February 16, 2010 / 3:17 PM / 8 years ago

Tuscan winemakers see crisis, rivals draining 2010

<p>Bottles of Brunello di Montalcino red wine are displayed at a wine shop in the Tuscan town of Montalcino in central Italy in this September 22, 2004 file photo.Max Rossi/Files</p>

MONTEPULCIANO, Italy (Reuters Life!) - The lingering impact of the global economic downturn and fierce competition from "New World" wines may drain consumer thirst for top-shelf full-body Tuscan reds this year, the region's winemakers said.

Italy is the world's second-biggest wine producer after France, but its export sales have come under pressure in the past few years as rivals from the United States, Chile, Argentina, South Africa and Australia conquer global markets.

The 2010 outlook is foggy after a difficult 2009 when, because of the global economic crisis, some Tuscan producers cut prices, and margins, to win back consumers, winemakers from nearby Tuscan townships of Montepulciano and Montalcino said.

"I don't think the crisis is over. I think the difficult period is going to last, but I don't know how much longer," Federico Carletti, chairman of the consortium representing producers of Rosso and Nobile di Montepulciano, told Reuters.

"There is too much wine around ... There is a lot of wine coming from Chile, Argentina, from all over the world," he said.

In 2009, sales of the premium red Nobile di Montepulciano returned to pre-crisis levels of just over 8 million bottles after a dip to 7 million in 2008, while Rosso sales were little changed at around 2.5 million bottles, according to data from Consorzio del Vino Nobile di Montepulciano.

But robust sales came after some bottlers slashed prices by as much as 40-50 percent, Carletti said.

Nobile is priced at between 12 and 40 euros a bottle on average in Italian wine shops, while Rosso sells for around 10 euros. Their famous cousin Brunello di Montalcino fetches 25-50 euros a bottle on average in Italy.

But many winemakers who gathered in the medieval town of Montepulciano to present wines they will be putting on sale this year said premium wine producers should promote the distinctive quality of their reds instead of cutting prices which can be seen as a sign of lowering standards.

"It is impossible to win price battle. Quality cannot come at a low price," said Patrizia Crociani, commercial manager at Saiagricola, a farming arm of Italian insurer Fondiaria-SAI, which owns top local winemakers Fattoria del Cerro.

EYES ON U.S. MARKET

Carletti said consumer demand would pick up slowly. But the U.S. market, a top destination for Italian wines, was likely to be first to take off and would power recovery in other markets.

"The United States is a very natural market for us. There is a strong Italian-origin community, lots of Italian restaurants there," he said.

Makers of rich Brunello reds pin sales growth hopes on recovery of the U.S. market which absorbs 25 percent of their output and was hit by weak demand in 2009, Stefano Campatelli, director of Consorzio del Vino di Brunello di Montalcino, said.

"We hope 2010 will be better. We are putting on sale two very good vintages: 2005 and 2004 ... But it is too early for forecasts," Campatelli told Reuters by telephone.

Brunello total sales rose to 7.2 million bottles in 2009 from 6.8 million bottles in 2008, Campatelli said adding that "there could have been some price cuts."

Makers of Chianti Classico reds, whose trademark black rooster is famous around the world, hope euro's weakening against the dollar would help boost sales on the U.S. market which accounts for 28 percent of their sales.

Chianti Classico overall sales dropped by 15 percent, or by 6.0-6.5 million bottles in 2009, but sales have picked up slightly in the last month of 2009 and early this year, said Giuseppe Liberatore, director of Consorzio Vino Chianti Classico.

STRONG VINTAGE

Tuscan reds of 2009 -- some of which will go on sale in a couple of months -- are likely to get a four- or five-star rating by experts in a series of presentations to sector operators and journalists across the region this week, winemakers said.

A combination of hot days and chilly nights have helped to grow healthy grapes with high sugar content in big quantities, they said.

Brunello's Campatelli was cautious saying the vintage was close to but not yet at the top five-star level. But Chianti and Montepulciano makers were more optimistic.

"2009 was an exceptionally good vintage ... I'd give it five stars," said Andrea Contucci whose family has been making wine in Montepulciano for the past 500 years.

Reporting by Svetlana Kovalyova, editing by Paul Casciato

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