Portugal’s Wine Production Falls to Lowest Level in a Decade as Adverse Weather Hits Vineyards

Wine producers in Portugal are reporting a significant drop in production for 2025, confirming estimates from the National Institute of Statistics (INE) that point to a 14% decrease compared to the 2024 harvest and a 16% decline against the average of the last five years. Ana Isabel Alves, executive director of ACIBEV – the Association of Wines and Spirits of Portugal, said that adverse weather conditions were the main cause, forcing many vineyards to increase their use of plant protection treatments throughout the year.

Producers say that 2025 was an especially demanding agricultural year. Many small-scale winegrowers struggled to keep up with necessary treatments due to economic constraints and lack of equipment, leading to even sharper production declines in some areas. The summer’s extreme heat also caused a marked reduction in grape weight, further impacting yields.

Despite these challenges, Alves noted that the sector entered the 2025 harvest with surplus stocks. She explained that a production drop between 10% and 20% will likely help adjust reserves and could stabilize prices. However, she described this as an “unfair way” for the sector to balance its inventory.

The INE’s first estimate for the “Economic Accounts for Agriculture – 2025” shows that wine production, one of Portugal’s main agricultural outputs alongside olive oil, is at its lowest level in a decade. Still, expectations remain high for quality, with balanced sugar levels and good aromatic concentration anticipated in this year’s wines.

Sogrape, one of Portugal’s largest wine producers, also reported lower volumes but noted regional differences. João Gomes da Silva, Sogrape’s executive director, said a rainy and mild spring encouraged diseases like mildew, while a hot and dry summer led to sunburn and dehydration of grapes. Despite these setbacks, Sogrape expects the impact to be manageable due to its diversified sourcing strategy and inventory management. The company believes the high quality of this year’s harvest will help maintain value across its main brands.

Casa Santos Lima echoed these observations, confirming lower production in 2025 compared to 2024 but highlighting the “exceptional quality” of grapes harvested. The company says it has enough reserves to meet market demand despite reduced output.

On the export front, ACIBEV pointed out that instability linked to U.S. tariff policy has hurt Portuguese wine exports. Importers have been reluctant to buy without knowing final tariff rates, fearing price increases by the time shipments arrive in the U.S. Alves said this unpredictability has been more damaging than the tariffs themselves. She also noted that U.S. tariffs are currently lower for wines from competing countries such as Argentina, Australia, Chile and New Zealand, creating what she called “less fair” competition.

Looking ahead, ACIBEV expects sales to hold steady in 2026 thanks in part to a trade agreement between the European Union and Mercosur and hopes for a free trade deal with India soon. Sogrape described the 15% U.S. tariff on European wines as a source of “enormous uncertainty,” adding to pressures already felt since the COVID-19 pandemic. The company sees Mercosur as an important step toward strengthening European wine competitiveness and is approaching 2026 with caution but also confidence.

Casa Santos Lima is responding to geopolitical challenges by focusing on innovation and diversification—both in products and export destinations—to better match different price points and consumer preferences worldwide. The company expects 2026 to be particularly challenging for Portugal’s wine sector as difficulties from 2025 may intensify amid stronger competition both domestically and internationally.