EU-27 Annual Wine Report 2009; Consumption to Fall Due to Economic Downturn(3)

France is now the second largest wine producer in the world. Production in the current
marketing year is estimated at 43.6 MHL, or 6 percent less than in the previous year.
Appellations of origin (AOC) wines are reported at 21.6 MHL, about 7 percent below the
2007/2008 level, while table and country wines should reach 15.5 MHL, and cognac
production 6.5 MHL. Poor weather conditions, along with a decrease in the planted area, are
the main reasons for the decrease in production. The current year production level is some
24 percent lower than the one reported in 2004/05. In most of the wine growing regions, an
unusually mild winter did not allow the vines to have their usual resting period. This was
followed by a late spring frost which was particularly harmful in the Loire Valley and
Bordeaux. Moreover, excessive humidity throughout the spring and summer fostered the
proliferation of mildew and other pests. Champagne, Burgundy and Alsace, or the later
ripening regions, were affected less by the bad weather than Languedoc-Roussillon.
According to most recent survey, in France there are approximately 113,000 wine growers,
cultivating 824,000 hectares of vineyards for wine production. About 58 percent of French
vineyards are devoted to VQPRD wines. In 2007, there were 1907 organic wine growers,
producing on about 22,500 hectares, approximately a 16 percent increase over 2006.
Organic production represents 2.6 percent of the total planted area for wine.
Spain has the largest area of vineyards in the world, about 1.2 million hectares. However, in
terms of production, it is third following France and Italy, primarily due to low yields per
hectare, because some vineyards are cultivated on marginal lands with reduced water
supply. Production in 2008/09 is estimated at 36 MHL, or marginally (-2 percent) lower than
in the previous year, as a result of several different trends reported in the main producing
regions. Production of controlled appellation wines in Spain has remained fairly stable during
the most recent years, as has production of red and rosé wines. On the other hand,
production of white wines is declining.
In Portugal wine production in 2008/09 is now estimated at 6 MHL, or virtually unchanged
compared to the poor crop reached in 2007/08. Weather has remained adverse especially in
the southern regions, in particular during the vine flowering period. The 2008/09 German
wine production, estimated at 10.2MHL compared to 10.3 million hl in 2007/08, is reported
to be good to excellent. The German wine production area amounts to 102,000 hectares. In
2008, 63 percent of the grapes produced in Germany were white wine varieties; compared to
82 percent 15 years ago. However, during the past three years the conversion to red grape
varieties has stagnated and area planted to Riesling and Pinot varieties is increasing again.
Wine production in Austria is estimated at 2.8 MHL and, with a total area of about 51,000
hectares. About 70 percent are white wines. Despite the relatively large 2008/09 crop, in
general the average quality was negatively affected by hailstorms and an extensive mold
infection. In Hungary, the 2008/09 wine production is estimated at 3.5 MHL, or 10 percent
larger than in the previous year. A slight decrease in wine both area and production is
expected for the next couple of years. About 70 percent of wine produced in Hungary is
white, 28 percent red, and less than 2 percent is rosé. Finally, a relatively strong increase in
production (+20 percent) is reported in Romania, where the crop is estimated at 6.3 MHL.
This increase is primarily due to favorable weather, which has also resulted in good quality.
GAIN Report - E49021 Page 5 of 15
UNCLASSIFIED USDA Foreign Agricultural Service
CONSUMPTION
Consumption of wine in the EU is currently influenced by two factors - the anti-alcohol
campaigns conducted in some leading countries, primarily France and Italy, and the general
economic crisis. With regard to the former, the first current anti-alcohol abuse policies have
made advertising of wine difficult or nearly impossible. The local wine industry, especially in
France, considers this policy as a move toward a neo-prohibitionist attitude. However, health
concerns and concerns over drinking and driving have elevated worries among the Europeans
in general, and especially among the local authorities. Moreover, the economic recession
which started in the second half of 2008 is increasingly affecting wine consumption.
Furthermore, expectations for the immediate future indicate an even greater reduction of
domestic consumption. In recent months many families have decreased their use of
products and beverages not considered basic necessities. In addition, since there is a large
variance in wine pricing, we can expect an adjustment of consumer preferences towards
cheaper wines. The following summarizes consumption trends in the leading European
countries.