A Changing World Order: 5 Critical Insights for the Wine Market

The global fine wine market is undergoing a profound transformation. From increasing geopolitical tensions and imminent trade wars to evolving consumer behavior and climate-related harvest challenges, the factors influencing the future of fine wine are as intricate as they are interconnected.

At RareWine, our in-house research, analysis, and data team continuously monitors these developments to understand their impact on wine producers, collectors, merchants, and the global market as a whole.

This article offers five key insights derived from our latest findings, each delivering a clear perspective on the risks and opportunities that will define the next chapter of the fine wine landscape. It is essential for merchants, collectors, and investors to grasp these shifts to make informed decisions in an increasingly dynamic market.

Here are five key insights that you must be aware of:

1. The Potential 200% U.S. Tariff on European Wines: History, Risks, and Opportunities

The threat of a 200% tariff on European wines and spirits from Donald Trump, in response to EU tariffs on American whiskey, has cast a long shadow over the market (BBC). While no final decision has been made, the speculation alone has a real effect.

What happened last time?
In 2019, during Trump’s first term, a 25% tariff was placed on some still wines from France, Germany, and Spain - though Italy and Champagne were spared. That relatively modest tariff was manageable: producers and importers shared the burden, and the market absorbed the cost. But a 200% tariff would be a very different story.

Is Italy again in the clear?
Optimism is notably higher in Italy. During the last round, Italy escaped the tariffs, and speculation now suggests the same could happen again - particularly as Italian Prime Minister Giorgia Meloni maintains strong relations with Trump. If Italy avoids penalties once more, Italian wines could become even more attractive in the U.S. market relative to their French counterparts.

A flooded market, for now
Since Trump’s re-election in 2024, speculation about the tariffs has led to massive stockpiling of European wine in the U.S. Importers raced to fill warehouses before any tariffs took effect. Now those same warehouses are full - and market activity is stalled as buyers wait for clarity.

Meanwhile, European producers are increasingly concerned about being stuck with unsold stock, especially if the U.S. market retracts. Liquidity issues are on the horizon. If these producers cannot sell their wine quickly enough, they may have to resort to discounting - or worse, end up with aging inventory they never intended to keep.

Latest developments: U.S. importers sound the alarm
According to a recent CNN report (CNN, March 2025), U.S. wine merchants are deeply concerned about the impact of a potential tariff on imported European wine and the entire domestic wine economy.

Many U.S. retailers rely on a blend of European and California wines to attract customers, and fear that the removal or extreme inflation of key European labels will result in a drop in wine interest altogether.

Distributors have warned of severe disruptions in supply chains, and some restaurant groups are already adjusting their wine lists in anticipation, removing high-end European options pre-emptively.

One California wine importer told CNN: “A 200% tariff won’t just hurt France. It’ll crater the whole category.”

This ripple effect is already creating hesitation in trade and consumer markets, and the longer the uncertainty lingers, the more damaging it may become.

How long could this last?
If enacted, the tariffs would likely remain in place for the duration of Trump’s presidency — but could just as easily be rolled back. We’ve seen Trump’s administration reverse tariffs before under diplomatic or market pressure.

In the meantime, new demand may rise elsewhere. Mercosur countries are lifting tariffs on European wines. Asia, particularly Vietnam and Taiwan, continues to grow its luxury consumption base, which may help absorb excess supply from producers looking to reduce U.S. exposure.

Key Takeaways:

• Expect short-term volatility - but not collapse.
• Consider reallocating exposure away from wines heavily reliant on U.S. demand.
• Italian wines may benefit if exempted again.
• Burgundy will remain Burgundy - rare, coveted, and long-term secure.
• Keep an eye on the broader industry impact - including domestic players who depend on a healthy import market.
• Wine is already a long-term investment - and in the worst-case scenario, this would likely just mean extending your investment horizon by a few years.

2. Younger Consumers: Drinking Less, but Choosing Quality Over Quantity

Declining overall wine consumption among younger generations has raised concerns in traditional wine markets like France and the U.S. However, this broad trend masks a more profound shift - younger consumers drink less but prioritize premium wines.

A Shift Towards Premiumization
A 2023 study from Wine Intelligence found that younger consumers are spending more on high-end wines, particularly Champagne, boutique Burgundy, and organic/natural wines. (Wine Industry Advisor)

This reflects a broader premiumization trend observed in the luxury goods sector. The IWSR Drinks Market Analysis forecasts that although overall wine consumption may decrease, the value of premium wines is set to rise, especially in key investment categories such as Burgundy and Champagne.

