The Environmental, Social and Economic Impacts of Winemaking

Updated on December 8, 2018
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Billy Zhang has spent numerous years studying the impact and influence of the winemaking industry on an economy.

The winemaking industry is one that is founded upon an ancient process, which has been refined overtime, resulting in the current industry today. It is a global industry, with grapes grown and wine made across six continents. As a result, the wine industry has had various positive and negative impacts on the world. This includes the negative environmental impacts such as the heavy use of agrichemicals and high water usages. However, the industry has a mixed social impact with the health benefits of moderate wine consumption versus concerns of antisocial behaviour. Nevertheless, it is undisputable that the winemaking industry has had an enormous positive economic impact for many countries, including Australia.

Wine Grapes
Wine Grapes | Source

Two Aspects to Winemaking

The winemaking activity is made up of two aspects: viticulture and winemaking. Viticulture is the process of growing grapes, which can then be turned into wine during the winemaking process. The winemaking process involves the intake of grapes, which through varying processes are then turned into wine, to be sold through a variety of methods. The winemaking activity is split into two types of methods: old-world and new world. Old world wines come from traditional winemaking regions such as Bordeaux in France, and others including most of Italy and Spain, in 2014 they accounted for 46% of world production. These vineyards also utilize traditional techniques such as wooden barrels during the fermenting process. New world wines utilize modern techniques such as steel drums, mechanized harvesting, and screw tops and are found in regions such as Chile, Australia and California’s Napa Valley.

Negative Environmental Impacts of the Global Viticulture Industry

The global viticulture industry involves many negative environmental impacts that debilitate the ecosystems around the world and place them at risk. To practice viticulture, the topography of the landscape must be drastically altered. The natural vegetation is cleared for crops, and wells, irrigation dams and terracing must be developed. An example of this changed landscape is Cinque Terra in Italy where terracing for vines have been implemented. Moreover, viticulture often involves replacing natural vegetation and habitat with a monoculture where only a single grape variety is grown. This is witnessed in the Hunter Valley in New South Wales and unfortunately causes a decrease in biodiversity and thus the health of the ecosystem.

Additionally, through the continual harvest of grapes, vines continually extract nutrients from the soil, depleting the soil of organic matter. This extensive cultivation destroys the soil structure and thus prevents the build up of organic matter. This coupled with use of chemicals such as pesticides, insecticides and fungicides is a major issue. These agrichemicals contain highly potent substances that do not easily break down. Hence, when they leave residue in the soil and bio accumulate in the ecosystem, they can kill many organisms, particularly high order consumers, and in doing so alter the food web. Furthermore, the new world producer’s use of irrigation can lead to salinity issues, in which high salt levels destroy flora and the fauna that subsequently depend upon it. When irrigation supply water is piped from a river or from a dam, the flow regime of the river is severely disrupted. Therefore, organisms such as fish that rely upon the regime to trigger spawning are detrimentally impacted upon. Ultimately, the less water in these watersheds equate to less habitat for aquatic organisms and so places stress upon them.

Global Wine Industry's Positive and Negative Impact on Society

The global wine industry has had both positive and negative impacts on society. This includes the adoption of wine culture throughout the old and new world. This has contributed to the habit of consuming wines with meals, which often occurs in Italy. Subsequently, wine consumers have found great enjoyment and much satisfaction in consuming fine wines, and have opened up a new field in beverage appreciation. This is evident through the development of multiple wine appreciation societies that have increased social interaction and the extensive publication of wine literature.

However, some people are concerned about antisocial behavior associated with overconsumption and binge drinking, particularly in Australia. This can lead to health problems such as sclerosis of the liver, which can be detrimental, and in turn places a burden on the society’s health system. Meanwhile, moderate drinking may have potential health benefits. It is claimed that polyphenols occurring in red wine reduces the risk of heart disease, stroke and cancer. Nevertheless, the addiction to wine consumption and the growing drinking culture of society has decreased the productivity of workers in the economy, and thus reduced the economy’s potential growth. For example, at Commonwealth Bank of Australia, there are free beverages from Wednesday to Friday after work.

Glasses of Wine
Glasses of Wine | Source

Positive Economic Benefits for Economies

The global wine industry worth 28 billion Euros in 2015 has provided enormous economic benefit for economies through it earnings from exports, employment and economic growth. For example, the Californian wine industry produced $59.9 billion in economic value for California in 2005. Whereas, on a smaller scale the value of Washington’s wine industry totaled $998 million. In total, the US viticulture industry as a whole generated $128.1 billion for the US economy in 2005. In addition, wine tourism; an offshoot of the wine industry has become an industry in itself, contributing more than $500 million to rural and regional Australia each year.

Moreover, the viticulture industry creates a substantial number of jobs. In Australia, there were over 28000 jobs connected to the viticulture industry in 2008. In Washington State, the industry employs more than 11000 people. However, in communities that are highly dependent on viticulture, a poor season that does not employ many labourers involves much unemployment and a downward spiral of hardship to the detriment of these communities.

Negative Economic Impacts

Furthermore, the increasing global focus of the wine industry has also had negative economic impacts. In the current era of economic rationalization where large-scale ownership dominates in order to achieve economies of scale, many small farmers have been forced to sell their plots to larger conglomeration, which in turn has further led to a centralization of market power. In Australia, the industry is dominated by only three corporations; Fosters, Orlando Wyndham and BRL Hardy, who jointly own 89% of Australia’s vineyards. Also, there is a duopoly in the distribution channels in Australia, with large liquor chains such as Woolworths and Dan Murphy’s dominating. These chains sell at competitive prices and deal only with large-scale wineries, thus making it harder for smaller wineries to distribute and subsequently operate.

Ultimately, winemaking industry has had a mix of positive and negative impacts on the world. This includes the negative environmental impacts of agrichemical pollution and a significant change of the landscape. However, the social impact of winemaking industry is debatable, depending on whether social interaction has increased or decreased and whether health benefits are considered. Finally, the winemaking industry has predominately had an enormous economic benefits for those economies involved in the industry, such as Australia.

© 2018 Billy Zhang


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