Spain boasts the largest wine production area in the world and is the third wine producer in volume after France and Italy.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: SP1208
Spain Wine Standing Report
Robert Hanson, Agricultural Attaché
Diogo Machado Mendes, Agricultural Specialist
Spain boasts the largest wine production area in the world and is the third wine producer in volume after
France and Italy. Wine production for 2012 is estimated to be very close to the previous year levels at
34.4 Mhl. Wine imports are projected to remain constant in 2012 at 420,000 hectoliters with the third
country origin share to slightly fall to 17,000 hectoliters. Exports are projected to continue growing in
2012 and reach 23 Mhl of which 9 Mhl destined to countries outside the EU.
The following report is a Voluntary GAIN report on the wine industry and market in Portugal. This
report complements the EU-27 Annual Wine Report. The data below is shared to help characterize
the Spanish industry and market ? none of the figures are official USDA data.
Spain has the largest wine production area in the world and is the third wine producer in volume after
France and Italy. Wine production for CY2012 is estimated to be very close to the previous year levels
at 34.4 Mhl. Beginning in 2008/09, the EU targeted an area of 175,000 hectares of vineyards in
producing Member States to be uprooted over a three-year period, and allocated a budget of ?1,074
million for the program. Subsequently, Spain has reduced its overall wine area as part of this voluntary
program known as the ?grubbing-up scheme? by removing less productive vineyards. The EU
Commission estimates that after the three year period of duration of the grubbing-up scheme, Spain will
have decreased its wine growing area by 8.5 percent from an initial 1,100,000 ha. This 94,000 ha
reduction in area is equivalent to 2.5 percent of all EU-27 wine growing area. In terms of production
reduction this is estimated to reach 4.5 Mhl corresponding to 11 percent of Spain?s 5-year production
average and 2.6 percent of EU-27 production.
Most wine produced in Spain is either wine with Protected Denomination of Origin (PDO) or wine with
Protected Geographic Indication (PGA) [Fig.1]. Production of Red and Rosé wine passed from 49
percent of the total in CY2009 to 58 percent in CY2011 while production of White wine had an
opposite evolution from 51 percent to 42 percent of total production in the same period of time.
Fig.1 Wine quality production share in Spain
Source: DG AGRI (MY 2011/12)
Human consumption of wine has been decreasing in the last few years and it is estimated this trend will
continue into 2012. The current annual per capita consumption is 24 liters and the total human
consumption is 10.2 Mhl. Consumption data released by the Ministry of Agriculture, Food and
Environmental Affairs (MAGRAMA) show that the only wine category whose consumption is
increasing is sparkling wines like Cava.
Total domestic use is expected to continue falling after the end of the aid measures related to potable
alcohol-distillation and as producers keep increasing sales of wine to export markets. There continues
to be, however, a market for vinous alcohol, be it for the fortification of generous wines like Jerez, for
the making of brandies, or to export to other Member States. The extent to which alcohol sales will
eventually recover remains to be seen in the coming years.
Wine imports are projected to remain constant in CY2012 at 420,000 hectoliters with the third country
origin share to slightly fall to 17,000 hectoliters. In value terms the major import origins are France,
Italy, Portugal, and Germany. Total wine import value is estimated at 180 million U.S. dollars in 2011.
Exports are projected to continue growing in CY2012 and reach 23 Mhl of which 9 Mhl destined to
countries outside the EU. In value terms the most important destinations for the Spanish wines are
Germany, United Kingdom, United States, and France. Total wine export value is estimated at 3.1
billion U.S. dollars in 2011.
Table 1. Spain Wine Production, Supply and Demand
Wine, Spain CY 2010 CY 2011 CY 2012
Year Begin: Jan 2010 Year Begin: Jan 2011 Year Begin: Jan 2012
Post Estimate Post Projection Post Projection
Beginning Stocks 36,962 36,446 35,446
Production 35,489 34,985 34,370
Intra EU-27 Imports 437 400 401
Extra EU-27 Imports 19 19 19
Total Imports 456 419 420
Total Supply 72,907 71,850 70,236
Intra EU-27 Exports 11,830 13,749 14,000
Extra EU-27 Exports 5,625 7,551 9,000
Total Exports 17,455 21,300 23,000
Human Dom. Consumption 11,044 10,864 10,193
Other Use, Losses 7,962 4,240 2,043
Total Dom. Consumption 19,006 15,104 12,236
Total Use 36,461 36,404 35,236
Ending Stocks 36,446 35,446 35,000
Total Distribution 72,907 71,850 70,236
Source: FAS-Madrid estimates and GTA
From the EU list of eligible measures of support (Council Regulation (EC) No 479/2008) Spain chose to
adopt in its national support program for the period 2008/09 to 2012/13 the following:
Single Payment Scheme and support to vine-growers. This measure started to be applied by
Spain in MY2010. It implies the continuation of this scheme in subsequent years and the
commensurate reduction of funds available for other measures in the national support program.
Promoting wines on third-country markets. Support covers information or promotion measures
concerning Community wines in third countries, thereby improving their competitiveness in
those countries. Eligible wines are those with a protected designation of origin or geographical
indication or wines with an indication of the wine grape variety;
Restructuring and reconversion of vineyards. The objective of this measure is to increase the
competitiveness of wine producers and covers the activities (a) varietal conversion, including by
means of grafting; (b) relocation of vineyards; and (c) improvements to vineyards. It may take
the form of compensation to producers for the loss of revenue due to the implementation of the
measure (up to 100%) or of a contribution to the costs of restructuring and conversion.
Distillation of by-products of winemaking. The amount of aid is fixed by % volume and per hl
of alcohol produced. The alcohol resulting from the supported distillation shall be used
exclusively for industrial or energy purposes so as to avoid distortion of competition;
Potable alcohol-distillation. This is a per hectare aid that can be granted until July 31, 2012 in
the EU but for which Spain chose to accept applications only until MY2009/10. The relevant
contracts concerning the distillation of wine as well as the proofs of delivery for distillation must
be submitted before support is granted;
Crisis distillation to dispose of surplus wine. Support may be granted until July 31, 2012 for
voluntary or obligatory distillation of surplus wine decided upon by the Member State in
justified cases of crisis so as to reduce or eliminate the surplus and at the same time supply
continuity from one harvest to the next. The alcohol resulting from the supported distillation
shall be used exclusively for industrial or energy purposes so as to avoid distortion of
competition. The share of the available budget for this measure shall not exceed 20% in 2009,
15% in 2010, 10% in 2011, and 5% in 2012. Although making part of the national support
program this measure has so far never been activated in Spain.