European Wine Producers Face Mounting Pressures as Costs Rise and Harvests Shrink

The European Wine Industry Association (AIVE) has called on producers and cooperatives not to sell wine below production costs during the current grape harvest. The association issued a statement urging the sector to avoid what it described as “selling at a loss,” warning that such practices could harm both growers and the broader wine industry.

Lorenzo Delgado, president of AIVE, said that wine prices have shown signs of recovery in recent months. This trend is attributed to lower stocks in wineries and cooperatives, following a period of reduced harvests in major Spanish wine regions such as La Mancha, La Rioja, Extremadura, Andalusia, and Requena. Production has also been lower in France and Italy, two of Europe’s largest wine producers. Delgado noted that these factors have led to less wine and grape must being stored after markets began to recover.

Delgado also highlighted a growing concern among Spanish grape growers. Many are choosing not to harvest or are abandoning low-yield, dry-farmed vineyards due to poor profitability and a lack of financial support for uprooting old vines. In Castilla-La Mancha, one of Spain’s most important wine regions, many vineyards are aging and suffering from drought and pests, resulting in smaller yields.

The association emphasized that the cost of producing wine has increased this season. Rising expenses for energy, fuel, taxes, labor, and machinery have all contributed to higher production costs. At the same time, the grape harvest is expected to be significantly smaller than usual. According to AIVE estimates, this year’s production in Castilla-La Mancha will be about 30 percent lower than last year’s already reduced harvest, which itself was 25 to 30 percent below average. Compared to a typical year, this season’s output could be down by more than half.

Delgado expressed hope that wine prices will continue to rise in response to these conditions. He urged all players in the supply chain—especially cooperatives—not to sell their products below cost. He warned that doing so would further erode profit margins for growers at a time when it is becoming increasingly expensive to produce wine.

AIVE also called on government authorities to intervene and prevent sales at a loss within the sector. The association believes that stronger oversight is needed to ensure fair pricing practices and protect the long-term viability of European wine production.

In his statement, Delgado also addressed an issue unique to the agricultural sector: the continued use of Spain’s former currency, the peseta, when quoting prices. He argued that this practice should end since the peseta has not been in circulation for years and only persists in some rural areas.

The association’s appeal comes at a critical moment for European winemakers facing economic pressures from climate change, rising costs, and shifting market dynamics. The outcome of this year’s harvest and subsequent pricing decisions could have lasting effects on both producers and consumers across Europe.