Price war threatens Prosecco

Rising grape prices and the resulting price war threaten to damage the strength of ‘brand Prosecco’ according to one major producer in the region.

The misty rolling hills of Valdobbiadene

Speaking to the drinks business during a recent visit to London, Paolo Lasagni, managing director of Bosco Viticultori, said:

“There’s huge competition between the co-ops and grape growers are expecting a lot of money from their crops this year, but if the price of Prosecco gets too high suppliers and consumers will start looking for alternatives like Asti Spumante.

Bosco Viticultori supplies grapes for Menage à Trios Prosecco

“Prosecco is in a really good position at the moment, it would be a shame to destroy a fantastic product with a price war. If people speculate too much on price then buyers will look elsewhere for their fizz.”

Lasagni told db that the grape price are likely to rise this year from €1.20 per litre to €1.75, which will dissuade some suppliers from buying at the higher bottle price.

“I think £6.50 for own-label Prosecco is the sweet spot. Supermarkets aren’t losing money on Prosecco but they aren’t making money on it – the favourable exchange rate is helping,” he said.

In July a law was passed in the Prosecco region that allows producers to harvest 180 tonnes of grapes per hectare up from 155 tonnes, which will result in three million hectoliters of Prosecco being produced in 2015, up from 2.3m last year.

Lasagni calculates that a million of the three million hectoliters of Prosecco produced this year will be needed to honour ongoing contracts around the world.

“If consumption continues at its current rate then we’ll barely get to the new vintage without running out, and if consumption rises then we’ll run out before the 2016 vintage goes on sale,” he warned.

Lasagni described the 2015 vintage as “average” from a quantity point of view and “good” from a quality point of view.

He also spoke of a possible relaxing of the rules in the region that would allow sparkling rosé to be produced and bottled as Prosecco, a move he approves of.

“I think it will happen and when it does, we’ll be making it. I’m a fan of rosé and rosé Prosecco is easy to make as you’re allowed to include up to 15% Pinot Noir in the blend. Rabozo is also a good grape for making sparkling rosé,” he said.