Prosecco in danger of running out, industry warns

By Arabella Mileham

Published: 20 May, 2015

The boom in cut-price Prosecco in the supermarkets is leading supplier to fear the sparkling Italian drink may be in danger of "running out" in the UK.

The value sales of Prosecco rose 55% in the UK last year, according to data from Nielsen, and a new Wine Intelligence report released showed 95% of consumers that drink Prosecco see it as very good or good value for money.

Speaking to Harpers.co.uk at the London Wine Fair this week, one supplier warned that there may be only two month's worth of supply left in the market until the new harvest comes onstream. She said supermarkets had been fuelling demand by driving down the price, which was putting pressure on the supply and some brands were having to switch supply/

Robin Copestick, managing director of drinks supplier Copestick Murray, told Harpers.co.uk that one of the biggest challenges of the year ahead was supply, specifically of Prosecco. "We need a big harvest this year," he said.

Stefano Girelli of The Wine People said it was difficult to tell how severe the problem was and how much volume is available but despite the speculation across the industry, there was "an element of truth" in it.

"The market has boomed in the UK, in the USA and all over, and when sales are going up in strong double digit figures, it puts a lot of pressure on supply," he said "Promotion are not going to help and too many promotions are not good for long-term brand building. Promotions should be softer and they should be trying to keep the price steady."

He said producers would rush into the next vintage, and it is likely that prices will rise next year due to the laws of supply and demand.

Andrew Shaw, buying director of Bibendum PLB said last year's wet summer had contributed to the problem, with smaller harvest across Italy, but that the biggest problem lay in promotional activity in the supermarkets which had seen Prosecco traded "like half price champagne".

"[The weather] has suppressed volumes and inflated prices, but the main issue has been demand-led due to the pressure on volumes," he told Harpers.co.uk yesterday. "If you look at the UK and US boom, no one forecast the production and although they have increased yields, that won't impact the market till the new harvest at the end of the year."

He added that speculative traders and the structure of the industry had allowed prices to increase, but it was likely to right itself next year.

However he said the warnings were likely to act as a shot across the bows and "take the heat" out of the market.

"If you are a buyer and planning five promotions, it might make you decide to only do two," he said, adding that it might create an opportunity for other sparkling wines, such as Cava or Cremant. "There are other levers that you can pull," he said.

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