Gen Z and Sustainability: A New Investment Focus?
Younger consumers show a strong preference for sustainable and organic wines, favoring producers who practice biodynamic farming and low-intervention winemaking. This has led to a surge in demand for wines from producers like Domaine Leflaive and Domaine Leroy, which are both recognized for their commitment to organic viticulture.

Global Megatrends: How Shifting Diets Are Influencing the Future of Wine
In recent years, a significant megatrend has emerged, showcasing a global shift toward lighter, plant-based diets. Health considerations, environmental concerns, and ethical factors are driving this transition. For example, the Food and Agriculture Organization (FAO) predicts a 14% increase in global meat consumption by 2030, mainly fueled by income and population growth. However, in high-income countries, there's a growing movement to reduce meat intake in favor of plant-based alternatives. This is reflected in the increasing popularity of plant-based meat substitutes and heightened awareness of the environmental impact of meat production.

This evolution in dietary habits is also influencing wine preferences. As individuals adopt lighter meals, there is a natural gravitation toward lighter, more versatile wines that complement such cuisine. For example, the UK's growing interest in white mulled wine reflects this trend, as consumers seek beverages that align with their preference for lighter flavors and dishes. Similarly, elegant Burgundies and crisp Champagnes are becoming increasingly favored, as their delicate profiles pair seamlessly with plant-based and lighter fare. (The Guardian)

Understanding this shift is crucial for wine enthusiasts, collectors, and merchants. Aligning wine selections with evolving dietary trends ensures that offerings remain relevant and appealing to contemporary palates.​

Key Takeaways:

• Fine wine remains a key luxury asset, even as overall consumption patterns shift.
• Younger buyers are prioritizing high-end wines, particularly from Burgundy and Champagne.
• Sustainability is an increasing factor in purchasing decisions, offering new opportunities for investment in biodynamic and organic producers.
• As diets become lighter, the wines that accompany them will also become so, with a growing demand for elegant styles such as white and sparkling wines.

3. Mercosur Trade Agreement: A Boom for European Wines?

The Mercosur-EU trade agreement, which removes tariffs on European wine and spirits in major South American economies (Brazil, Argentina, Paraguay, Uruguay), presents a significant opportunity for European producers and investors. (European Commission)

Why South America is a Key Growth Market
South America’s rising middle and upper classes are increasingly interested in fine wines. In Brazil, the largest economy in the region, wine consumption has grown by over 30% in the past five years.

Brazilian wine drinkers have a strong preference for European wines, with French and Italian labels dominating premium wine sales. Now, with tariffs eliminated, European wines will become even more accessible, likely accelerating demand growth.

A Shift in Global Demand?
With uncertainty in the U.S. market due to potential tariffs, South America could absorb some of the displaced demand for European wines. Investors should monitor import trends in Brazil and Argentina, as these markets may become increasingly significant for fine wine investment.

Key Takeaways:

• South America presents a growing opportunity for European wine producers.
• Brazil’s demand for fine wine is accelerating, particularly in the premium segment.
• Tariff-free trade agreements may offset losses from the U.S. market, reshaping global demand patterns.

4. The En Primeur Market: Is Bordeaux Losing Its Appeal?

Bordeaux’s En Primeur system has long been a pillar of the fine wine market but is now facing significant challenges. Investors and collectors increasingly question whether En Primeur offers real value, as back vintages - already bottled wines with higher critical scores - are often available at lower prices.

Oversupply and Pricing Issues
One of the most significant issues facing Bordeaux is overproduction. Many En Primeur releases are priced too aggressively, while older vintages that are more mature and better rated can be acquired for less. (Liv-ex)

This has resulted in declining market confidence in the En Primeur system among merchants worldwide. Recent En Primeur campaigns have faced challenges, with most châteaux adjusting their pricing strategies during the campaign due to weak demand.

Why Back Vintages May Be a Better Investment
Savvy investors are increasingly bypassing En Primeur in favor of proven vintages. Older wines that have been critically acclaimed and have demonstrated strong secondary market performance often present a more attractive investment option.

Looking Ahead: What to Expect from En Primeur This Year
As the wine world prepares for the upcoming En Primeur 2024 vintage, early signals from Bordeaux indicate a significant shift in pricing strategy. Rumors suggest that producers are considering substantial price reductions on the most recent vintage to reignite interest in the market and sell stock in a stagnant environment.

If these price cuts materialize - and all indicators suggest they will - they will have broad ripple effects across the Bordeaux landscape. A heavily discounted 2024 vintage risks undermining the value of recent back vintages, particularly those released over the past three to four years. Merchants and collectors who invested in recent campaigns may now be holding stock that is suddenly overpriced relative to the newest release, resulting in widespread devaluation of En Primeur holdings.

