In early December, the European Commission approved a support plan for the wine industry, which is facing unfavorable economic conditions and growing structural difficulties. Although substantial, this plan only addresses part of the problem for the time being, overlooking the decline in European consumption and export difficulties.
Key figures
- 35%: drop in wine consumption in Europe since 2000.
- 60%: share of global wine production represented by France, Spain and Italy
- 214 million hectoliters: historically low level of global consumption expected in 2025.
The European support plan: only a partial response
The support plan is based mainly on subsidies for the permanent uprooting of vines. In France, €130 million will be mobilized to finance uprooting at a rate of €4,000 per hectare. This measure, which also applies to Italy and Spain, aims to cap supply in the face of declining demand. However, it only addresses part of the structural imbalance in the sector.
A worsening imbalance between supply and demand
Global wine production and consumption have both fallen by nearly 10% in ten years. But the decline is much more pronounced in Europe, where consumption has fallen by 25% since 2000. France has lost its status as the world's leading producer to Italy, and demand continues to plummet. By 2025, global consumption is expected to reach a historic low of 214 million hectoliters.
Growing difficulties in exports
European wines are facing headwinds in international markets. In China, wine consumption has fallen by more than 60% since the pandemic, while in the United States, new customs barriers are complicating market access for European exporters. These export difficulties are further weakening an industry that is already under pressure.
The focus on uprooting masks structural problems
The French uprooting plan, which provides for the withdrawal of 1.5 million hectoliters from the market (only 10% of the estimated supply surplus in 2025), cannot be sufficient to address the current supply/demand imbalance and relies solely on production to improve conditions in the sector, ignoring the challenge of declining demand and changing consumption habits.
Focusing on uprooting obscures the need to move upmarket and the wide disparity between producers. Entry-level wines, particularly in south-eastern France, are facing increased competition from non-European countries and declining demand, making this solution unsuitable for ensuring the long-term sustainability of the sector.
Simon Lacoume, sector economist, says:
The European wine industry is going through an unprecedented crisis, marked by a persistent imbalance between supply and demand, export difficulties and competition on entry-level wines. The current measures, although essential, are not enough to sustainably reinvent the sector.
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