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Weather: Wine Institute expects only a small price jump after late frost

Weather: Wine Institute expects only a small price jump after late frost

Late frost has damaged grape vines in many regions of Germany. Experts estimate damage in the millions. So what does this mean for wine lovers?

The frost damage in German wine-growing regions could cause difficulties for a number of winegrowers. However, it is not yet clear that consumers will have to dig deeper into their pockets when it comes to wine: “The laws on the free market suggest that prices are rising. But we are not an island: the price pressure in the industry is intense,” said Frank Schulz from the German Wine Institute (DWI).

In trade, German winemakers competed with winegrowers from all over the world. It is therefore difficult for the affected companies to actually recoup the higher prices that they would theoretically have to charge.

The night frosts occurred at the end of April. Previously, relatively mild temperatures had ensured that the vines had already sprouted in many regions. In this phase, however, the flowers are sensitive to frost.

What was special was that the frost not only occurred on the ground, but also in layers of air at plant height, which are usually less affected. The German Winegrowers Association, but also many regional winegrowers’ representatives, reported damage and feared loss of yield in the following days.

Allianz expert: Hundreds of companies will not survive

The claims manager at Allianz Agrar-Plantversicherung, Martin Heiß, sees some winegrowers facing major difficulties due to the frost: “Especially the uninsured businesses – often those that sell their wine to cooperatives – have a problem. There will be a significant structural break “, he said. “Hundreds of businesses will not survive.”

According to the Federal Statistical Office, there were around 16,400 wine-growing businesses in Germany last year. According to the Allianz, the damage pattern looks very different across the country: “We assume that in the wine-growing regions in eastern Germany, 90 to 100 percent of the vineyard area is significantly damaged,” said Heiß. Although these growing areas are smaller, the situation is similar in Franconia and on the Moselle. “The damage there is very, very severe. We are generally talking about more than 50 percent loss of yield.”

Things don’t look quite so bad in Germany’s largest wine-growing regions, Rheinhessen and Palatinate. South Baden and the Lake Constance region, for example, got off lightly, reported Heiß. Schulz from the DWI confirmed that although some regions and companies were badly hit by frost, the largest growing areas were largely spared. He therefore does not expect the damage to have an extreme impact on the price. Many winemakers would also open up other sources of sales – for example through more tourism.

The insurance company Vereinigte Hagel recently estimated the Germany-wide damage to vines and fruit caused by frost and hail at more than 500 million euros. According to Allianz Agrar boss Alexander Lührig, the amount of damage caused can only be reliably quantified shortly before the harvest. Just over half of the winegrowers insured with Allianz have already reported damage. “The amount of damage will be in the low double-digit million range. Anything else would surprise me.”

Rising wine prices

According to DWI information, the situation on the German wine market is already tense. Also because of the loss of purchasing power caused by inflation, consumers in 2023 will more often turn to cheaper wine from abroad. The price for domestic wines in food retailers rose by an average of 31 cents to 4.51 euros per liter – and thus more than that of their international counterparts. The Wine Institute cited higher operating costs as the reason for the increases in 2023. Therefore, certain price increases cannot be avoided this year, said Schulz.

Source: Stern

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