The Burgundy Wine Company, a merchant specializing in wines produced in small, independent vineyards.

They chose the Burgundy region because it is so small, and so the wine produced there – less available, more desirable – fetches a higher price than wine from many other areas.

John Mitra

John and Penelope Mitra at their former vineyard, Chateau du Faure Haut Normand, in Bordeaux, France, in 2020

More and more of Mitra’s suppliers and friends in the industry are deciding to sell their vineyards, or take advantage of a French government subsidy to uproot their vineyards and replant the land with new crops, or just move it to the woods.

Some have replaced their trees with olive trees and kiwi plants, he said, because they are more drought-resistant.

Mitra already misses his previous job. For 12 months, through “rain or frost,” he and his wife tend to their vines. The two or three days spent harvesting the grapes each year makes it all worthwhile, he said.

However, Mitra is happy to have chartered a new path in an industry he loves, and feels lucky to still be living among the lush vineyards of France.

“Now I just walk my dog ​​on the vines, instead of owning it.”

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