An importers view on the depressing realities of the world economy for the Italian wine industry…from a ‘safe haven’ in Australia

In the past few years, it has been hard to think why my family would want to leave a place like Italy behind? So beautiful in every sense of the word. However, the economic realities and just how well Australia has continued to grow in the harsh times maybe gives me an understanding on just how hard Italy was in the post war early 1950’s.

We take ‘la dolce vita’ for granted. In Italy this has not always been the case. Many in the past have struggled to find employment and also put food on the family table. It seems that whilst we have not returned to the depressive state of Italy post World War Two, we can at least understand just how hard life was.

As an importer of Italian wine into Australia, the amount of emails and phone calls from wineries I have never heard of, offering free samples, massive discounts and endless trading terms is not something I take pleasure in. I like to pay my wineries (most of them within a few weeks of placing the order) as quickly as possible as we know as an exporter of our own wines, just how important this is.

However, I see that there is no turning back on the hard road for a long time for Italian wineries. The world is flooded with so much wine, as an importer we not only have to complete with Australian wines, but also the wines of France, Spain and many many emerging markets like Chile and Argentina in Australia. Furthermore there is also only so many wineries we can take on board.

My idea of a complete portfolio is not to have 100 producers in our portfolio. For me, this serves no purpose. This year we have stopped importing one winery from the north and taken on a new winery from the South. We will most likely have a new winery from Campania and then that is it. I could not give the level of support and effort to more than this.

So what happens to all the wineries emailing and phoning me from Italy to look at and hopefully import their wines?

Well the realistic answer is that nothing will happen. A polite email back or phone call to say ‘thanks, but no thanks’ will be as close as they come to Mondo Imports in Australia. This is the sad truth.

It may be the case that this is the same scenario with most markets around the world. In Australia our economy has been well placed after the hiccup of the GFC and we have seen massive growth in our business in the last few years. Spare a thought to markets like America and the United Kingdon. They already reached saturation point a few years ago and would be most likely looking to cull rather than expand their portfolio’s.

So this leaves many Italian wineries squeezed out of many markets: unable to even gain entry to these markets as depressed economic conditions turns things from bad to worse. This means that they will have to concentrate on their own domestic market. In the past, it may have been easier to neglect the Italian market with USA, UK and the rest of the world creating an almost unstoppable demand for Italian wine. Obviously this not the case now.

Those wineries that have been conservative and not taken on too debt will be able to baton down the hatches and ride these tough times out. However, if they are like the Italian Government and borrowed without any regard, then this will be the beginning of the end for many. In tough times, large amounts of debt is like a terminal illness.

Next week starts the beginning of winemaker visits from Italy and I will be fascinated to hear what conditions are like on the ground in Italy. In March I will see these conditions first hand and get a grip on just how bad things are.

Let’s hope that the depressing conditions that currently exist in world economies can improve. Currently I see no light at the end of the tunnel. Italy and the rest of Europe need to get a handle on the situation otherwise we are going to see the demise of the euro and who knows what else very quickly.

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3 thoughts on “An importers view on the depressing realities of the world economy for the Italian wine industry…from a ‘safe haven’ in Australia”

  1. Tough times ahead for many in Europe over the coming years, if not decades. I just can’t see how they can move past those mountains of debt…and I don’t think the current solutions will do anymore than put off the inevitable. We are just starting to see the tip of the iceberg it here in Australia too I think, the non mining economy is slowing down quite rapidly.

    You’re right, most producers (mainly the older ones) that don’t have big debts will be fine in the long run, the quality focused smaller guys unfortunately are often hardest hit.

    I’ve been reading about some upsides tho, more social than anything. Apparently lots of city dwellers are heading back to their villages out in the country, its cheaper to live, especially if its an old family home and if you’ve got some land to tend. Also in Spain, all of the development that was threatening top vineyard land has stopped…so all not all bad!

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