Italy’s wine industry clashes over how to tackle a deepening supply glut

Italy’s wine industry is split over how to respond to a weaker market, high cellar inventories and falling bulk prices as producers look ahead to the 2026 harvest, with some groups calling for lower output and others arguing that the priority should be to expand demand at home and abroad.

The debate has intensified in recent months as stocks have remained elevated across Italy and export performance has softened. At issue is whether the country should curb supply through lower yields, a temporary halt to new vineyard planting permits or even vine removal in some areas, or instead focus public and private resources on marketing, innovation and new consumption occasions.

The disagreement reflects the structure of Italian wine itself. The sector includes small estate wineries, large bottlers, cooperatives and appellations with very different market conditions. Measures that may suit one region or category can hurt another, especially in a country where some wines depend on volume sales while others compete on scarcity and price.

Federvini, which represents wine and spirits companies, has argued against broad production cuts. Gabriele Castelli, the group’s director general, said the industry should concentrate on widening markets and stimulating demand if supply is exceeding what buyers currently want. He said tools already exist for appellation wines, including lower yields than those allowed by production rules and storage measures, and warned that suspending new planting authorizations would have limited short-term effect because any impact would likely not be felt for five to six years.

Castelli also said a flat reduction in yields for generic wines would be difficult to apply because market conditions vary widely by product. He described vine removal as an extreme option that cannot easily be discussed in general terms at the national level. In his view, resources should go toward building new markets through product innovation, stronger brands and new moments of consumption, not only through export promotion programs.

That position broadly matches the line taken by Agriculture Minister Francesco Lollobrigida, who has said Italy should not impose uniform solutions on a highly varied agricultural system. Speaking recently in Conegliano during the Assoenologi congress, he said conditions differ sharply from one region to another and that measures such as uprooting vines would be deeply controversial in areas where demand remains strong and producers still see room for growth.

Lollobrigida also dismissed crisis distillation as too small to solve the broader imbalance. He said such interventions would affect only limited volumes and would consume funds in a single year without changing the underlying market. By contrast, he argued that spending on communication and business strengthening could produce more lasting benefits. He said companies that have improved efficiency, lowered costs and built added value are holding up well, while those focused on standardized low-quality output are under greater pressure.

He also framed the issue as one of rural policy as much as market policy. Agriculture support, he said, is justified not only by production but by the role farmers play in maintaining territory and landscapes. For that reason, he suggested that publicly financed vine removal raises broader concerns beyond simple supply management.

Unione Italiana Vini, one of the country’s main trade groups, has taken a more interventionist stance. In a recent statement after its national council meeting in Soave, the organization called for urgent action to address what it described as an imbalance between supply and demand. Its proposals include a temporary stop to new planting authorizations, lower production yields including for DOP and IGP wines, updated production rules and stricter controls on reclassification between appellations.

The group cited data from its observatory showing that Italian winery inventories in April 2026 were up 7.6% from the same period in 2025, while bulk prices for major DOP and IGP wines were down 7%. It also pointed to weaker foreign markets after exports by value fell 3.7% in 2025 from 2024 and shipments outside the European Union declined 11% in the first quarter of 2026.

At the same time, Unione Italiana Vini rejected generalized plans for vine removal, saying they would be ineffective and especially damaging for hillside and mountain areas. Instead, it called for a national strategic plan covering the next five to 10 years to better align production with real demand and strengthen Italian wine’s competitiveness in domestic and international markets.

Cooperatives, which account for more than half of Italy’s wine production, are also divided. Luca Rigotti of Mezzacorona, who leads Confcooperative’s wine sector, said the industry is facing a crisis not seen in many years amid broader economic pressures including wars, higher borrowing costs and weaker consumer purchasing power. But he argued against generalized measures such as blanket yield cuts.

Rigotti said each territory should decide based on its own production profile and market demand whether reductions are needed. Some generic wines require large volumes, he noted, making across-the-board cuts impractical. He said local consortia and regional authorities already have tools they can use with industry support, including storage programs, temporary limits on vineyard expansion and yield management tailored to local conditions.

Legacoop Agroalimentare has pushed harder for immediate restraint on vineyard growth. Its president, Cristian Maretti, said a temporary suspension of new planting authorizations is necessary given current market risks. Under existing European rules, Italy can authorize nearly 7,000 new hectares of vineyards each year. Maretti said that now that the European Union’s recent wine package allows member states to reduce those authorizations even to 0%, Italy should consider using that flexibility to avoid adding supply during a fragile period.

Legacoop argues that cutting yields alone is not enough because inventory levels differ sharply by product category, wine type and territory. A uniform national assessment would miss those differences and could lead to ineffective policy, Maretti said. He added that crisis tools such as distillation or vine removal should not be ruled out entirely for areas or appellations facing structural difficulty.

That view contrasts with the position of FIVI, the federation of independent winegrowers led by Rita Babini. When the European Union approved its latest wine package in recent weeks, FIVI criticized the inclusion of vine removal among sector measures eligible for European funding. The group said public funds should support growth and competitiveness rather than pay producers to pull out vineyards.

The dispute now heading into discussions with institutions at Italy’s so-called Wine Table shows how hard it will be to reach a common line. Producers who rely on volume fear that broad cuts in yields or planting rights could damage viable businesses just when some companies are still investing and growing. Others say inventories are too high and prices too weak to delay action any longer.

Behind the policy arguments is a deeper question about what kind of wine economy Italy wants to protect during a downturn: one centered on immediate supply discipline to defend grape and bulk wine prices at origin, or one that accepts short-term pressure while trying to build stronger demand through branding, innovation and market development.

For now, there is no consensus. What exists instead is a map of competing interests across regions, appellations and business models at a moment when Italy’s image as one of the world’s leading wine nations is colliding with slower sales and rising concern over how much wine its cellars can absorb before the next harvest arrives.