Credit to photo: Created by Imagine.art
Text by: SW Team
Wine production in the world is the lowest since 1961; LVMH’s wine sales plunge; California wildfires kill the wine industry; Canada’s tariffs on Californian wine; High tariffs on European wine looming
The world needs more wine
Global wine production has reached its lowest point since 1961, according to recent reports. The significant decline is attributed to adverse weather conditions in key wine-producing regions, such as France and Italy, which have faced challenges like frost and excessive rain. These environmental issues have severely impacted grape yields, leading to a decrease in overall production levels. Despite these setbacks, consumption of wine remains steady worldwide, balancing the reduced availability. The situation highlights the influence of climate change on agriculture and the necessity for growers to adapt to new conditions. Wine producers are exploring innovative methods to mitigate the effects of climate variability and sustain future output.
LVMH’s wine income shrinks
LVMH's wine and spirits division has reported a significant profit decline of 35.7%. This drop is largely attributed to challenges like supply chain disruptions and changes in consumer behavior. The impact is seen across various brands, prompting the company to explore strategies for recovery and adaptation in a shifting market landscape. The U.S. continues to be LVMH's largest market for wines and spirits, making up 34% of sales, with Europe and Asia following at 27% and 18%, respectively. In Asia, Japan contributed 6% to sales. LVMH pointed to reduced consumer spending in China as a significant factor in the decline, highlighting that cognac sales suffered due to "weak local demand in China and a challenging market environment in the U.S."
Los Angeles wildfires are killing the wine industry
The Los Angeles wildfires have significantly impacted the local wine scene, causing extensive damage to vineyards and affecting grape yields. As producers work on recovery, they are exploring strategies to enhance resilience and adapt to potential future climate challenges. This situation highlights the urgent need for innovative measures to protect vineyards from similar events and ensure the sustainability of the wine industry. After the initial chaos of the fires, the extent of the damage became clearer. Images showed the Rosenthal Winery tasting room on Pacific Coast Highway completely destroyed. However, unlike the 2018 Woolsey Fire that devastated Malibu, the Santa Monica Mountains, and numerous vineyards, it seems that no commercial vineyards were harmed this time.
Map by: fire.ca.gov
Canada imposes 25% tariffs on American wine
The California wine industry faced a new setback this weekend as Canada, the biggest export market for U.S. wine, imposed 25% tariffs on American goods, including alcohol. Additionally, the two largest provinces in Canada announced they would begin removing American alcohol from store shelves starting Tuesday. These measures were in response to President Donald Trump's decision to impose 25% tariffs on Canadian imports. Similar tariffs were also placed on goods from Mexico and China, stirring concerns of a trade war. However, the tariffs on Canada and Mexico were temporarily paused for a month on Monday afternoon before they could take effect.
U.S wine lovers stocking up European wines before Trump’s tariffs
IEU wine exports to the U.S. saw a remarkable increase in November 2024, coinciding with Trump's election victory. Compared to November 2023, imports rose by 18% in volume and 19% in value, marking record highs for any November. Italy, among the EU's leading wine exporters, experienced a notable uptick. Shipments of sparkling wines to the U.S. surged by 41%, and still wines increased by 17% during that month. According to the Italian Wine Union (UIV), this marks the first wave of data post-election, indicating a rush to purchase wines ahead of impending tariffs. UIV president Lamberto Frescobaldi highlighted, "The good news is that the numbers confirm Americans are unwilling to forgo our wines, especially sparkling ones." However, he cautioned, "The bad news is that the threat of tariffs is becoming increasingly imminent." The U.S. accounts for 24% of Italy's wine export market by value.
