Entry level Spanish producers ‘sweating bullets’ as prices fall
Spanish producers at the bottom end of the market are “sweating bullets” as they still have wine in their cellars and the next harvest is looming, according to one prominent Master of Wine.
Justin Knock MW, wine consultant at Encirc – the newly rebranded Quinn Glass and CoBevCo group told Harpers.co.uk at London Wine Fair: “Spain is still pumping out that monster vintage. They’re sweating bullets as they’re three months from the next harvest and they still have a gazillion litres of wine. Prices have halved in the last 12 to 18 months.”
Bottom-end Spanish wine producers are worried
Meanwhile Giles Cooke MW, wine development director at Alliance Wines, said that Spain was suffering from “structural problems” but that it hadn’t seen any signs of “fire sales”. Although Alliance sticks to the more premium end of Spanish wines, where demand is still very strong and prices have held their own, Cooke acknowledged that Spain has a lot of “structural problems because of the vineyard size and when big rains come wines then just go down to commodity level. In the past they’ve not focused on taking out the right vineyards – they took out old vine Garnacha in Calatayud, when they should have been taking some of the volume out of La Mancha. It will take some short-term pain to get back in sync – there would be a shortage in poor years and a little bit too much in the big years.”
Another bulk supplier said that “you could rock up with a truck and load” in Spain. According to this supplier, prices will never drop below what distillers will pay – which works out at 2€ per hectograde per litre. But this means that wines are available at 23 and 23 cents per litre, and “nobody makes money on that”.
Murphy Wine Company’s most recent price list, published on Harpers.co.uk, showed bulk prices for Spanish dry white wine starting at £0.21 FCA, while the French equivalent is starting at more than three times that at £0.66.