THE 2021 STORY – PART 3
October 27th, 2021 | Bodega
In my previous 2021 posts I have mentioned the quality of the wine itself, the low yield per kilo, and the crazy grape prices. As if these complications alone are not enough, they has been further compounded by the knock-on effect of the Covid crisis. Energy, transport and dry goods prices are all suffering badly as a result.
As the recovery from the pandemic got under way, then so the demand for energy increased rapidly. Gas reserves were already depleted by a cold winter, the generation of power from wind turbines was down (simply owing to a lack of wind), immediately followed a baking summer in many countries placing a huge demand on electricity grids for systems such as air conditioning. Almost the perfect storm.
Increased production costs caused by new energy tariffs, together with unprecedented demand on raw materials, such as paper (for packaging), had also led to sharp increases in tariffs for dry goods. Bottle production for example, depends heavily on gas supply, for their ovens – it’s a very frightening trend.
International supply chains are also under huge pressure. The infrastructure simply cannot meet demand caused by the hangover from Covid and the sudden upsurge in business. Ports are overloaded, ships are queuing, containers are out of position and there is a shortage of drivers and road transport to help clear the backlogs. The price of a container can now be as much as 300/400% more than last year!
The long and short of it all is that the cost of living for all of us will increase, and very unfortunately for us (and our region), our business and wines will simply get carried along by this tsunami.