Global Wine Production Stays Weak Under Tariff Pressure

The global wine sector entered 2025 under pressure from tariffs, climate shocks and weaker consumer demand, according to an annual report released Tuesday by the International Organisation of Vine and Wine, which said the industry was adjusting to lower production, shrinking vineyard area and a slowdown in international trade.

The report said the world’s vineyard surface fell for a sixth straight year, to 7.0 million hectares, down 0.8% from 2024. Global wine production was estimated at 227 million hectoliters, up just 0.6% from the previous year but still well below historical averages. Consumption was estimated at 208 million hectoliters, down 2.7% from 2024, while exports fell to 94.8 million hectoliters, down 4.7%, and export value dropped to 33.8 billion euros, down 6.7%.

The organization said the figures reflected a sector that is being reshaped by weather extremes, changing drinking habits and trade tensions, especially tariff policies that disrupted flows in key markets. The United States remained the largest wine importer by value, but imports there fell to 5.5 billion euros, down 12% from 2024.

OIV Director General John Barker said in a statement that the wine sector had spent several years adapting to “ongoing climatic, economic and societal challenges,” and that tariff-related disruption in 2025 added another layer of difficulty for producers, exporters and supply chains. He said the industry was showing resilience by seeking new markets and adjusting production capacity to demand.

Climate conditions continued to weigh on output in both hemispheres. The OIV said low harvests in several major producing countries helped keep global production below consumption for a third consecutive year. Italy remained the world’s largest producer at 44.4 million hectoliters, followed by France at 36.1 million and Spain at 28.7 million. The United States produced an estimated 20 million hectoliters.

Some countries recovered after weak harvests in 2024. Brazil, New Zealand, South Africa and Moldova all posted rebounds, while Chile saw another decline because of water scarcity and lower yields. New Zealand recorded one of its strongest harvests on record.

The report also pointed to a continued contraction in vineyard area in major producing countries as growers responded to market conditions rather than expanding acreage. France’s vineyard surface declined by 4.4%, while Spain fell by 1.3% and Italy by 0.3%. China’s vineyard area was unchanged from a year earlier.

On the consumption side, the OIV said demand continued to soften in mature markets such as the United States and China, where younger consumers are drinking less wine and broader lifestyle changes are affecting sales. The United States remained the largest consuming market at 31.9 million hectoliters, followed by France at 22 million and Italy at 20.2 million.

The organization said some markets showed growth despite the broader slowdown. Brazil reached a record consumption level of 4.4 million hectoliters, while Portugal also posted a record high at 5.6 million hectoliters.

Trade remained central to the sector even as volumes fell. The OIV said about 46% of wine consumed globally is traded across borders, underscoring how dependent producers are on export markets when domestic demand weakens. It said average export prices slipped slightly in 2025 but remained above pre-pandemic levels.

The report described the market as broadly balanced because low production has offset weaker consumption and limited pressure on inventories. It estimated that industrial uses such as distillation, vinegar and wine-based products absorb about 30 million hectoliters a year, leaving a gap between production and consumption of about 18.7 million hectoliters in 2025.

The OIV said recent bilateral and multilateral trade agreements could help stabilize conditions for exporters in coming years, but it warned that climate volatility and policy uncertainty would continue to shape decisions on planting, production and trade across the global wine business.