Weathering the storm on Europe's wine lake

The current state of European viticulture and vinification offers an interesting lens to observe the correlation between health, the environment, and the economic consequences of public health crises.

Wine output across Italy and France has taken a notable hit this year due to the proliferation of plasmopara viticola, the downy mildew that affects grapevines. The fungus thrived in the warmer, wetter conditions experienced this growing season. In parts of Italy, it has destroyed around half the grape harvest and regions in France, such as Bordeaux, have seen output decreased by nearly twenty percent from the five-year average.

https://www.rfi.fr/en/france/20230917-bad-year-for-italian-grapes-makes-france-the-world-s-top-wine-producer

Although some regions in France have prospered in terms of output nonetheless (1), changing consumer habits have further thrown the industry in turmoil. A significant reduction in demand, due in large part to the closure of bars, restaurants, and public spaces during – and reduced purchasing power in the face of inflation following – the COVID-19 response, has meant that even with reduced output wine is being overproduced to such a degree that it has necessitated public expenditure of up to 200 million euros across Europe to destroy wine and bolster the industry. The economic impact has been substantial – a third of vintners are facing serious financial difficulties in the Bordeaux region alone.

https://www.rfi.fr/en/business-and-tech/20230825-france-eu-to-spend-200-mn-euros-on-destroying-excess-wine

While Europe has experienced a “wine lake” before, this situation highlights the fragility of the structure in the face of environmental and economic disturbances. In the absence of subsidies and external support, further economic deterioration would follow, particularly in regions where vineyards and winemaking are the major economic drivers. This in turn would likely exacerbate existing public health challenges, as the link between health and wealth has long been demonstrated, even among populations in countries with developed healthcare systems (2).

The industry is facing a reduced ability to produce a product for which there is a reduced demand due to the response to a public health emergency. This in turn has the potential to drive other public health crises. In regions largely dependent on wine production, economic diversification may offer some resistance to the environmental, public health, and economic headwinds they face.

More information on the demand side of the crisis as it began to emerge during the COVID-19 response may be found here:

https://www.politico.eu/article/coronavirus-europe-braces-for-return-of-wine-lakes-as-coronavirus-dampens-demand/

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1 – Radio France International (RFI) (2023). ‘Champagne vineyards predict bumper year for 2023 as annual grape harvest begins’, 04 Sept [Online]. Available at: https://www.rfi.fr/en/france/20230904-champagne-vinyards-predict-bumper-year-for-2023-as-annual-grape-harvest-begins.

2 – Sen, A. (1999). ‘Economics and health’, The Lancet, 354(9161 SUPPL), p. SIV20. Available at: https://doi.org/10.1016/S0140-6736(99)90363-X.