Angelo Gaja: the coming CRISIS in wine

It is generally believed that the current financial crisis will have negative effects on the
economy, creating unemployment, cash-flow problems, plunging consumption; all of
which, together, mean that Italy will drink less wine. Stocks of unsold wine, instead, will
increase as a result of greater production of wine in 2008 compared to 2007 and of
unfortunately predictable lower exports.
The EEC has declared war on overproduction in the sector, requesting that wineproducing
countries extirpate a certain amount of vineyard acreage, lowering and then
gradually eliminating public subsidies for the destruction of stocks, which simply
subsidize over-production, and allocating funds for promoting the consumption of wine
in non-European countries.
In light of these considerations, what is the strategy which Italy should choose?
LOWERED CONSUMPTION IN THE DOMESTIC MARKET. A riddle of voices has, for
many years, invoked measures by Italian authorities to halt the drop of pro-capita
consumption of wine, but the measures suggested, in large part, appear to be ineffective.
Systematically dragging wine into the streets and squares, as the association Città del Vino
has done during festivals, public events, and fairs, is not only a banal response but
unadvisable, a bad example, as well. Wine is an alcoholic beverage and it is not acceptable
that drinking it in public should be encouraged. Promotional efforts on behalf of tourism
in certain parts of Italy have taken wine as a hostage in the hope of attracting a larger
number of visitors, but there have been very few demonstrable benefits in larger or greater
overall consumption. In this way, over 50% of available funds for the promotion of wine in
Italy are wasted: these resources must be recovered and channelled towards well
conceived promotional campaigns in foreign markets. And the promotion of wine in Italy
needs to be fundamentally rethought.
THE IMPORTANCE OF FOREIGN MARKETS. Export markets are a priceless and
indispensable outlet for Italian wine. Italy has the duty, and also the potential, to produce
wine of real quality, and the quantities of fine wine which remain unsold on domestic
markets are an asset, not a liability. Foreign markets offer excellent opportunities for
capable and enterprising producers: Italy has over 35,000 bottlers of wine, a human
resource of incomparable value which includes many different types of firms. But only
four thousand are habitual or occasional exporters, far too low a number. Only increased
exports can save Italian wine, and it precisely to this sector that unused energies, spared or
neglected in this past, must be dedicated. Both short-term and medium-to-long-term
programs are needed.
DISTRIBUTION OF SUBSIDIES AND INCENTIVES. A large part of the subsidies for the
promotion of Italian wine must be transferred from the domestic to foreign markets, but
the distribution of European Community funds to Italian regions, as it has operated until
now, goes in the exact opposite direction. It is highly advisable that new political
initiatives orient public funds towards effective programs aimed at creating real demand
for Italian wine in foreign markets.
MEASURES TO BE TAKEN
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Time is of the essence, within a few years Italy could find itself literally up to its neck in
wine. Programs for the extirpation of vineyards which produce excess wine for which
there is no demand need to be put into place as rapidly as possible, using EEC funds
available for this purpose.
Other measures, medium and long-term in nature, can only be put into place at the
national level.
A project aimed at creating 1500-2000 new exporters must be undertaken, using the
resources supplied by the 35,000 already existing bottlers.
And then investments aimed at professional formation must be begun.
Courses should be set up to create commercial operators capable of aggressive campaigns
in foreign markets with the express aim of stimulating or increasing demand for wine and
other products of Italian agriculture.
The existing network of schools of Italian cooking must be supported and, equally
important, new schools to teach Italian cuisine must be established in Russia, India, and
China, where Italian emigrants have yet to arrive: in these countries there is an important
and unsatisfied demand for trained chefs of Italian cooking. By filling this gap, it will be
possible to establish new Italian restaurants which, in their turn, will notably expand
demand for Italian wine and food.
Angelo Gaja
November 2008