Italy’s wine industry is facing a critical juncture as the Unione Italiana Vini (UIV) sounds the alarm over a growing imbalance between supply and demand, threatening a potential price collapse.
With a normal harvest, producers warn of a surplus reaching 90 million hectoliters in cellars by this autumn—the equivalent of nearly two full harvests—risking a negative balance of half a billion euros between 2025 and 2024. The crisis is compounded by declining global consumption and the looming threat of international trade tariffs.
In response, Lamberto Frescobaldi, the newly re-elected president of Unione Italiana Vini (UIV)—an association representing over 800 members and 85% of Italy’s wine exports—has called for urgent and profound structural reforms, including a comprehensive review of Italy’s primary wine law, the Testo Unico del Vino.
“Given the decline in global consumption, we can no longer afford to flood ‘Cantina Italia‘ with 50-million-hectoliter harvests, which has been our production average for the last 25 years,” Frescobaldi stated during the Unione Italiana Vini National Assembly. “Now is the time to launch a plan to revise the Testo Unico del Vino in coherence with the current market situation.” Frescobaldi emphasized that the primary goal is to “innovate the wine ecosystem in a competitive key.”
Market Contraction and Global Headwinds
Data from the Unione Italiana Vini Observatory, presented by coordinator Carlo Flamini, paints a stark picture. The first five months of the year saw significant drops in consumption volumes across Italy’s top four markets: Italy (-1.8%), the United States (-4.7%), the United Kingdom (-3%), and Germany (-9.6%). These markets collectively account for 73% of Italian wine companies’ turnover. Overall retail sales have contracted by 3.4%, with still and semi-sparkling wines hit hardest at -5.3%.
Compounding the issue are significant trade barriers. UIV Secretary General Paolo Castelletti highlighted the particular threat of potential 10% tariffs in the United States, a market that accounts for 24% of Italy’s wine exports, valued at €1.94 billion in 2024. “Even with 10% tariffs, it will be a problem for the sector,” Castelletti warned. “An industry survey estimates a 10-12% loss in revenue from the US, compounded by a weakening dollar.”
Castelletti stressed the need for a more unified European stance to accelerate free trade agreements. “You can’t talk about ‘diversifying markets’ and then hesitate on important choices like Mercosur. If it’s complex to access a receptive market like the U.S. with a 10% tariff, how can we export to complex markets like Brazil or India, which have tariffs of 27% and 150%, respectively?”
Financial Health and Industry Response
A new report from Mediobanca confirms the financial strain, noting that while the sector remains solidly family-owned (65% of net assets), profitability is declining. The industry’s consolidated EBIT margin fell to 6.2% in 2023, and its return on investment (ROI) sits at 5.4%, lagging behind the broader food (8%) and beverage (9.9%) sectors. Regionally, Tuscany reports the highest EBIT margin (16.4%), while Abruzzo leads in ROI (7%).
Interviews with top producers revealed that falling consumption (cited by 72%) and tariffs (66%) are their primary concerns. In response, companies are prioritizing opening new markets (77%), investing in human capital (56%), and developing no- and low-alcohol products (50%).
UIV’s Blueprint for Structural Reform
To rebalance the market, UIV is proposing a series of urgent corrective measures:
Lowering Yields: Reduce grape yields per hectare and end exemptions for generic wines.
Revising Denomination Rules: Align the yield limits of disciplinary rules (DOC/DOCG) with the actual production averages of the last five years.
Eliminating Overproduction: Reduce or eliminate the 20% overproduction allowance currently permitted for DOP wines.
Freezing New Plantings: Implement a one-year moratorium on authorizations for new vineyards.
Consolidating Appellations: Overhaul the denomination system. Currently, the top 20 of Italy’s 529 recognized DOC/IGT designations account for 80% of production, meaning hundreds exist only on paper. “We need to resolve this anomaly through a system of consolidation and territorial reorganization,” said Castelletti. “This process should be encouraged and coordinated at the national level.”
The UIV aims to have these updates to the Testo Unico del Vino implemented by 2026, ten years after its initial entry into force, urging a “moment of awareness” across the entire sector to secure the future of one of Italy’s most valuable commercial assets.