Raising the price of wines by 15 to 20 % would offset overhead increases

or several months now, winegrowers have been faced with unprecedented increases in the cost of raw materials. According to a survey carried out by the Loir-et-Cher chamber of agriculture last April among winegrowers in the Centre-Loire Valley area and two distributors in Loir-et-Cher, the price of bottles has risen by 25 to 50%, boxes by 20 to 31%, labels by 20 to 34%, capsules by 11 to 20%, wooden posts by 5 to 15%, galvanised posts by 42 to 52%, and wires by 20 to 93%. In addition to this is the spiralling price of diesel and equipment, to name a few. On 1 May 2022, excluding marketing costs, this increases the production cost per litre of wine by 10% if a winegrower sells in bulk and by 13% if they sell in bottles. But if you include marketing costs and profit margins, which are crucial to businesses’ long term survival, the increase is an average 16%, based on average crop yields of 55 hl/ha. “With such a sharp increase in costs, there are two possible options: either I put my prices up by 3 to 5% and I dip into my profit margins; or I charge 15 to 20% more, but then I don’t know how my customers will react. What is your opinion?” Michel Badier, head of winegrowing at the Loir-et-Cher chamber of agriculture, asked winegrowers who took part in a dedicated webinar.

Denis Carretier, a winegrower in the Hérault area of Southern France and chairman of the Occitanie chamber of agriculture, reacted: “With the economic situation as it is currently, there is no room for such significant price increases. Wine is not considered a staple. (...) At the moment, consumers are reacting by buying as cheaply as possible because the price of everything is increasing”. His viewpoint was shared by a female wine grower: “A 16% increase is too much! At every event organised by the wine industry, there is a big drop in attendance and the average spend is falling. It is difficult to pass on prices increases when attendance is lacking and customer feedback is not positive”.