Exports in 2020 were weak

The world has been rocked by the pandemic in 2020. But how has it affected the international wine trade? Superficially, one might say, “not much at all”. But looking at the details, there is no doubt that it has seriously affected it, perhaps even halting the ongoing globalization of wine. This is the latest in our series of articles analyzing global wine data published by the International Organization of Vine and Vine (OIV).

World wine trade contracted slightly in volume in 2020 to 105.8 Mhl, or -1.7%. However, measured in value, the decline was greater, with total wine exports reaching €29.6 billion, or -6.7%. In other words, world trade remained almost stable but average prices fell.

As the OIV notes in its publication, several obvious factors contribute to this poor performance: the covid-19 crisis which had a particularly negative effect on certain large exporters (trade ban in South Africa for example), the trade war between the EU and the US that led to US tariffs on wine, Chinese tariffs on Australian wine and the dampening effect on trade of the Brexit mistake.

Read our previous articles on the Wine Global 2020 series here:

Export volumes: down

The largest wine exporting countries, measured by volume, in millions of hectolitres, are:

  1. Italy: 20.8 Mhl
  2. Spain: 20.2 Mhl
  3. France: 13.6 Mhl
  4. Chile: 8.5 Mhl
  5. Australia: 7.5 Mhl
  6. Argentina: 4.0 Mhl
  7. United States: 3.6 Mhl
  8. South Africa: 3.6 Mhl
  9. Germany: 3.4 Mhl
  10. Portugal: 3.1 Mhl
  11. New Zealand: 2.9 Mhl

Countries whose exported volumes are equal to or greater than 2 Mhl in 2020.

In 2019, Italy and Spain were tied, sharing the top position as the biggest exporters. In 2020, both countries decreased their exports, but Spain more than Italy.

The three largest wine exportersthe same as the three largest producers but in a different order, represent slightly more than 50% of world exports. In relation to wine production, it should be noted that one of the top ten producers is not a big enough exporter to make this list: China. Instead, we have New Zealand appearing in the number 10 spot.

The four largest exporters, Italy, Spain, France and Chile, all saw their exports fall in volume.

Only one country experienced a significant increase in exports: Argentina with +27% to reach 4 Mhl.

Two other countries also made good gains, Portugal and New Zealandwith respectively +5.3% and +6%, but this could not compensate for the declines of the large countries.

Export values: further down

The value of exports fell much more, -6.7% to reach only 29.6 billion euros. The OIV assumes that this is partly due to the closure of restaurants and bars in some countries. But is it really so that we drink more exclusive wines in on-site venues (restaurants, bars, etc.) than we do at home? And is the horeca channel so big? May be.

Another possible explanation is that the crisis may have meant (still means?) that we were more careful with spending and chose to opt for cheaper wines. What do you think?

Largest exporters counted by value, in millions of euros:

  1. France: 8,736 million euros
  2. Italy: eur 6,233 million
  3. Spain: eur 2,626 million
  4. Australia: eur 1,787 million
  5. Chile: eur 1,595 million
  6. United States: 1,147 million euros
  7. New Zealand: eur 1,145 million
  8. Germany: 882 million euros
  9. Portugal: 846 million euros
  10. Argentina: 655 M eur
  11. South Africa: 535 M eur

Countries whose exported volumes are equal to or greater than 2 Mhl in 2020.

Unsurprisingly, France ranks first when it comes to the value of wine exports.

All but two countries recorded a decline in the total value of exports. The two exceptions that grew are Portugal and New Zealandwhich are the two smallest exporters in the list counted by volume.

the the largest exporter, by value, is France. The value of French exports is more than 40% (!) higher than that of number two on the list, Italy, although Italy exports larger volumes. Italy’s export volume is 53% higher than that of France. This is of course due to the fact that France exports a lot of high-end wines, especially large volumes of high-priced champagne. However, champagne exports have seen a significant decline, more than other categories, in 2020, which is also reflected in these figures. In 2019, the value of French exports exceeded Italy by more than 50%. In 2020, “only” 40% ahead of Italy. France is also the country which experienced the second largest drop in export value, -10.8%. Indeed, French exports abandoned with more than one billion euros.

The biggest loser in terms of export value, however, is Germany which fell by -15.5% value. I don’t see any obvious explanation for this. Do you?

The three major wine exporters: Italy, France, Spain: more than half of the total

France alone accounts for nearly 30% of all world wine exports by value. Together with Italy the two countries capture 50% the value of world exports.

The three largest exporters — Italy, France, Spain — account for 52% of world exports by volume and 59% by value. But all three have seen their volume and value drop.

Is the internationalization of the wine trade taking a break?

In twenty years, the wine market has become much more international. International wine trade (exports) almost doubled. In 2000, 60 M hl of wine were exported. Today, nearly 110 M hl are consumed in another country.

Total exports were 105.8 Mhl in 2020 and total production was 260 Mhl so we could say that 41% of the world’s wine is drunk in a country other than the one where it was made (is exported).

But a perhaps fairer comparison is to compare total exports to consumption, since part of the wine production is used for other purposes. This is exactly what the OIV does in its “wine market internationalization index”: the ratio between world wine export volumes and world wine consumption. This gives an even more impressive figure, 45% of all wines consumed come from a foreign country. Nearly half of all wine drunk was exported.

This is just a slight increase compared to 2019. Is the internationalization of wine taking a break?

However, looking over a longer period, the international wine trade has undergone a very impressive development. The internationalization index has increased from 27% in 2000 to 45% in 2020.

—Per Karlsson