The wine world in review

PREFACE

The information summarized in this report is derived primarily from data collected by the Office International De La Vigne Et Du Vin (OIV) in Paris, France. Information is published in the OIV report titled "The State of Vitivinculture In The World And the Statistical Information For 1995."

The statistics which are published by OIV are incomplete or non-existent for certain countries. OIV is dependent on reports which it receives from governments of the 45-member countries of the association and information obtained from the Food and Agriculture Organization (FAO) of the United Nations.

Statistics provided by OIV for years prior to 1995 have, in some instances, been revised to reflect more accurate information which has become available. Where more reliable information from other sources is available for the United States that information has been used in place of OIV data.

It is important to note that OIV considers a product to be "wine" only if produced from grapes. It is not possible to verify the extent to which wine produced from other fruits is or is not included in OIV reports.

OIV reports also do not indicate the extent to which the wine statistics reported refer to table wines (wines under 15% a.c.); dessert wines (liqueur wines); sparkling wines or flavored wines (aromatizied wines).

In each year world wine imports should be equal to exports. Timing of reports from the countries and the fact that either import or export data is not available from certain countries creates discrepancies between the world import and export totals.

The reports do not provide sufficient information to determine, on a worldwide basis, the extent to which grapes are used for various types of wine, raisins, "fresh consumption," grape juice, grape juice concentrate, canning and distillation.

I. WORLD VINEYARD ACREAGE:

World vineyard acreage in 1995 was 19,195,000 acres which was .4% less than 1994. In the two previous years acreage had declined by 2.0% and 4.7%, respectively. 1995 acreage was 11% less than average acreage in the period 1986-90 and 21% less than average acreage during the period 1981-85.

Compared with 1994 the most significant increases in 1995 average wine production were in Bulgaria (+18.6%), New Zealand (+17.6%), Serbia (+16.0%), Egypt (+12.4%), Iraq (+11.7%), Algeria (+9.4%) and Australia (+8.4%).

Principle decreases in vineyard acreage compared to 1994 occurred in Mexico (-18.5%), Austria (-9.2%), Italy (-3.0%), Portugal (-2.3%) and France, (-.7%).

II. WORLD GRAPE PRODUCTION:

From 1986-90 to 1995 world grape production declined from 66.9 million tons to 59.6 million tons, a decrease of 7.3 million tons per year or 11%. In addition to the production of wine, grapes are utilized for fresh consumption, raisins, grape juice, concentrate, canning, brandy, and grape ethanol. Information is not available on a worldwide basis to correlate the relationship between grape acreage, grape production and the alternative uses for grapes.

The vineyard grubbing-up program in the European Union (EU) countries reduced grape production significantly in 1995 compared to 1994. Grape production in Italy declined by 979,000 tons (-9.4%), Spain by 186,000 tons (-5.2%), Germany by 118,000 tons (-7.2%), Austria by 60,000 tons (-15.8%) and Greece by 22,000 tons (-5.3%). However, grape production in France increased by 291,000 tons (+3.8%) in 1995 even though vineyard acreage was 17,000 acres less than in 1994.

In 1995 there were substantial increases in several former Soviet Union countries including Armenia (+26.7%), Azerbejian (+10%), Georgia (+55%) and Uzbekistan (+63.5%).

Other surprises in 1995 included Australia, where grape production declined in 1995 by 169,000 tons (-8.8%) even though grape acreage had increased by 14,000 acres (+8.8%); Mexico, where grape production declined by 104,000 tons (-17.6%), and Turkey declined by 1,271,000 tons (-33.4%).

III. GRAPE YIELD COMPARISONS:

The following table summarizes grape yield per ton in the 20 largest grape producing countries. India tops the list in yield at 9.09 tons per acre suggesting that grapes grown in India are predominately table and raisin varieties which produce high yield. The U.S. is second, reflecting significant acreage of raisin and table varieties and greater yields in vinifera varieties which result from above average soil conditions, favorable climate conditions and advanced agricultural practices.

Spain has the lowest yield among the countries analyzed with 1.11 tons per acre which probably results from the fact that most of Spain's grapes are grown in the La Mancha area where the climate and soil conditions present a harsh challenge to the vines and regulations prohibit irrigation. Yields in Moldova and Portugal are similar to Spain for many of the same reasons.

GRAPE YIELD COMPARISONS - 1995 TWENTY LARGEST GRAPE PRODUCING
COUNTRIES(1) (IN 1000s)

                                                  YIELD
                     GRAPE        VINEYARD      PER ACRE
COUNTRY           PRODUCTION       ACREAGE       (TONS)

Italy                9,296          2,291         4.06
France               7,946          2,288         3.47
United States        5,936            754         7.87
Spain                3,401          3,052         1.11
Argentina            3,147            519         6.06
Turkey               2,532          1,408         1.80
Iran                 2,094            605         3.46
China                1,920            376         5.11
Chile                1,682            282         5.97
South Africa         1,534            255         6.02
Germany              1,516            257         5.90
Romania              1,448            625         2.32
Greece               1,289            331         3.89
Portugal             1,048            645         1.63
Brazil                 975            148         6.59
Australia              845            180         4.69
India                  827             91         9.09
Egypt                  805            136         5.92
Bulgaria               763            331         2.31
Moldova                741            418         1.77

1 Ranked by grape production in 1995.

In the U.S. per capita wine consumption was 6.4 liters (1.7 gallons) in 1995 compared with 7.9 liters in 1980 (-19.2%); but that was a considerable increase above consumption of 4.95 liters (1.31 gallons) in 1970, an increase of 31.1%.

