The Uiv-Unione Italiana Vini, through the mouth of president Lamberto Frescobaldi: 80% of Italian wine risks a real leap in the dark. Only 2% are in the luxury bracket. Quality/price the added value of tricolor wine.
The damage for Italian wine with the 25% tariffs hypothesis could be around 470 million euros just for the direct effects on U.S. demand, not counting the indirect ones on global exports that move the bill to almost 1 billion euros. Unione italiana vini (Uiv) reiterates the concerns in an analysis of its Observatory on the impacts of the new tariffs announced by the Trump administration for European agriculture, and considers dangerous the assumption that our wines – as “Italian and luxury” – do not run risks of downsizing by star and stripes demand.
Most Italian wine is in the “popular” bracket
According to Uiv, at least 80 percent of Italian wine is in fact at risk of a real leap in the dark: this is what makes up the backbone of Italian exports to the United States and cubes as much as 2.9 million hectoliters (out of a total of 3.6 million). Nearly 350 million bottles of tricolor wine concentrated in the “popular” bands, equivalent to an ex-cellar price of 4.18 euros/liter and which at retail turn into an average – after transportation, duties, mark-ups at distribution – in a price range that does not exceed $13 a bottle.
On another dimension travel the “luxury” wines, which, however, concern a 2 percent share of total exports by volume (8 percent of value) and may all in all be less subject to purchase reductions.
Winning value for money
“Italian wine in the U.S., which is worth about 2 billion euros with a 24 percent share of our total world shipments, is composed of strongly identifiable products that, together with a winning quality-price ratio, have contributed to the success of made-in-Italy wine. – C ow the UIV president, Lamberto Frescobaldi. – The backbone, net of flag wines, is this and primarily represents a mid-range positioning, with possible price fluctuations dictated by duties exposing supply to possible demand migrations. According to Uiv – added Frescobaldi , “it is very important to be able to act with a ‘contingency plan’ based on 3 levels: the first, negotiating, aimed at not including wine in each other’s lists of products subject to trade barriers; the second, Community, which would set up compensatory and promotional measures; and the third is national and will inevitably have to address the issue of production containment.
The risk of decanting into the “premium” bracket
According to the Uiv Observatory, official data say that the average export price to the U.S. is 5.35 euros per liter for Italian wine, only 30 percent of “popular” wines are all in line (5.26 euros), while more than half are well below the threshold (3.53 euros). Additional tariffs of 25 percent, not handled in fairness between counterparts, would end up jolting these wines to the next higher bracket, the “premium.” Basically, the bulk of tricolor productions: from Pinot grigio to Prosecco, from Chianti to Lambrusco, from Moscato d’Asti to Sicilian wines, to those of the vast majority of Italian regions.
The premium segment, which today is worth 17 percent volume of total exports (with an average ex-cellar price of 8.80 euros/liter and retail price points varying from 13 up to $30 a bottle), would obviously not be able to absorb “epochal” transfers of references from below.
