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Spain's Wine Exports Soar 22 Percent — But Profits Fall

Spain is exporting record amounts of wine. Earlier this year, Spain's King Felipe VI, center, and Queen Letizia toasted with Freixenet president Josep Lluis Bonet during a visit to the winemaker's headquarters in Sant Sadurni d'Anoia, Spain.

Spain's wine industry had a record year in 2014, posting numbers that could propel it past Italy as the world's biggest wine exporter. Annual results have not yet been reported in Italy, which was the top exporter last year.

The growth is due to a bumper crop at Spain's vineyards in 2013 that allowed it to surpass France in the export rankings. But a Spanish industry group says that despite 22 percent annual growth in exports compared with 2013, Spain's overall wine profits fell 2 percent in the same span.

From Madrid, Lauren Frayer reports:

"Spain exported nearly 2.3 billion liters of wine last year. Most of that went to its competitor France, as well as Germany, Portugal and Russia.
"But while wine exports here are up, profits are down. That's because Spain exports the majority of its wine — 55 percent — in bulk, cheaply, without bottling it. While France buys Spanish wine, it still makes more money exporting its own."

Some of the wine being exported from France actually originates in Spain, an industry insider tells media outlet The Local.

Nairy Chaglasyan, a regional manager for huge wine exporter J García Carrión, tells The Local, "France has been buying wine in bulk from Spain for years to bottle and sell as its own, (with an EU denomination) or not clearly identifying the origin."

As for the drop in profits, The Local explains the slump by noting that in 2014, the average price for bulk wine from Spain was 40 cents per liter, compared to 60 cents one year earlier.

In the U.S. market, sales of imported wine remain fixated on Italy and France, according to industry group the Spanish Observatory of the Wine Market.

The group recently reported that out of every $1,000 spent on wine in the U.S., only $64 went toward Spanish wine, compared with $316 for Italian wine and $282 for French wine.

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