The annual Italian wine trade show, Vinitaly, has just ended, and the threatened US tariffs against Italy have just been adjusted down to 10% (for now). What a hell of a week it has been. Now what?
For those who are wondering what direction Italian wine should take in 2025, this could be a bit of a “shaking my head” moment. After all, Kyiv is 1,300 miles from Milan, less than the distance Houston is from New York. And with a protracted war that has taken trade off the table for Italy with Russia, and with an unstable reality driving the American economy (for the foreseeable future), where does Italy pivot to? Local consumption is down, as has alcohol consumption, worldwide. China is seeing their growth slow down, who is going to drink all that Italian wine? Is it time to pare down wine production in Italy? Have we reached that moment?
Again, I am going to take the point of view of the winegrower and winery operator. It is likely that I have vintages in the cellar, mainly reds, waiting for their release date. And some of those release dates are predicated by laws governing such things. So, the wines cannot sit in the barrels indeterminately.
Let’s talk about the white, sparkling and rosé wines first. They are coming up on release dates presently. And with tariffs “paused” for 90 days, I’d be making deals with my US suppliers to get as much wine out of the winery and onto the water ASAP. I’d probably have to give extended payment terms and maybe even discount the wines. Not a fire sale discount, but something to stimulate interest in getting these wines into the market post haste. That would be my strategy for those kinds of wines.
Red wines are a different story. Depending on where my vines are grown and what kind of wines I make, I’d have to consider the longevity of the red wines I was making. Obviously, wines from Tuscany and Piedmont have been thought to lend themselves to greater ageing, especially in the higher appellations (Barolo, Barbaresco, Chianti Classico Riserva, Brunello di Montalcino, and so on). But what if I produce red wine from the Marche or Abruzzo, wines which are meant for earlier drinking and not always with so much bottle age on them? I’d probably be marketing those kinds of wines similar to the whites and rosés. Release them as early as the DOC laws allow (if they are a DOC) and for less significant appellations, move ‘em out as soon as I could.
Italy needs to re-examine their work life. Maybe taking the month off in August might not be in the cards this year. Maybe it won’t matter a bit, depending on one’s cash flow.
In any case, this will be a year to sharpen the pencils and crank everything down in a most economically efficient way. This will not be a Rolex year, more likely a Seiko one. In other words, watch your spending.
I’m fiscally traditional in manners like this. I know the large distribution houses have warehouses loaded with merchandise. 2024 was not a year in which sales set new records for increases. And contractual obligations have not been able to slow the flow down to a slow drip. Everything is flowing as if we didn’t just experience the last four or five months as we did. Which is to say, the element of uncertainty and chaos now must be factored in.
As often is the case, the small growers and producers, along with the small importers, distributors, retailers and restaurants, will feel the pinch more. This is not a good time to be the little guy. But that’s the reality and one must face such things head on. Italy has had worse to deal with in its past. And that’s not to rationalize this topsy-turvy era we find ourselves in. But the aspect of survival is always present and in order to survive, one must evolve with the times. Out run it, out-think it and outlast it. And that is something the Italian mind heart and culture is very adept at.
