Author: World Bulk Wine Exhibition
After a consecutive run of short harvests and depleted carryover stocks, Spain’s bulk wine industry appeared to have broken free from the gravitational pull of low prices. That was until geopolitical uncertainty, declining global consumption and soaring prices brought reality crashing back. David Martin, head of Ciatti’s Spanish office in Madrid, describes the country’s latest campaign as a “controversial-turned- nightmare year”.
Ignore the sobering realities of the international wine market at your peril. Spain may well remain the world’s largest supplier of bulk wine; this year’s campaign has demonstrated that the balance of power is no longer in producers’ hands.
The seeds of the current campaign were sown the previous year, when low inventories and another short crop prompted Spanish producers to push prices sharply higher following the 2024 vintage. “The campaign became a mind game”, recalls David Martin. As the months passed, buying panic drove prices to a peak in June 2025. Inevitably, the same dynamic carried over into the 2025-2026 campaign, after another of the shortest harvests in recent years.
“Alarm bells began ringing across the country, especially in the La Mancha region. The feeling was that there wouldn’t be enough wine to go around. Carryover stocks were limited and export values remained high, albeit on lower volumes due to reduced availability”.
Even before they became wine, grape prices for the 2025 harvest surged by 20 to 25% with white varietals leading the charge. “As soon as co-operatives realised grape prices would rise they immediately began asking more for wine, effectively launching the campaign at levels comparable to the June 2025 peak”. Generic whites, along with reds, traded at between 52 and 55 euros per hectolitre, fuelling frustration among buyers and ultimately triggering a market-wide stand-off. “Buyers were reluctant to pay high prices for three years in a row for a category that had traditionally been easy and inexpensive – suddenly, it had become difficult and expensive”.
False assumptions
Pushing back against rising prices, buyers initially limited themselves to covering immediate needs, contracting wines from October to December. Yet the customary Christmas lull soon stretched well beyond the festive season, extending into January, February, March and even April. “A few contracts were signed by buyers who consistently source Spanish wines in order to secure volumes, but from December onwards, the market collapsed”, recalls Martin.
Traditionally, 40 to 60% of Spanish bulk wine volumes are marketed from the pre-harvest period through to Christmas. By late 2025, however, even those volumes had fallen short of normal levels. “Producers were aiming to secure better prices for growers. With another short harvest, they were confident that the remaining volumes could be sold gradually throughout the year”.
The global economic backdrop and weakening wine consumption, internationally and domestically, soon proved them wrong. By March, prices had begun to soften marginally and terms became more flexible, yet demand still failed to materialise. “In April, people started to get nervous because it was not normal to see no contracts and no major buyers in the market for four consecutive months”. As pressure built, asking prices fell from their €55 highs to around €45 per hectolitre, slipping further in May. And yet the phones remained silent.
“Buyers are sitting tight because they know suppliers will eventually become, not nervous, but desperate and start accepting almost any deal. In May and June, and particularly in July, we expect some contracting because buyers still need to bottle. But purchases may be smaller, with buyers holding off until August for the lowest offers”. For suppliers, it has become a brutal lesson in market economics. “What began as a controversial year is turning into a nightmare for some growers who believed they would secure good prices for their product at the start of the campaign. Now those prices will not even cover the cost of the grapes they paid for earlier in the season”.
The global substitution effect
The difficulties facing the Spanish bulk wine industry offer a textbook example of the fluid dynamics shaping the global bulk wine market. Demand, while subdued, did not disappear this year – it simply shifted towards alternative supplier countries. “Import figures from Chile into Spain were huge this year compared with previous campaigns”, confirms Martin. “Large volumes of overseas wines entered the Spanish market, including for Spanish buyers themselves. Some of the country’s biggest bottlers, which supply multiple international markets, appear to have turned abroad for sourcing. I suspect the same has happened in markets such as Germany. In my view, demand is being met by third countries”. Bulk wine requirements themselves have also come under pressure: “The war and other issues are slowing trade internationally”, agrees Martin. “Loading schedules were slower than usual, especially for sparkling base wines destined for German, French and other buyers”.
With European producer countries currently offering competitively priced bulk wines, the Spanish broker believes the recent shift towards South American sourcing – including Argentina for concentrate – is likely to prove temporary. “Once the Spanish market returns to normal, which I believe is happening now and should continue next year, there will be very little room for Argentina and Chile to remain competitive. If Spanish wines return to between 42 and 48 euros per hectolitre, compared with €28 plus €17 in transport costs for, say, Argentine wines, it is simply not worth the hassle for European buyers just to save a few cents. Depending on price levels in Spain, they will either represent a threat – or they won’t”.
The market’s attention is now turning to this year’s harvest. Following generous winter and spring rainfall, vineyard conditions across Spain currently appear promising. “I anticipate a very good season, although temperatures over the summer months will ultimately be decisive. If they soar to 38°C, 42°C or even 45°C as they have in recent years, the impact on production could be substantial”. While take-up under Spain’s state-backed green harvesting programme appears to have remained relatively limited this year, Martin believes the era of bumper harvests may now be over. “The huge crops we saw five or six years ago – around 48 million hectolitres nationally – are unlikely to happen again. A significant amount of vineyards have been uprooted and some replanted with pistachio or olive trees. If we did have a very large crop, I don’t know where we would put the wine”.
Credit: glass of wine and lights
Glass ceiling
The ongoing downsizing of Europe’s vineyards does not necessarily bode well for the Spanish bulk wine industry, either in terms of volume or value. “French buyers have traditionally relied on Spanish wines to achieve competitive price points for products such as lower-end bag-in-box wines. But over the past couple of years, that demand has weakened noticeably, and that is concerning for us”.
The contraction in global wine consumption has, at least temporarily, upended the assumption that lower volumes automatically command a premium. Spain’s dependence on traditional European producer markets for its bulk wine exports has also imposed something of a glass ceiling on its value ambitions. “Spanish wine will remain more competitively priced than French or Italian wine because our natural markets will always be Germany, France, Italy and the rest of Europe. We still struggle to sell large volumes globally. Only in a scenario where wine consumption was growing everywhere could Spanish wines reach pricing levels comparable to those of France or Italy”. For now, however, buyers are likely to encounter highly competitive offers coming out of Spain.
“Many buyers will be taking advantage of this situation, probably covering their needs with 2025 wines through to the end of the year and into 2027. That could lead to slower trading for new wines and softer grape prices. Then again,” Martin concludes, “I don’t have a crystal ball – and hopefully my predictions are wrong.”
