World wine growers face CO2, fuel challenges

VERONA, Italy (Reuters) - World wine producers face rising challenges from global warming and soaring fuel costs but any resulting price rises will be bearable, the newly re-elected head of the International Organization of Vine and Wine (OIV) said on Friday.

More efficient producers will be the winners by finding out how to produce better wine even with rising costs, Federico Castellucci said shortly after being re-elected director-general at an OIV congress.

"The carbon footprint will be eating into wine along with everybody else -- the cost of glass, the logistics costs. We do have some problems of water supply and climate change, particularly in some areas," he told Reuters.

"There may be some (price) evolution, but at a very bearable level. And at this level, the more efficient (producers) will be rewarded more than the others, and the consumer will find this out."

Some solutions being researched include lighter bottles and other packaging such as boxes. Increased competition and cost-saving efforts could speed the trend to bigger plots, Castellucci said.

"I think there will be a restructuring of properties to larger areas. We've gone from 0.7 hectares to 1.2 hectares on average in the last five years, now we might go to five hectares, say, in coming years."

One hectare is equivalent to 2.47 acres.

OUTPUT DOWN, CONSUMPTION UP

World wine production fell about 5.5 percent last year to some 271 million hectoliters, the OIV reported this week, one hectoliter being 100 liters. The OIV is a 44-nation intergovernmental group that deals with technical and scientific aspects of grape growing, wine making and the sector's economy.

However, wine consumption rose just over 1 percent to 241 million hectoliters. France was the world's biggest producer and consumer of wine last year, trailed in both categories by Italy.

World export growth has outpaced consumption by a three-to-one volume margin since the mid-1990s, Castellucci said. That means that traditional European producers have enjoyed strong sales even in the face of fierce competition from "new world" producers such as the United States and Australia.

"The cake has become so much bigger that they have not lost quantity," said Castellucci, a 57-year-old grape grower from Italy's Marche region.

He said he welcomed the "strong message" that Italy's new centre-right government had sent to try to clean up a damaging flap involving Italy's prized Brunello di Montalcino wine. The moves include naming a new three-member panel to certify the authenticity of the Tuscan wine.

Italian authorities seized hundreds of thousands of bottles in April because they suspected winemakers were using grapes other than Sangiovese, the only grape allowed in Brunello di Montalcino. U.S. authorities have warned they would ban imports of the wine starting next week unless its authenticity was attested.

However, Castellucci said it was often hard to guarantee the absolute authenticity of wine.

"I'm a grape grower. I can see that in nature 100 percent is very rare," he said, noting that even single-grape varietals allow a lower limit of 85 percent of one grape type.

"Some flexibility is better to get a better product," he said.

Asked what his favorite wine was, Castellucci said, "The wine I used to produce. And the one you drink with friends. That's the best wine."

(Editing by Mark Trevelyan)