Washington: The drinking habit dies hard. As the global financial crisis deepens, people are opting for low-cost brands of wine instead of giving up drinking altogether, preventing a slump in demand.
According to a study by the United States Department of Agriculture (USDA), global wine sales are unlikely to see a major fall in demand even in times of recession, with the US — the worst-hit in the crisis — projected to emerge as a major beneficiary of liquor export.
“Despite deteriorating global economic conditions, world demand for wine is likely to ease only marginally in 2009 as consumers shift to lower cost brands rather than significantly reducing their consumption,” the USDA report said.
Moreover, the US, the second-largest producer and the fourth-largest exporter of wine, may witness shipment rising by 2%, it said.
“Exports (from the US) are forecast at 4.5 million hectolitres (one hectolitre is one-tenth of a kilolitre), up 2% as a result of continued demand in Canada and reduced competition from the EU and Australia despite a stronger dollar,” it said, adding that low transport cost would provide the US a leg up.
However, shipment from the EU, the largest exporter, may drop by 10% to 17 million hectolitres, contributing in a major way to a 3% decline in overall global wine exports. The shipment from the second-largest exporter, Australia, is expected to remain flat at 7 million hectolitres.
“World wine exports are forecast at 45 million hectolitres in 2009, down 3% from the previous year,” the USDA said.
Global wine production, too, is expected to dip by 5% to 250 million hectolitres in 2009, though huge stock piles will somewhat make up for low output, the report pointed out.
The import of wine is expected to be flat both in the EU and the US, while that in Japan may slip slightly, it said. The EU’s import from the US, mainly bulk wine, is projected to remain firm.