France and Australia in oversupply woes

Both Australia and France are producing more wines than their sales with a significant correction coming. With global wine consumption down 3% in volume in 2022, (according to IWSR) both have their own difficulties.

Much of central Europe is consuming less wine with The Drinks Business quoting the European Commission's claim that consumption in France is down a massive 15%, while Germany is down 22%, Spain 10% and Italy 7%. The over supply, caused by a huge drop in demand from its home markets, means France has assigned €200m from a mixture of the EU and France to distil wines into ethanol for industrial use. Much of the wines are from France's two big volume regions of Bordeaux and Languedoc.

Australian sales value was down 10% by value while volumes were down just 1% in the year to July 2023. This is a historically low number after the loss of AUS$1 billion of sales to China in 2021. Peter Bailey, market insights manager at Wine Australia, claimed that the latest drop is caused by a reduction of sales to the US market, selling primarily wine positioned just above bulk shipped wines.