VII. WORLD WINE SURPLUS:

World wine production in 1995 was 15.9% less than average production during the period 1986-90. Fortunately for the wine sector, consumption declined at a slower rate of 7.8% during the same period. The result is that the "Wine Surplus" has declined from the annual rate of 1.473 billion gallons during the period 1986-90 to 738 million gallons in 1995 a decrease of 49.9%. To put the 1995 wine surplus in perspective, in 1995 the wine demand/supply relationship throughout the world would have remained in balance even if the U.S. (417 million gallons) and Germany (292 million gallons) had not produced any wine that year. The following table estimates world wine surplus, excluding inventory adjustment factors.

[TABULAR DATA OMITTED]

VIII. WORLD WINE EXPORTS:

Wine exports from the major producing countries decreased slightly from 55.5 million hl in 1994 to 53.1 million hl in 1995.

In 1995, Italian exports declined by 5.5%, Spain by 19.2%, Germany by 21%, Portugal by 17.8% and Australia by 44.5%. In most instances, export declines can be attributed to below normal grape harvests.

Argentina became a major supplier of wine to EU countries that had experienced below normal harvests in one or more years. Argentina exports increased from 329,000 hl (88.8 million gallons) in 1994 to 2,148,000 hl (567 million gallons) in 1995, an increase of 552%. Bulgaria (+44%), Moldova (+14%) and Chile (+9%) also experienced export growth to fill the short supply situation in other countries.

IX. WORLD WINE IMPORTS:

Global wine imports declined from 49.7 million hl in 1994 to 47.8 million hl in 1995, a decrease of 3.8%. The level of global wine imports has been relatively stable since 1981-85 when the volume of worldwide imports was 46.2 million hl.

The stability in import trends probably can be attributed to the fact that, in many countries such as the U.S., consumers are purchasing larger percentages of locally produced wines. In other instances such as France, imports have increased because of increased demands for their wines either in the home market, individual export activity, or a combination of both. Russia was a large producer of wine in prior decades but has become more dependent on imports because ill-advised grubbing-up of Russian vineyards in the prior decades.

In 1995 Spain became a major importer for the first time because of extremely short grape crops. Prior to 1995 Spain's imports averaged less than 100,000 hl (2.6 million gallons) but because of inadequate harvests Spain imported 2.4 million hi (892 million gallons) in 1995 to fill the demands of internal and export markets. Fortunately for Spain, adequate supplies were available from South America, primarily Argentina.

U.S. imports reached a low point in 1992 at 1.8 million hl (46.6 million gallons). The direction has changed significantly since to 2.9 million hl (77 million gallons) in 1995, an increase of 65%. This trend continued in 1996 when U.S. imports were 3.7 million hl (96 million gallons) representing a 106% increase above the 1992 level.

X. COUNTRY STANDING IN THE WORLD:

Italy leads the world in grape production (15.6%), wine production (22.84%), share of the world market (22.28%) and share of the world export market (29.8%). France exceeds Italy in wine consumption (16.71%) and follows close behind Italy in all other categories. Spain has the largest vineyard acreage (15.9%) primarily because of the large part of the La Mancha area dedicated to grape production.

XI. UNITED STATES POSITION IN THE WORLD:

The U.S. represented 3.9% of the world's vineyard acreage, 10% of the world's grape production and 6.4% of the world's wine production in 1995. 59% of U.S. grapes are raisin and table grape varieties which have higher yields than wine grapes and U.S. productivity levels are generally higher than other parts of the world. The U.S. world ranking and percentages in 1995 are summarized the following table:

UNITED STATES WORLD RANKING OF ACREAGE, GRAPE AND WINE PRODUCTION

                                              World     % of
Category                            Volume   Ranking   World

Vineyard (acres 000)                   754      5        3.9
Grape Production (US tons 000)       5,936      3       10.0
Wine Production (gal 000)          417,120      5        6.4
Wine Consumption (gal 000)         448,800      4        7.8
Share of World Market (gal 000)    430,135      4        7.5
Share of Export Market (gal 000)    39,045      9        2.8
Share of Imports (gal 000)          78,698      5        6.1

Of the total harvest, about 79% was of white cultivars with a total of .4% tafelwein, 61.9% QbA and 37.7% QmP.

The total area of production in Germany, through last year's harvest, was 102,428 hectares (one ha = 2.47 acres).

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