Despite its resilience, the Rioja wine region in Spain is contemplating a significant shift in its production strategy by potentially removing vineyards to curb future grape supply. The move stems from concerns about oversupply and the region’s ability to adapt to changing market conditions.
With over 66,000 hectares of productive vineyards, Rioja has long been a symbol of Spanish wine success. While global red wine consumption has been on a decline since peaking in 2004, Rioja has managed to maintain its position, with red wines still comprising 84% of its sales. In 2024, the region even saw a modest 0.6% growth in sales volume, a testament to its ongoing market strength.
However, as demand for red wine continues to stagnate, particularly in Rioja’s largest market, Spain, industry leaders are now considering drastic measures to prevent a looming oversupply. According to José Luis Lapuente, General Manager of the Consejo Regulador de la DOCa Rioja, the region’s wine stock levels exceeded their ideal targets in 2022 and 2023. While efforts have been made to reduce the excess inventory, including a smaller-than-average harvest and actions like distilling wine and conducting a “green harvest” to reduce yields, concerns about the region’s production capacity persist.
In 2023, Rioja’s wine stock stood at 930 million liters, but by the end of 2024, that number dropped to approximately 841 million liters. While Lapuente assures that the reduction is relatively small in the grand scheme of the region’s stock, the need for further intervention is clear. Some local producers have even suggested removing vineyards, a measure previously seen in regions like Bordeaux, France, in response to excess wine supply. Vineyard owners are seeking financial support from the European Union, with requests for €6,000 per hectare to stop production. If this proposal moves forward, between 7,000 and 9,000 hectares of vineyards—roughly 11-14% of the region’s total area—could be removed.
This potential reduction in vineyard area would return Rioja’s size to levels similar to those of the early 2000s, after decades of significant growth. However, critics argue that the region has expanded too quickly, particularly in areas like Rioja Oriental, formerly Rioja Baja, where much of the new planting has occurred.
Lapuente emphasizes that controlling production is necessary to maintain balance. Despite reducing stock to a more desirable level of around three years’ worth of inventory, projections for Rioja’s future sales are far from optimistic. Sales in 2024 were approximately 240 million liters, with KPMG’s 2021 forecast of 313 million liters looking increasingly unrealistic. Rioja’s largest market, domestic sales in Spain, saw a decline of almost 2% in volume in 2024, as consumer habits shift towards white wine and other beverages, coupled with a general reduction in alcohol consumption.
Lapuente remains cautious about the future, noting that price increases, driven by rising raw material and labor costs, coupled with the impact of tariffs, particularly the 25% duty on Spanish wine imposed by the U.S., will add additional challenges for Rioja producers. As a result, the region is adopting a “realistic and conservative” approach to its future market size and production capacity.
In this uncertain environment, the potential reduction of vineyard areas in Rioja stands as a necessary step to safeguard the region’s long-term sustainability.
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