Argentina and Moldova are star performers as WBWE gets industry going again
By Richard Siddle
For seasoned campaigners at the World Bulk Wine Exhibition it was a case of getting back to
normal at this week’s show, with plenty of quality wine to buy at good value prices.
But then that did depend on which part of the hall you were in and what you were there to buy and sell.
The two clear winners at the show, in terms of having wine to sell at prices that attracted the most
coveted buyers, were Argentina and Moldova. As Mark Roberts, sales director at Lanchester Wines in the UK said: “That’s where the value is.”
The spotlight is once again fully back on Argentina as its weakened economy and struggling
currency, coupled with a much larger than average 2019 harvest, meant that prices for its bulk wine have plummeted to as far as €0.50 cents per litre for the most in demand generic varieties.
In fact the biggest issue for Argentine producers was finding enough buyers to empty their tanks
before the next above average harvest is expected in the first quarter of next year.
All this interest, though, also brings added pressure for Argentina producers to live up to the expectations of the market and provide buyers with the full service they require. An area where Argentina, as a whole, has struggled in the past, not always delivering on the promises and contracts made.
Different dynamics
But the dramatic fall in prices in Argentina, and to a lesser extent in Chile, looks like
changing the usual dynamics of international bulk wine prices.
Let’s take Spain. Here a smaller 2019 harvest in key bulk producing areas such as Castilla La
Mancha, and a hardening of prices as a result is not necessarily going to see the usual re-adjustment of prices around the world, said Robin Copestick, managing director of Freixenet Copestick.
He was at the show visiting a number of its bulk suppliers, noticeably Penaflor in Argentina, and he sees Argentina’s low prices continuing, regardless of the situation in Spain.
Juan Fuente Rus, managing director of major La Mancha co-operative, Manjavacas, confirmed to VINEX that its production was down by 15% for the 2019 harvest and with no roll over stock from 2018 he would expect to see prices rise for some grapes. But it will depend on the quality and it won’t be for all varieties, he stressed.
Time for Moldova
It seems Moldova’s years of persistence trying to make it on the international stage is
finally starting to pay dividends. Thanks to the winning combination of big volumes, good quality
and great prices. Both for international and local varieties.
It’s clear Moldova’s serious emergence on the bulk market is part word of mouth as buyers,
retailers and distributors get to see more of what the producers can do and experience for themselves the step change in quality.
Lesley Cook, head of buying at Lanchester Wines, said it has been working with Moldova for at least six years and first went there for Pinot Grigio. The quality and diversity has moved on a great deal since then, she added. The main indigenous varieties, like Feteasca Neagra, are also great for blending, she said. “We have switched our Merlot to Moldova now and away from South Africa due to pricing. The styles of their wines have improved over the last five years and become a lot more commercial,” she added.
The feedback, though, from across the buyers that VINEX spoke to is that it’s a mixed picture
and that the leading players are very much head and shoulders ahead of the rest of the industry.
But 2019 will be seen as the year that Moldova really came to the party.
Andrian Digolean, of Wines of Moldova, said that whilst its bulk production was up to 70% of its exports it was also keen to promote its bottled and premium wines too.
Moldova is clearly being helped by government funding, particularly around determining which grape varieties are best suited to which vineyard areas, said Digolean. Which, in turn, is having a big impact on the quality of its wines.
It is, for example, investing a great deal in looking at how different grape varieties, including its indigenous grapes, cope in different climates. Wines of Moldova have set up six experimental plots in each of its three main wine regions to see how different grapes ripen, and how they use water and respond to temperature changes, humidity and winds.
Digolean told a conference at WBWE that it had seen big changes in terms of abv levels, which had increased for some varieties from 13-15% over the last three years, as well as changes in acidity of up to 25-30%. The key was to determine which varieties can deal with all these changes to still make good quality, fresh wines for its export markets.
Which means encouraging producers to plant more climate resistant varieties and, in time, looking to plant more vines in the cooler, more northern parts of the country.
“We are seeing more producers doing this,” said Digolean, and the number of hectares dedicated to resistant varieties is now closer to a 1000 hectares compared to 100 a few years ago.
Ready but waiting
Elsewhere the mood was more cautious with a lot of buyers and producers reluctant to show their
hand when it came to the major New World countries, particularly South Africa and Australia, as the market awaits just how good the forthcoming 2020 harvest might be.
The good news for South Africa is that buyers are starting to come back and ask questions again
after two years effectively in the bulk wilderness as short, drought driven harvests, saw stocks
plummet and prices jump up, said Bernard Fontannaz, managing director at Origin Wine.
Prices have risen so much in South Africa for bulk that is has for many buyers priced itself out of the market, particularly in light with the crop and prices available in Argentina, was the common consensus amongst buyers.
Rollo Gabb of Cape Wine Exporters and Journeys End in South Africa said the industry is going to need to have tough conversations about how far they are willing to go on bringing prices down to get the market going again. Fontannaz agreed, but said at least they were back in the debate again and was hopeful the market will return in 2020. But he admitted it was “tough and challenging”.
This year’s WBWE was once again an opportunity for the global wine bulk industry to come
together and share ideas and insights. None more so than at the high quality and diverse sessions held as part of full conference programme, covering debates and talks on a wide range of issues.
Highlights included a high level debate on the US, California and bulk wine market and how producers were having to cope with what was described as a “wine glut” that had seen prices for bulk wines plummet. Its biggest challenge was finding enough buyers to come into its market.
Steve Daniel, head wine buyer for Hallgarten Druitt, the national distributor in the UK, said he was on the look out for more premium Pinot Noir from the US and California than the lake of Cabernet Sauvignon that was available and not suitable for the UK market.
* Next week we will look closer at some of the conference themes at WBWE and how bulk wine is helping on and off-trade customers offer a more diverse range of formats and packaging to their customers.