Excessive inventories, widespread product downgrading, and the resulting price pressures are severely eroding the economic value of the Italian wine sector, the Italian Wine Union (UIV) said during its general assembly in Rome.
Addressing the assembly, UIV president Lamberto Frescobaldi called for immediate, decisive action.
“Better a bad decision than no decision at all,” Frescobaldi stated. “Under current market conditions, even a harvest of 44 million hectolitres is unsustainable.”
Frescobaldi urged the industry to embrace its responsibility by making difficult choices to cut production.
He argued that the cost of inaction is far higher than the cost of market-rebalancing interventions, as persistent overproduction continues to depress value and profitability across the entire supply chain.
“We must protect a sector that contributes 1.1% to Italy’s GDP and contributes significantly not only to the trade balance [€7.2 billion], but also to the richness of the territories and the protection of the landscape.”
‘Rationalise The Sector’
Elaborating on the crisis, secretary general Paolo Castelletti highlighted, “We need to modernise our regulatory framework to rationalise the sector – production must be planned according to market realities.”
According to UIV Observatory findings, despite three smaller harvests between 2023 and 2025, cellar stocks exceeded 53 million hectolitres in May 2026 – a 7.3% increase over the previous May and equivalent to ‘an entire harvest sitting in the cellar’, marking the highest level of stocks since 2022.
This inventory surplus, combined with stagnating domestic consumption (down 2% in retail for January-May 2026) and declining international exports (down 4% in volume and 8.3% in value for the first quarter of 2026), is forcing wineries to downgrade their products.
This ‘damage control’ strategy involves reclassifying higher-tier wines (DOCG, DOC) into lower categories (IGT, common wine) to make them more marketable.
Consequently, bulk wine prices plummeted during the first five months of 2026, dropping by 6% for PDO, 7% for PGI, and 14.4% for ordinary wines.
Secretary general Castelletti concluded that “wineries are currently downgrading one in five bottles,” which risks triggering a snowball effect in devaluation.
The UIV calculates that this oversupply has already eroded over €500 million in potential annual value – a loss of roughly 11% of the initial market value for PDO and PGI wines.
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