A look at the Italian wine sector

Australian wine businesses operate in a global market, so it is important to understand how our competitors are performing – this week we take a look at Italy.

Italy produces the most wine of any country in the world. The OIV estimates that, while Italian wine production fell by 1.2 per cent in 2016 to 4.9 billion litres, this still placed Italy ahead of France (4.2 billion litres) and Spain (3.8 billion litres). In comparison, Australian wine production is one quarter of Italy’s (1.2 billion litres).

Between 2001 and 2015, Italian wine production averaged 4.7 billion litres, reaching a peak of 5.4 billion litres in 2006.

Exports account for approximately 40 per cent of Italian wine production (for Australia, the share of exports is 60 per cent). Italy is the world’s second largest exporter by volume behind Spain.

In the 12 months ended October 2016, the volume of Italian exports increased by 1.6 per cent to 2 billion litres while value increased by 1.9 per cent to US$6.1 billion (or A$8.2 billion) compared with the previous 12-month period.

The top five markets for Italian exports by volume were:

• Germany (541 million litres, down 2.6 per cent)
• United States (319 million litres, up 3.6 per cent)
• United Kingdom (305 million litres, down 1.4 per cent)
• France (92 million litres, up 7 per cent)
• Canada (72 million litres, up 2.7 per cent)

These five markets account for two-thirds of Italian exports.

Italy is the number one imported wine category in Germany, the United States (US) and United Kingdom (UK) and second in France and Canada.

China is not yet a major destination for Italian wine, ranked 15^th with 29 million litres. In comparison, Australia exported 99 million litres to China in 2016.

Australia achieved a higher average value overall for bottled exports than Italy in the 12 months ended October 2016: US$3.96 per litre versus US$3.80 per litre.

There are differences between key markets. The most telling is the US, where bottled Italian exports averaged US$4.72 per litre compared to US$2.94 per litre for Australian exports. On the other hand, in the UK Australia averaged US$3.04 per litre compared to US$2.29 per litre for Italy.

Average value of bottled wine exports from Italy and Australia (US$ per litre)

Source: Global Trade Atlas

A more detailed report on the Italian wine sector is available here.