Prosecco prices may rise as Italy hit by commodity price increases
Soaring prices for wood, metal, paper and glass are likely to impact bottle prices of Prosecco, Primitivo and Chianti, reveals analysis by Corriere Vinicolo.
Italian wine exports were up 15.6% in the first half of the year, but a worrying headwind threatens to put a stop to the post-Covid pick-up: a sharp increase in commodities’ prices.
Wineries across Italy face significant price movements for goods such as wood, metal, paper and glass: +53% price leap for wooden products, +44% for metals, +60% for packaging papers and +20% for glass bottles. And the situation is expected to worsen by the time that the wines from this year’s short harvest become available, with Italy’s harvest predicted to be down 9% on the estimated quantities for the current year. This is likely to cause an inevitable jump in prices for wine.
The analysis was presented in a survey by Corriere Vinicolo, the weekly magazine of the Unione Italiana Vini (association of Italian wine producers and traders).
For now, the only certainty is that there will be an increase in the costs of raw materials and transport, which varies from 10 to 50% across the country. The blow comes just as many wine companies have vowed to absorb a part of their increases in order to defend their positions on international markets.
The price increase for commodities also affects companies which supply barriques and large barrels to Italian wineries, such as Garbellotto, which reports an increase of 20-25% for oak, while the price of steel (used to produce rims) has doubled. The cost of creating lamellar beams to make the supports for barrels and barriques has almost tripled. “We were forced, for the first time in 20 years, to raise twice in the same year the prices of our products” said Piero Garbellotto, CEO of the company.
“If the prices of materials increase it is because there is little availability, and this is the biggest problem. The whole supply chain must realize that at this moment the risk is not so much of paying more for the material, but of not having it at all ” added Michele Moglia, CEO of Enoplastic, a company that produces capsules for wines and sparkling wines.
Italian producers shared with Corriere Vinicolo that it is not only the price increases that concern them, but also the aggravating factor of energy bills, which have always been heavier in Italy than in competitor countries due to a unique tax component. According to Corriere Vinicolo, energy costs have increased by 138% compared to 2020.
Double-digit price increases are expected for wines from Italy’s most in-demand denominations such as Prosecco, Primitivo and Chianti, largely caused by the adverse weather conditions that occurred throughout 2021: the spring frost being particularly damaging to the vineyards based down-valley, as well as summer hailstorms. A very dry summer across almost all of Italy has also impacted the harvest in quantitative terms.
To date, the wineries have not yet applied the price increases, which have been postponed to the beginning of 2022.