Spain is worlds biggest wine exporter but why does it sell its vino so cheap?
Spain has yet again beaten Italy and France to remain the worlds biggest exporter of wine exporting a whopping 22.8 million hectolitres.
Seems like great news for Spanish winemakers, right?
Wrong. Because Spain is selling off its plonk cheap: at less than half the price of Italian and a quarter of the price demanded for French produce.
According to the latest data published by the Spanish wine market observatory (Observatorio Español de los Mercados del Vino – OEMV), wine exports peaked at 22.8 million hectolitres during 2017, putting the nation far ahead of its competitors Italy (21 million hectolitres) and France (15 million hectolitres).
But this represented only €2,8 billion in sales for Spain, while Italys wine export brought €6 billion and France more than tripled Spains with value sales of €9 billion.
Spains average price per litre of wine currently stands at €1.25, while French wine commands €6 per litre and Italian wine €2.78.
The problem lies in the fact that the majority of Spanish wine destined for export is sold in bulk (12.6 million hectolitres in 2017 compared to 10.2 million hectolitres of bottled wines)
France is the biggest buyer of Spanish wines, purchasing it cheap in bulk then rebottling it and selling it on at a higher price as vin table.
In terms of vineyard area, Spain has the highest amount in the world – almost one million hectares (2.4 million acres) but manycooperatives sell their wine in bulk as its quicker and easier than having to bottle it, market, and distribute it themselves.
Spain was also late to the international market.
"Both France and Italy have a much better international presence, they have more experience in marketing their products and have been exporting for much longer than Spanish producers," explained Nairy Chaglasyan, who worked in exports for one of Spains leading wine producers.
But the recent figures do show that demand for Spanish wine is booming in China, which has climbed up the ranking to become Spains fifth largest wine market.
France, Germany, the United Kingdom, Italy and Portugal, account for 90 percent of exports of Spanish wine but last year saw a 48 percent increase on the year before of wine exported to China.
Despite the cheap bulk wine flowing abroad, Spain still maintains a good reputation for its bottled wine.
"The average (quality) of Spanish wines packed in many of the final consumer markets is a reasonably good average," said Rafael del Rey, general manager of the OEMV.
Bottle of Spain at a tasting in the USA: Photo: AFP