Jetek China Digital Adelaide 58.com Australia 
In early September, Assoenologi has released its first forecast of Italian grape production for 2018: Italian grape production in 2018 will increase by 20% compared with 2017, restoring to the historical average.Will Italy wine price cut if output increases? 

Italian wines in 2018 are expected to be second highest in output in the last twenty years

 

Italian grape yields are expected to range between 7.6 million and 7.8 million tons for the 2018 harvest season, according to WineITA. Wine and grape juice production will increase by about 1 million litres over last year, with total output expected to reach 5.58 million litres, the second highest in nearly two decades, only after 5.81 million litres in 1999.

 

Even so, Riccardo Cotarella, President of Assoenologi, holds his view that more details will depend on the weather in September and October. If the climate conditions in September and October are ideal, this prediction will become a reality.

 

Jetek China Digital Adelaide 58.com Australia

 

 

Italian wine price is affected by multiple factors, but may not be go down

 

Chinese importers generally believe that even if Italian wine production increases this year, price is not expected to be go ups and downs, especially the signal of price down is so weak.

 

Dai Hang, an Italian wine importer, confirmed to Jetek China Digital’s that the latest news he received from Italy was unlikely to cut prices, not to tell that the price would drop back to pre-2017 market prices.

 

Dai don’t think that China market performance is optimistic in May, June, July, if Chinese consumers still continue to decline in wine consumption in the second half of 2018, resulting in a serious imbalance between supply and demand, and it will be possible to push prices down.

 

Wu Hao, an importer based in Beijing, considered that the price performance of the increase is expected to be minimal. Judging by several large increases in production over the past decade, Europe has never experienced a significant price drop.

 

Wu analyzed three reasons why prices will not fluctuate.

 

1

 

First, Italian labor and raw materials costs have been relatively high, in recent years by the impact of inflation, Italian wine imports have maintained a long-term annual price increase of 2% – 5%.

 

2

Secondly, some of the Italian wineries have reduced their production by 40% in the past year, but the producers have not raised their prices substantially. The producers are considering the long-term benefits, so producers will not raise the price to a level that can immediately make up for the reduction in production, they will recover the loss in bad years in the following seasons.

 

 

3

 

Third, some Italian brands and regions have been very popular, there is a shortage of supply itself, in the face of increased production, brands owners can provide more quotas for new customers, and not take the initiative to cut prices.

 

 

Apart from Italian labor costs, raw material prices and  market considerations of producers, there is little room for Chinese importers to reduce prices.

 

Italian wine importer Li Chao, believes that output is an important factor in price fluctuations, but Chinese importers are generally affected by the Euro exchange rate and sea freight. It is estimated that prices imported into the Chinese market will not fluctuate much compared with last year.

 

Will the growth of output force Italian producers to attach importance to big items and brands?

 

 

Italian wine imports accounted for nearly 7% of China’s imported wine market in the first quarter of 2018, surpassing Spain and ranking fourth in China’s imported wine market.

 

Dai Pengxuan, an Italian wine importer based in Hangzhou, thinks that Italy is indeed short of a big item in China market. In recent years, Italian wineries have gradually realized this problem. Taking the Italian best-selling brand Caviro as an example, they are also actively carrying out brand layout in China.

 

In the short term, the increase in production will not push Italian wine to create large brands and big item products, the real driving force for the emergence of large brands is still decided by the strength and willingness of the brand operators.

 

Italian producers don’t have strong will power to build brands in China, which leave high risk to Chinese importers. Generally speaking, it is difficult to find big Italian brands (similar like Penfolds or DBR Lafite) in the short term. The increase of output is not enough to promote the emergence of Italian big brands and big item.

 

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