Profitability of wine grape growing in the European Union: an empirical analysis

European wine-growing consist of different features for each region of member state, and every European wine area has its specific characteristics, not only as regards the degree of specialisation of wine-growing holdings and soils, but also as regards the size of the vineyard and the varieties of grapes. The concept of profitability has been variously employed in several agricultural economic analyses and its evaluation has allowed to assess the economic performance of farm, according to different perspectives and directions. The purpose of this study was to assess the profitability of wine grape growing among principal EU wine producing countries. It was carried out between 2002 and 2008, the last year available for consulting the Farm Accountancy Data Network (FADN)(15 EU member states). Taking into account FADN data, we estimated the revenues productivity, expressed as Farm Net Value Added per Total Output (FNVA/TO). This indicator allows to observe the best performances of agricultural holdings, expressing the capability to develop new wealth by wine grape growers. The analyses have highlighted several significant differences among EU countries. The results show that in recent years the profitability of European wine grapes farm producers has significantly grown overall and by continuing to aim at production quality and budgeting farm costs the next few years will see a continued decrease in current disparities among member countries above all in terms of income. In relation to main economic indicators (TO and FNVA) wine grape growers in Greece, Austria and Germany show the greatest growth rates in EU. With respect to revenues productivity (FNVA/TO) of EU wine grape growers, Germany, Greece, Spain, and Austria fall while only Italy increases its revenues productivity index. France, the most important wine-producer state in EU, maintains its revenues productivity index substantially unchanged.