There’s a lot to write about here, but first I have to close the chapter on the 2009 harvest.
As I mentioned in my posts of November 16 and January 20, the Grupo Rioja, the largest winery association in the region, proposed that the maximum yield for grapes be reduced by 10% in the 2010 harvest to bring supply in line with demand. This would ‘eliminate’ about 42 million bottles from future inventories.
The problem in an appellation of origin is that the collective brand (Rioja) is half owned by wineries and half by farmers, with a majority of 75% needed in a vote. In this case, the winery associations and the largest farmers’ union were in favor of the proposal, but not the cooperatives and the smaller farmers’ unions, who control more than 25% of the votes. The pound of flesh that they demanded from the wineries in exchange for approving the reduction in yields and voting in favor of the 10 million euro advertising and promotion plan for Rioja in 2010 was to allow an extra 10% of grapes to be vinified in the 2009 harvest. 5% would be a reserve to allow wineries and coops to choose the ‘best’ wines made to be classified as Rioja, rejecting the worst 5%, which would be sent to a distillery to be made into alcohol. The remaining 5% could be sold as table wine (not Rioja). This amounts to about 15 million liters, equivalent to 22,5 million bottles of wine.
This represents an unfortunate step backwards for Rioja, because before the crisis hit, wineries and growers had reached an agreement to progressively eliminate the excess production which was historically sold as table wine, which in recent years competed directly with young Rioja in the Spanish market.
It was, however, the best decision under the circumstances, because it was necessary to roll out 2010 advertising and promotional activities as soon as possible.
The doubt I have is where the 15 million liters of table wine will be sold. There are plenty of emerging markets such as Russia and Eastern Europe where there’s demand for inexpensive table wines that won’t compete directly with Rioja. What I’m afraid of however, is that most of it will find its way to supermarkets in Spain, as in the past.