Early estimates indicate that global wine production in 2023 will be below average for the fifth year in a row; however, it is still expected to exceed demand by around 10 per cent, as wine consumption continues its long-term decline.
Based on country reports and forecasts [1], Wine Australia estimates the 2023 global vintage will be around 25.5 billion litres – just 1 per cent below the 2022 vintage and 4 per cent below the five-year average. If these predictions eventuate, this will be the fifth time in a row that the global vintage has been below average. The current five-year average for 2018 to 2022 is 26.7 billion litres – inflated by the exceptionally large global production of 29.4 billion litres in 2018.
The harvest in the southern hemisphere is complete for 2023, with all the major wine producers having below-average vintages. Australia, Argentina and South Africa have all had their lowest vintages for more than 10 years, while Chile’s vintage was also down (by 15 per cent) but this came after two above-average vintages in 2021 and 2022. Combined, production from these four countries is expected to be down by 23 per cent compared with 2022.
After its record crop in 2022, New Zealand had an unexpectedly large harvest in 2023, just 6 per cent down on the previous year at 501,000 tonnes.
In the northern hemisphere, harvest has not yet started, but current conditions are generally good, with no reason to assume any significant variation from an average vintage. There has been a wet spring in Spain and no major frosts affecting France. The exception may be Italy, which had the wettest May in 10 years, causing some potential winegrape losses, and in July experienced extreme and widespread heatwaves.
In California, the growing season was delayed by an abnormally cool and wet spring, making it difficult to estimate crop size, but there is nothing to suggest it would be particularly large or small at this stage.
In summary, assuming a generally average vintage in the northern hemisphere, combined with the below-average vintage in the southern hemisphere, the total harvest for 2023 is expected to come in just below average and the second-smallest vintage in the past 10 years, with Australia contributing around 4 per cent of total production and moving below Chile to be the sixth-largest producer. For the first time since 2016, Argentina will sit below all the other major southern hemisphere producers in eighth place. The top four producers, all from the northern hemisphere, are expected to retain the same relative rankings as they have for the past 8 years (see Figure 1).
Figure 1: Global wine production by country 2011 – 2023
Source: OIV
Global consumption
Preliminary figures published by the International Organisation of Vine and Wine (OIV) for 2022[2] indicate that global consumption decreased by 1 per cent compared with 2021 to be 23.2 billion litres, continuing a steady decline from 24.6 billion litres in 2017, and more than 10 per cent below the peak of 25.0 billion litres in 2007.
OIV figures for 2023 will not be available until 2024; however, the IWSR has forecast that global wine consumption will fall by 1 per cent in 2023, with all the top wine-consuming countries expected to decline in total consumption except China (up 1.9 per cent) and Russia (up 0.2 per cent). The largest falls are forecast for the UK (down 4.5 per cent), the USA (down 2.7 per cent) and France (down 2 per cent). Australia’s wine consumption is forecast to fall by 1.7 per cent.
Applying these forecasts to the 2022 OIV consumption figures gives a total forecast consumption for 2023 of just under 23 billion litres. This would be 10 per cent (around 2.5 billion litres) less than total production (Figure 2).
Figure 2: World wine production and consumption over time
Source: OIV and IWSR
Supply sticks while demand slides
With the exception of 2017, world wine production has exceeded consumption according to OIV figures for over a decade. Despite this, and even with a 3 per cent overall decline in global vineyard area since 2014 (OIV April 2023), production has remained generally stable at a global level. The average from 2012 to 2023 is 26.6 billion litres, virtually identical to the most recent five-year average (2018 to2022) of 26.7 billion litres.
This means that there has been an average annual excess wine production of just under 3 billion litres since 2012 (Figure 3). This equates to more than double Australi';s average annual wine production of 1.25 billion litres.
Figure 3: Excess global wine production by year
Source: OIV
Earlier this year, the French government, in conjunction with the European Union (EU) Agriculture and Fisheries Council, has committed funds for the first phase of a crisis distillation plan for 320 million litres of unwanted French red and rosé wine from the 2022 vintage. The total cost if the full 320 million litres is funded will be EUR 160 million[3] (A$ 268 million); however, the amount of wine removed from the market will only be equivalent to approximately 6 per cent of the average French production, or 11 per cent of the average excess global production. This is clearly not a sustainable solution to the current and persistent global oversupply of wine.
Ciatti has noted in its Global Market Report (June 2023) that “the real challenge [for the global wine industry] is to reinvigorate the perception of wine as a daily part of a healthy lifestyle once again” (page 12). However, this is not a quick fix, and in the meantime a supply-side adjustment may be needed. As Ciatti also notes: “Wine and grape markets are shrinking overall, potentially leading to lower need for wine and grapes over time”.
Read the Wine Australia preliminary Global Wine Supply Monitor for 2023.