How the Russian/Ukranian War is effecting the wine industry
Wine Importer | Wine List Consultant | Speaker
While travelling through France visiting some suppliers, I’m reminded on the daily of how lucky we are to live in a country that has resources, can support itself if we really needed to and to be as isolated from the rest of the world that we are. Over the last week, I’ve had the privilege of driving through France to meet suppliers of brands I started importing during COVID. It’s been an incredible journey to help me understand the winemaking styles and the terroir of the regions.
What I wasn’t expecting was to find out about why all the prices of our wines have increased because of the war between Russia and Ukraine.
Simply, the limited supply of oil and gas.
Russia is the third largest producer of oil globally and their gas exports make up for 40% of the EUs natural gas. With the current trade restrictions on Russia, Germany and Italy have now lost their major source of gas. This has resulted in soaring energy costs which has inhabited production of glass and aluminum. This means the cost of wine capsules as well as the glass wine bottles have increased significantly.
Not only has this led to an increase in the cost of glass production, the limited amount of glass being produced has shifted in focus to essential services like producing glass for pharmaceutical companies to cater to the increases in hospitalisations happening within the war zone. While sitting with Florence at Le Cret de Bine in Beaujolais, she shared her frustrations around needing to bottle her Chardonnay and not being able to buy and receive glass wine bottles.
It might sound obvious but with this limit on oil and gas, cost of transport has absolutely skyrocketed globally. Just to put it in perspective, a container from Italy is now costing almost $2000USD more to ship to Australia.
Between shipping costs and cost of dry goods, don’t be surprised to see prices of wines across the world increase by around 20-30%.