"We are facing a perfect storm"

Prof. Dr. Simone Loose, head of the Institute for Wine and Beverage Management at the Geisenheim University of Applied Sciences, reports in an interview with the editors of wein.plus on the major economic problems currently facing many German wineries.

Many wine-producing businesses are currently not profitable and therefore cannot work in an ecologically or socially sustainable way, Loose explained in an interview with wein.plus editors Alexander Lupersböck and Uwe Kauss: "These wineries do not generate enough income for the family and no return on the capital invested."

The German wine industry is "like an iceberg": "We mainly only talk about the visible part of the top, i.e. the successful wineries. Among them, there are many businesses that would not survive without a sideline or other sources of income," reported the professor of business administration for the wine and beverage sector. Rising interest rates, doubled material costs, an ever greater shortage of labour and rising personnel costs combined with stagnating revenues are creating "a perfect storm" for her as a result: "Even now, every second business in the wine industry can't fill all the vacancies, and seasonal workers in particular are lacking everywhere."

"Many winegrowers don't want to calculate what they really earn"

This will lead in the future to massive pressure for further mechanisation of vineyards. However, the wineries would first have to earn the necessary investments. But this is becoming increasingly difficult: "The situation in the sector was already unstable before and is characterised by decades of structural change," emphasises Simone Loose. The situation is aggravated because not all winegrowers think economically: "Many don't want to calculate what they really earn

Internationally, the demand for wine is currently declining. "Depending on the year, there are about ten million hectolitres of wine too much in the world, which puts pressure on global prices. To put it casually: Wine in the volume of the entire German harvest is superfluous," reports the industry expert. This also threatens the existence of German winegrowers: "In the lower price segment, you cannot produce even cheaper in Germany. These producers are in danger of breaking away."

"Premium is occupied in Germany"

But even the producers of premium wines would often feel the crisis clearly: "In Germany, according to surveys, about 30 per cent of households currently have no money left at the end of the month. If they pay double for energy, they have to save the amount elsewhere." Wealthy households would continue to buy good wine, but the premium segment has long been occupied in Germany: "Making a name for yourself there as an up-and-comer is very difficult today - although not impossible. But it is an illusion to believe that there is enough room for all German producers in the premium segment." At the moment, wineries would still have the best chances in export, as German white wines enjoy an increasingly good reputation abroad.

For Loose, climate change, which has long since become noticeable in Germany as well, is further exacerbating the crisis: "As a result, we are mainly registering declining yields per hectare - and need in the future more and more irrigation systems. Who will pay for their purchase and operation? Who will build the necessary infrastructure? These costs will be difficult to pass on to the wineries."

As a result, "I don't think we will be able to maintain all the vineyards we still have today in the next ten years," she says, describing the change. "Hand-worked steep slopes and small terraces are the first to be abandoned. Most of them can no longer be farmed to cover costs - with the exception of a few icons." She sees a possible way out in a structural change in German wine production: "A stronger division of labour into efficient grape producers and excellent marketers, as we already know from many other countries, would help us."

But the necessary changes posed major problems for many owner-families of wineries. Prof. Loose knows that often no one can continue to run an outdated winery that needs a lot of investment: "Such changes are damn hard for the owners. You have invested your whole life in the business that you took over from your parents and to which you feel committed. You don't just give up on something like that. Often the hard break happens only when none of the children wants to take over."