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Consumption worldwide declines, China rises

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Like you, maybe, I’m continually befuddled by statistics, which can be argued any which way. Take wine. Has the current worldwide recession been good or bad for it? I’ve heard reports that people are drinking more — which is good — but spending less — which is good if you’re a lower-tiered winery, but bad for mid- and high-priced ones.

Well, this is the kind of report that seems to cut through the bull and state something memorable. The headline, “World wine consumption falls for 1st time in years,” is shocking. Anytime anything “falls for the first time in years” it’s memorable and bears analysis.

So let’s analyze this one. The statement is from The International Organization of Vine and Wine, the famous OIV that keeps its fingers on the pulse of all things vinous around the globe. Its director, Federico Castellucci, said at a news conference, “It is obvious that the world economic crisis has played a role in lowering overall demand.”

However, the devil is in the details, as usual. Most of the decline is happening in the world’s biggest wine-drinking culture, Europe, where Germans, French and Italians are drinking less. They accounted for such a huge percentage of the world’s consumption total — around 50% — that even a minor drop can have a negative impact on worldwide numbers.

Why is Europe drinking less? I’m not sure. Health has been reported to have something to do with it, but we Americans are addicted to healthy lifestyles (well, except for all those porkers in red states and counties), and we’re drinking more, so health can’t entirely explain it. It can’t even be the recession, which is digging into European pockets as deeply as into ours. So if anybody can tell me why Europeans are drinking less, I’d appreciate it.

Meanwhile, the sinking numbers in Europe are balanced out by rising consumption here in the U.S. and in Canada and Australia. And people are also drinking more in Asia and below the Equator in South America. Chinese wine consumption is rising so quickly — it’s already in the top ten — that wine producers around the world “are pinning their hopes for growth during the financial crisis” on it, according to Xavier de Eizaguirre, president of Vinexpo, who was quoted by AFP, a new, online worldwide news service.

Once upon a time, the world looked to America to rescue it from whatever ailed it. With Obama in the White House, it’s still a temptation, but with the transfer of wealth to China, I think the best Obama can do is slow the slide and transition Americans to getting used to being poorer but, perhaps, happier. (The audacity of hope.) The World Bank is reporting that China is likely to emerge from its slump this year, and maybe lead the world back toward economic health. A billion and a half people, all drinking wine or with the potential to do so, could rescue world wine producers from these scary times, but they’re going to have to hire Chinese-speaking people who understand Chinese culture; and while there may be a few California wineries that have done that, there are thousands and thousands that haven’t.

  1. It’s a demographic issue. French and Italian Millennials are drinking more spirits / less wine than their seniors do. As the people who used to consume the contents of the wine lake die off, they aren’t being replaced by drinkers with similar habits.

  2. Steve, I know you to be a committed journalist and oenophile. I also admire your verve and persistence. But, have you noticed the drop off in comments each time you veer off the vinous highway into oncoming socio-political traffic? Hope it’s not a trend but, hey, it’s your football.

  3. Steve-

    The devil is in the details. I’m surprised that you fail to quote this paragraph from the report:

    “World wine consumption last year fell to 243 million hectoliters (6.4 billion gallons), down from 245 million hectoliters in 2007. Consumption fell in all of Europe’s major wine-producing and consuming countries, including France, Italy and Germany, Europe’s biggest wine-drinking nations.”

    243m HL v. 245m HL is statistically insignificant. We in the wine business would do well to remember this: the sky is not falling. Yet, anyway…

    Regards,

    JB

  4. Ray hit it on the head. As I sit here all I can remember from the post was the “poorer but, perhaps, happier” comment. I won’t get into why that statement is so bothersome to me, but I really enjoy the content when it focuses on wine without the diversions.

    Just my prespective maybe others enjoy it.

  5. Chuck states it nicely. It’s a shift of influence from one generation to another. Drinking habits have changed and as the groups grow older and gain more disposable income they will purchase more only in their line of habit.

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