At RareWine, this development is no surprise. We have long questioned the sustainability of the En Primeur system and have advised our clients for several years to avoid primary Bordeaux campaigns. Our decision was based on two clear trends:

1. Overproduction and inflated release prices, and
2. The increasing availability of older, critically acclaimed vintages at better value.

By remaining disciplined and concentrating on established vintages already available in the secondary market, our clients have largely sidestepped the drawdown that now jeopardizes many Bordeaux En Primeur investors.

That said, not all Bordeaux is created equal. Historic, blue-chip vintages with critical acclaim and limited availability - such as 1945, 1961, 1982, 1989, and even 2005 and 2016 - are expected to retain their value or even appreciate over time. These wines showcase Bordeaux at its finest and are largely insulated from the price corrections affecting recent vintages.

Key Takeaways:

• Back vintages may offer better value than new En Primeur releases.
• Bordeaux’s oversupply issue is putting pressure on prices.
• Investors should be cautious with En Primeur, focusing instead on well-rated past vintages.
• This year, En Primeur is expected to see sharp price reductions - a sign of market pressure, not renewed strength.

5. The Impact of Low Yields

The effects of climate change on viticulture are no longer hypothetical - they are unfolding in real-time, and 2024 has been a harsh wake-up call.

According to the French Ministry of Agriculture, the 2024 harvest is one of the smallest in modern history. The International Organisation of Vine and Wine (OIV) reported that global wine production in 2024 dropped to its lowest level since 1961, with an estimated 231 million hectoliters - a 2% decline compared to 2023. France was hit particularly hard, with production plummeting by 23% due to adverse weather conditions.

This follows similarly disastrous years: 2021 was declared the worst agricultural disaster in France in over 100 years, and both 2017 and 2019 saw severely reduced yields. In fact, these four vintages - 2017, 2019, 2021, and 2024 - are now considered among the six smallest harvests in a century.

For producers, the message is clear: wine growing is becoming increasingly unpredictable and fragile. Spring frosts, summer droughts, hailstorms, and mildew are striking more frequently and with greater intensity - putting entire vintages at risk. These challenges strike at the heart of small domaines whose livelihoods depend on stable harvests.

This should concern us all as wine lovers. With yields shrinking and conditions worsening, access to the world’s most sought-after wines will become increasingly difficult. Scarcity will no longer be a question of prestige but of reality. The next generation of collectors may simply not be able to find the wines that define excellence today.

However, for those considering fine wine as a long-term investment, this further emphasizes the strength of this asset class. Scarcity enhances value, and with dependable supply diminishing, prices for top producers are expected to rise in the long run.

The Growing Demand from UHNWI
On the demand side, the pressure remains high. According to the latest Knight Frank Wealth Report, the population of Ultra-High-Net-Worth Individuals (UHNWI) - defined as individuals with a net worth of over $30 million - is projected to grow by approximately 30% every five years.

That means more global buyers with the means and motivation to acquire rare and prestigious wines - even as production volumes shrink. In this environment, fine wine is becoming more like fine art: culturally significant, emotionally valued, and fiercely competed for by the world’s wealthiest.

Key Takeaways:

• Climate change leads to smaller, more volatile harvests, particularly in France and Italy.
• 2024 joins 2017, 2019, and 2021 as one of the worst years for wine yields in a century.
• Collectors should expect reduced access to iconic wines - and rising prices in the long term driven by extreme scarcity.
• UHNWIs are expanding rapidly, intensifying competition for the world’s rarest bottles.
• Investors should focus on quality-driven producers with limited production and global demand.

Final Thoughts

The fine wine market may face unprecedented global challenges - from geopolitical tension and climate disruption to shifting consumer behavior and evolving trade landscapes - but the underlying fundamentals remain remarkably robust.

“The fine wine market is evolving, but its core remains intact,” says Lars Granat, CMO at RareWine Group, who also leads the company’s research, analytics, and data team. “Merchants, collectors, and investors who understand trade policy, global demand shifts, and supply constraints will be well-positioned for the future.”

As the trends outlined in this report suggest, staying informed and agile is more important than ever. Those who adapt their portfolios and perspectives to the realities of a changing world — while remaining focused on quality, rarity, and long-term potential — will find that fine wine continues to offer not only stability, but opportunity.

Because even in uncertain times, some things don’t change: fine wine remains one of the most resilient and rewarding luxury assets in the world.