Emerging Europe winemakers sparkle as global wine production declines

Global wine production is set to face yet another year of decline, with 2024 projected to see a reduction of up to 2% compared to already low levels in 2023. According to the International Organisation of Vine and Wine (OIV), the downturn is attributed primarily to adverse climatic conditions that have wreaked havoc across wine-growing regions worldwide. 

However, amid this global slump, several countries in Emerging Europe, including Georgia, Hungary and Russia, are bucking the trend, with forecasts indicating average or above-average production.

This year’s first estimates, reported in the OIV’s World Wine Production Outlook for 2024, mirrors the disruptions seen in 2023, as the wine industry grapples with the consequences of unpredictable weather patterns. The OIV said that weather events contributed to a global production forecast of between 227mn hectolitres (hl) and 235mn hl.

At the mid-point of this range, global output is expected to be 231mn hl, which would be a 2% decrease from 2023 and a 13% drop from the ten-year average. If these projections hold true, 2024 could see the lowest global wine output since 1961.

The OIV figures are based on data from 29 countries that accounted for 85% of global production last year. 

The European Union, which historically dominates global wine production, has had a particularly challenging year. Wine production in the bloc is expected to fall to 139mn hl, a decline of nearly 5mn hl from 2023, or a 3% reduction. This would be the lowest production level since the early 2000s. 

“As with 2023, extreme or atypical meteorological events are the key influence on global production, with early frosts, heavy rainfall and prolonged drought dramatically impacting vineyard productivity,” the report said

The OIV’s report pointed to the vulnerability of the global wine industry to the increasingly erratic climate. 

“Vineyards experienced a diverse array of environmental stressors, ranging from severe drought-induced hydric stress in some areas to unprecedented heavy rainfall and destructive storms in others. These extreme weather events precipitated increased disease pressure, substantial vineyard damage and difficult grape cultivation conditions,” the report said. 

In the European Union, France, the world’s largest producer in 2023, has recorded the most significant decrease in production, a result of harsh weather conditions across the country.

Despite these challenges, there are some bright spots, especially in Central and Eastern Europe. Notably, Hungary’s wine production is forecast to rise by 22%, with a production volume of 3.0mn hl – its highest since 2010 and 19% above its five-year average. 

Some other eastern EU countries also saw positive developments, although their gains were more modest. Slovenia, Croatia and Slovakia all reported small increases in production compared to 2023, but these levels still fall short of their five-year averages. 

On the other hand, countries like Romania and Czechia are grappling with severe production setbacks. Romania’s wine output is expected to drop by 20% to 3.7mn hl, largely due to droughts and spring frosts that affected vineyards during crucial growing periods. Similarly, Czechia’s production is expected to fall by 28%, with a forecast of just 0.3mn hl, marking a 38% decrease from its five-year average.

Elsewhere in Emerging Europe, Georgia, in particular, stands out as one of the strongest performers in 2024. The country is expected to see a 27% increase in wine production, reaching 2.4mn hl – its highest level since the early 2000s. Georgia reported total revenue from wine exports reached $196.6mn, up 16.1% y/y, in the first eight months of 2024. 

Moldova, home to Bucharest-listed Purcari and numerous other winemakers, is set to produce 1.5mn hl in 2024. While this is a 16% decline from the highly productive year of 2023, it remains 6% above its five-year average.

Russia’s wine production in 2024 is projected to reach 4.7mn hl, marking an increase of 0.2mn hl compared to the previous year and a 4% rise above the five-year average. The country’s Federal Service for Control over Alcohol and Tobacco Markets (Rosalkogoltabakkontrol) has already announced a 28% y/y increase in sparkling wine production in the first nine months of the year. 

The OIV’s report says that climate-induced stress on vineyards is not limited to Europe. In the Southern Hemisphere, where harvests typically conclude in the first half of the year, wine production is similarly subdued. With a 2% decrease projected for 2024, wine production in countries such as Argentina, Chile and South Africa is expected to be 12% below the five-year average, representing the lowest output since 2004.