A shortage of glass, and the price rises that this has sparked, are creating huge problems for wineries and their customers. But as Graham Holter reports, the issues aren’t just about bottles
There are plenty of challenges facing the global wine trade so perhaps one more won’t matter. But a shortage of glass bottles creates a pretty fundamental problem, and it’s one that’s beginning to bite.
All UK importers seem to be affected to some degree. Most of the problems are centred on Europe, but South American orders have also been disrupted. Soaring energy prices and supply-chain logjams have been blamed.
Whatever the root cause, the bottle shortage is creating unwelcome delays and additional costs for a worldwide industry that’s still trying to re-assemble itself after two chaotic years of Covid.
“Many producers are struggling to obtain glass – we have had three shipments of core lines held up for this reason,” says Doug Wregg of Les Caves de Pyrene.
Nicholas Moschi, director of buying at Liberty Wines, adds: “Clear glass and bottles with non-standard shapes, sizes and attributes [including traditional Provence bottles] have been hard to obtain. In the last few weeks even more standard bottles have been hard to find.
“Europe is most affected. Within Europe, we have seen that Italy has been severely affected. Orders have been delayed while waiting for the bottles to arrive.”
Flint Wines director Jason Haynes reports similar problems. “When we were in Burgundy three weeks ago, quite a few growers told us how they had placed their orders for bottles months ago, had received confirmation that their orders had been received – but had been told that there was no guarantee they would actually get them.”
Even when we have requested the bottles in advance we have found that the stock is not there for us when we need it, incurring costs and causing disruption
Enotria&Coe is finding it’s a struggle to obtain glass “at every level of supply volume”, according to managing director Sam Thackeray. “Some producers have been forced to discontinue alternative bottle formats, such as half-bottles, or to withdraw them from certain markets,” he says.
“Supply is being disrupted, and it’s ongoing. Delays are inevitable in both manufacture and production.”
Marcato Direct is an Italian specialist. “Sourcing glass bottles has become a big problem which has meant us ordering our bottles months and months in advance so that we can secure the stock,” says director Rebecca Skeels. “Even when we have requested the stock in advance we have found that the stock is not there for us when we need it.
“Booking your bottling slot in advance, and then discovering you have no bottles, incurs costs and causes disruption with our supply.”
Condor Wines is a South American wine specialist and can confirm that the problems go beyond Europe. “There has been a shortage of clear glass,” says owner Lee Evans.
“It’s meant we’ve had to bottle some white wines in green glass temporarily and we’ve not been able to ship some rosado wines, which don’t work in green glass, and we decided to wait for supply to be available again.”
Sharing the cost burden
It’s a basic law of economics that shortages create price increases. So how severe has it been with the cost of wine bottles?
Berkmann buyer Simon Zuckerman says: “We are certainly seeing issues with the availability of glass from South American suppliers, which I believe is largely due to local issues with furnaces in both Argentina and Chile.
“This is affecting production lead times, which have increased significantly and led to several situations where our suppliers have had to temporarily switch from their normal bottles to an alternative colour or shape.
“This hasn’t translated into price increases yet, as brands look to maintain continuity of pricing during the year. But if the situation continues into next year, then it is very likely that these costs will be factored into any price increases.”
Such increases are already apparent in Europe. According to an email seen by The Wine Merchant, sent by a German producer to its UK importer, the cost of a 75cl glass bottle has risen from 32 cents before the pandemic to 40 cents now, a 25% increase.
Simon Thackeray at Enotria&Coe says: “We are doing what we can to absorb the impact for our customers, as we feel that stable supply and consistent pricing is important for the trade to succeed in these uncertain times.
“However, in specific circumstances we will be compelled to push through price increases. For example, it is very likely that in response to the Consorzio Tutela Prosecco, we will have to put through an increase in Prosecco pricing.”
Glass isn’t the only problem
Although the rising cost of glass is arguably creating most of the chatter, importers are keen to point out that it’s just part of a wider pricing issue with dry goods generally.
Producers are facing – and passing on, where they can – a suite of additional costs. The German producer, quoted earlier, is being hit by even bigger price increases than it’s noticing with glass.
Its cardboard 12-bottle cartons are now 45% more expensive than they were two years ago. Corks are up 34%, and screwcaps 100%. Labels cost 41% more. That’s before you factor in some essentials such as fuel (up 52%), salaries (up 26%) and toll surcharges on deliveries (up 204%). It’s no wonder that exporters expect a bit of sympathy and support from their partners.
“Yes, costs are being passed to us,” says Doug Wregg at Les Caves, “I think mainly because the totality of increases across all the raw materials, combined with very small vintages, combined with wage inflation, combined with high fuel prices, has put huge upward pressure on prices.
“Normally, producers will wait until a new vintage is released before passing on the costs, but in certain cases they do it mid-vintage.
“We have been trying to manage our prices as best as possible. It has become increasingly difficult because shipping, warehouse and delivery costs have gone up around 10%. With Covid, the war in Ukraine and climate crisis, we’re in for a rocky ride.”
Nicholas Moschi at Liberty Wines is equally upfront. “Prices had been rising steadily with increases passed to producers in December 2021 and January 2022,” he says. “The war in Ukraine has made things significantly worse with less availability and energy cost increases.
“Pricing for Europe has mostly been agreed so producers have been absorbing most of the costs. Some of these have been significant so we had to help producers. If difficulties remain, unfortunately more increases will be necessary.”
All in it together
Sadly for retailers, spiralling price inflation looks certain to be a fact of life for the foreseeable future.
“I think the important thing is for customers to understand that most wine merchants, I suspect, will do everything in their power to minimise price rises,” says Doug Wregg. “But there are additional costs that you have to pass on sooner rather than later, because the longer one postpones, the bigger the eventual jump.
“The other hidden cost out there, not related to glass, is the complexity of shipping and the financial calculations that need to be reset each time. We have had to employ more people in shipping than ever – so, higher costs there too – to communicate with transport companies, growers, check forms, arrange consolidations, and chase the bonded warehouse.
“Shipments take weeks longer to arrive than they used to. It is probably slower now than 300 years ago.”