Wine Comes and Goes (to China, e.g.)

Indeed, even as overall crop yields dip thanks to continuing reductions in traditional Old World plantings–in France, Spain and Italy particularly–the wine market grows internationally. That missing European output is a reflection of both steadily diminishing domestic consumption in those countries, as well as an uprooting of marginal vines that weren’t worthy of bottling to begin with.  (Here you can see the overall picture in statistics through the 2009 harvest from the International Organisation of Vine and Wine.) Meantime, even those longtime powerhouses are doing more export, to which you can add the various New World sources that are mostly still picking more fruit every year.

Who’s buying all that added export? Discerning drinkers around the globe, who either are looking for better taste or better value than they were used to. And, in several countries, more people being introduced to fine wine.  The big example of all these trends is China, whose import thirst lights up the charts. Overall consumption rose by 25% 2002-2009. Meantime, China’s domestic production is flat (and, with some exceptions, undistinguished) owing to various limitations including water.

If you’re making wine for profit, you’d better know where you’re going to sell it. So far, the Chinese have opted for French at the high end and Australian and Chilean at more popular prices, with Argentina coming around the bend. The U.S. export there has doubled lately, although from a small base.  For all those lovely California producers, it’s going to take more than a reasonable US$-Rmb exchange rate to change the fundamental picture.