From tractors to tanks, the price of winemaking equipment is skyrocketing

nprecedented price increases for raw materials and energy are sending shock waves across the wine industry.

In a letter sent to the government on 12 April, France’s national federation for service companies and agricultural equipment distribution (SEDIMA) and the French association of industrial businesses in the agricultural equipment and agri-environment sector (Axema) anticipate a sharp decline in sales that will disrupt agricultural production.

“Prices of raw materials have risen dramatically since 24 February. Steel sheets from Northern Europe were trading at 680 euros per ton in January 2021 and are now reaching prices of 1,800 euros per ton, with peaks of 2,200 euros”, say the chairmen of the two organisations. Suppliers to manufacturers, who are also dependent on highly disrupted supply chains, are no longer able to guarantee prices and lead times, and are applying price increases without notice to their customers, who in turn are forced to pass on all or part of the increase.

As their cash flow is critical, equipment manufacturers have no alternative but to pass on further increases, following on from the 10 to 15% rises already applied last year.

Also, they are seeing a worsening of supply challenges. “Delivery times for agricultural machinery have increased by an average of 11 weeks compared to normal.”

Winery construction projects have also been affected. “The crisis is affecting the materials used in winemaking projects – steel, stainless steel, concrete and wood”, says Roman Tournier of the Ingévin design consultancy. Building a winery costs winegrowers 20 to 25% more than before.