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Italian wine producers look to international growth to escape domestic economy

Italian wine producers are increasingly looking to international markets to escape their own crippled domestic economy.


Producer after producer at this week’s ViniItaly wine fair in Verona confirmed their commitment to develop or reinforce existing relationships in the international market due to a sluggish domestic market where wine consumption has fallen to its lowest level since the 19th century.


There were calls at the show from senior Italian business leaders, like Gennaro Sangiuliano, deputy director of media group and broadcaster, TG1 Rai, for more to be done by the Italian government to streamline suffocating bureaucracy which is holding back business. It was estimated, for example, that corporate bureaucracy has an “equivalent weight” of adding 100 working days, 6 cents a bottle and two kilos of paper for every litre of wine produced. All of which has to be passed along the wine supply chain.


But the opportunities for Italian wine overseas have never been stronger. Italy overtook France as the largest wine exporting country in the world in 2012, according to Vinitaly figures. Almost 50% of total Italian wine sales are now generated from exports, more than double the European average of 18%. Despite the current economic challenges at home, Italian wine exports grew 6.5% generating 4.7 billion euros in business and it is expected to increase in the coming year.


“The Italian market is a disaster,” said Elisabetta Missoni Foffani, owner of Azienda Agricola Foffani. Foffani is currently exporting 80% of its production to the US, Germany, Singapore, Hong Kong and South America. It is also adding more unique wines to its portfolio, including a white Merlot and a premium Moscato Rosa, in an effort to differentiate its wines in the export market.


Leon Femfert of Fattoria Nittardi, agreed, “growth is not at home”. Fattoria Nittardi exports 85% of its wines, focusing on Norway, Russia and the UK. His father, Peter, added: “If you want a quality wine, you have to pay for it.” Many producers aren’t able to find these opportunities domestically, he stressed.


The economic crisis is forcing Italian producers to look at new emerging markets such as China, which was a big focus at this year’s Vinitaly, with a number of seminars focusing how to break into the Chinese market using social media and e-commerce.

Elena Coati, representing her family’s winery, Corte Rugolin, said 80% of her sales were in international exports and that focusing on China is critical. “We want it to be our target market,” she said.


Mario Catania, the Italian minister for Agricultural Policies, said there “were huge spaces opening up” in Asia. He explained: “We are very strong on historical markets such as the US and Germany but we are rather behind in new markets such as Asia and China. We must work to regain lost ground, we must work better as a system and we must avoid wasting resources.”


It was also confirmed at Vinitaly that the European Commission has agreed a 400 million euro annual budget to help promote and market Italian wine.

Source: Harpers