The recent night frost has drastic consequences for the wine harvest. The insurance company “United Hagel” estimates the damage in wine and fruit-growing regions throughout Germany to be more than 500 million euros.
Since last Sunday, night frosts of up to minus 2.5 degrees have caused serious damage in wine-growing regions. The current frost events are so devastating for the 2024 vintage because the vegetation has already significantly advanced after the last record-breaking months, according to the German Viticulture Association. The young, fertile shoots are now freezing and new growth may not be fertile.
This means that with the same level of vine care, winegrowers expect lower yields or even loss of yield throughout the year. Any regrowth also means that two or more development stages can be found on one vine – an extreme additional effort for the winegrowers.
Insurance company “United Hagel” expects it to be high Millions in damage
The extent of the damage also varies greatly locally. Sometimes just a few meters of altitude make a difference. However, some regions are reporting extreme damage, says Klaus Schneider, President of the German Winegrowers Association (DWV). “We expect that the full extent of the damage will only become apparent on the vines in the next few days. After the insurance damage assessors, for example, have gotten a comprehensive picture, we can also make reliable statements about the nationwide damage. We expect this at the beginning of May “, adds Schneider.
The insurance company “United Hagel” states: “The cold snap this week affected the vines and orchards. According to preliminary estimates, the total damage across Germany is expected to amount to more than 500 million euros.” However, the use of frost protection candles in the vines hardly helped this time, winemakers reported to the insurance company. The reason is that the air was correspondingly cold this year even at a height of two meters and it was not just the ground frost that occurred. It is therefore already clear that a particularly low harvest volume can be expected in 2024, even with regenerating vines.
The risk of frost events is increasing overall, although global warming would at first glance suggest otherwise, reports “United Hagel”. Even though the insurance rate against frost has risen sharply in recent years, many companies have not yet taken out a policy. Hedging against the financial risks of weather hazards will therefore continue to increase in importance. Multi-risk insurance will increasingly become the decisive instrument of operational risk management. “However, in the long term this will only be sustainable and economically viable for the companies if the state makes a permanent financial contribution to it, as is the case in almost all countries in the European Union,” says the “United Hagel”.
Damage in the Wine-growing regions
A previous overview of the damage to German wine-growing regions can be found at the German Wine Institute. In Baden there are winemakers in the Enzkreis particularly hit. The Franconian Winegrowers Association estimates that 50 percent of the areas throughout Franconia have been damaged, although to varying degrees. At the There was massive damage on the Hessian Bergstrasse, especially in the Groß-Umstadt area. The frosty nights have also left their mark on the Moselle: the Rheingau Winegrowers Association said it would only be possible to say exactly how big the failures are in a few days.
The Saale-Unstrut wine growing association is also concerned about the harvest. The Saxony Wine Growers Association is already assuming massive crop damage with losses of 90 to 100 percent. Fires to protect against frost in the vineyards did not achieve the desired effect where they were used at temperatures as low as minus five degrees. Local or large-scale frost damage has also been reported in the remaining 13 German growing regions, although this cannot yet be precisely quantified.
Wine consumption has fallen
Overall, wine consumption in Germany is declining: In the last wine year, Germans once again consumed around one less bottle of wine per person than in the previous year. The German Wine Institute (DWI) announced this based on the current wine consumption balance, which refers to the twelve-month period from August 1st, 2022 to July 31st, 2023. According to this, wine consumption in relation to the total population fell from 19.9 to 19.2 liters per person compared to the same period last year. If you only include those over 16 who are legally allowed to drink wine in the statistics, wine consumption per person has fallen by a full liter from 23.6 to 22.5 liters per year.
Wine exports increased
Yields in 2023 varied greatly, both regionally and individually, depending on the variety of grape varieties and the distribution of precipitation. At an estimated 8.8 million hectoliters, the nationwide harvest volume is at the level of the long-term average and three percent below the previous year’s result, reports the German Wine Institute.
The positive performance in German wine exports continued in 2023 for the third time in a row. According to the German Wine Institute (DWI), the average price that producers received for a liter of wine abroad rose again by 20 cents to 3.35 euros compared to the previous high from the previous year. This is the average ex-farm price, which is subject to surcharges in the individual export markets due to taxes and sales margins.
With the higher average revenue, the total value of German wine exports also increased in 2023 compared to the previous year. However, the increase in value of four percent to 384 million euros was offset by a slight decline in export volume of two percent to 1.15 million hectoliters.
Wine companies on the stock exchange
Hawesko Holding SE is a listed trading company for wines, champagne and spirits based in Hamburg. Hawesko is the abbreviation for Hanseatic Wine and Sekt-Kontor. Constellation Brands is the largest wine producer in the world. The Australian beverage company Treasury Wine Estates is active in grape cultivation and procurement. The South American wine producer Concha y Toro owns vineyards in Chile, Argentina and the USA. The Spanish group Baron de Ley is an association of different Rioja estates. The Laurent-Perrier champagne house produces various brands in the middle and upper price segments.