Climate, purchasing power, geopolitics… the reasons behind the global decline in wine

Purchases of wines have dropped to 208 million hectoliters (mhl), according to the annual report of the intergovernmental organization. Since 2018, global consumption has decreased by 14%.

Of the top ten wine markets, only Portugal saw an increase in demand last year, driven by domestic consumption. Behind this trend are structural changes related to new preferences and consumption patterns, but also since Covid a pressure on purchasing power and increased costs and prices.

Three countries in particular have fueled this decline: United States, France, China. The United States, the world’s top market long considered “growing and resilient,” is slowing down, with a -4.3% drop to 31.9 mhl in 2025. The OIV sees “a combination of economic and behavioral reasons”: less alcohol consumption among young people, diversification in beverage choices, price sensitivity, constrained purchasing power…

The impact of tariffs imposed by Donald Trump is still difficult to isolate amid all these factors, notes John Barker, the director of the OIV.

These tariff measures, combined with the euro/dollar parity, have affected trade, he says: however, while “we have seen the American market decrease in volume, in value somewhat, not so much.”

“Seizing the moment”

As the top consumer country in the EU, France continues a decline that began decades ago, notes the OIV, with a -3.2% decrease (22 mhl) last year. The EU (48% of global consumption) also sees Italy retract (-9.4%, to 20.2 mhl), along with Germany, Spain… Outside the EU, the UK is declining, along with Russia, Switzerland… Brazil and Japan are among the few to consume more.

Lastly, China, once the 6th largest consumer in 2020, is continuously reducing its purchases since 2018: down to 4.8 mhl in 2025, a -13% drop in a year, -61% since 2020.

Chinese demand “is particularly sensitive to income and price changes,” notes the OIV, which also points out that it is transforming, less tied to formal occasions, more varied.

Overall, can this decline continue? “Economic factors are really important,” and have been very prevalent post-Covid, notes Mr. Barker, although “societal changes are difficult to gauge.”

For him, the situation is hardly comparable to the wine consumption level of 1957, as the wine consumption model has shifted from “volume-driven” to a value-based and “premiumization” model.

According to Ananda Roy, vice president of Circana, the decline in consumption in Europe and the United States, besides a lesser interest from young people in alcohol, is due to bottle prices and the rise of innovative beverages.

This market trend specialist, who advises producers and distributors, recommends new formats (smaller bottles, quality wine “cubis”…) as home consumption strengthens, suggesting “reduced calories, sugar, and little or no alcohol,” the famous “no-lo” wines.

He is “optimistic if the sector seizes the moment and innovates beyond the label and bottle shape.” The rise of no-lo wines is not yet accurately measured by the OIV: “probably 1 to 2% of the market,” according to Mr. Barker. “Technology and understanding of this product are developing rapidly,” he acknowledges, also mentioning the growth of sparkling wines, focus on sustainability…

At the same time, global production continues to contract, particularly due to climate vagaries. In 2025, 227 mhl were harvested: more than in 2024, a historically low year (+0.6%), but -9.4% compared to the average of the last five years.

Now, what about a new challenge with the Middle East conflict? “It’s too early to make projections,” notes the official. But “what we can observe with international events affecting trade is that anything impacting the cost of living or transportation has repercussions on the wine market.”

With AFP.