Economic effects of the Austrian wine industry
The wine industry secures one in 17 jobs in Burgenland
The wine industry has a significant impact on Austria’s national economy. To assess the often underestimated contribution of this sector to the wider Austrian economy, the Austrian Wine Marketing Board asked the Institute for Advanced Studies (IHS) to conduct a study on this topic. The multiregional input-output analysis developed by the Companies, Industries and Regions research group was used to evaluate and quantify the “Economic Effects of the Austrian Wine Industry” in terms of value added, employment and tax revenues. In addition to the national results, the study also quantified the interregional and intraregional economic effects for Burgenland in four research areas.
EUR 234 million of gross value added in Burgenland in 2014 despite very small harvest
Although the purely agricultural production of wine shows little momentum compared to the reference year 2004 due to a series of below-average harvests since 2010, the overall economic effects of the rapidly evolving wine sector in Austria are quite remarkable. Considering direct effects (effects created, for example directly at the level of winemaking), indirect effects (taking into account intermediate consumption and downstream sectors) and induced effects (e.g. consumption by direct and indirect employees), the Austrian wine industry generated approximately EUR 3.6 billion in gross value added in 2014.
Burgenland generated approximately EUR 234 million along the value chain. This means that the total gross value added attributable to the wine industry accounted for 3.4% of Burgenland’s total value added. The wine industry secures over 7,400 jobs in Burgenland, which corresponds to 6.04% of Burgenland’s workforce in 2014.
Fiscal authorities, trade, hotels and restaurants & tourism benefit most from the wine industry
40% of value added and 35% of all jobs in connection with wine are outside of the four wine-growing provinces of Austria. Overall, more than 75,000 jobs were secured by the wine sector in 2014, representing 1.6% of Austria’s workforce.
Looking only at Burgenland, one can safely say that, apart from winemaking (agricultural wine growing and manufacturing of wine from grapes), the strongest positive effects are observed in the trade, hotel, restaurant and tourism sectors. The wine trade and wine consumption in hotels and restaurants alone resulted in EUR 177 million of gross value added.
The fiscal authorities were among the big winners as well: even after deduction of various subsidies, which amounted to a total of no less than EUR 230.6 million in 2014, the public sector raked in over EUR 1 billion in consolidated taxes and duties. The public authorities in Burgenland also had their share of the pie. After fiscal equalisation, the province of Burgenland collected EUR 5.7 million in taxes and duties, while Burgenland’s municipalities received EUR 5.8 million.
Positive development thanks to focus on quality and meticulous work
“As already pointed out by the president of the Austrian Viticulture Association, Johannes Schmuckenschlager, records clearly show that average earnings in agricultural wine production have increased significantly, while the share of subsidies in value added is on a downward trend. This positive development would not have been possible without the meticulous and quality-focused work of our local winemakers. The Austrian Wine Marketing Board and Wein Burgenland have actively supported them in their endeavours and thus also played a part in this success”, says Andreas Liegenfeld, the president of the Regional Viticulture Association of Burgenland.
“The IHS study clearly shows just how important the wine industry is for our province. As one of Burgenland’s most prominent icons, the wine industry is not only a key factor in creating added value but also an important brand ambassador both in Austria and abroad. Our local winemakers and the marketing organisations are doing excellent work here. Our goal is to continue along this successful path in the future”, proudly proclaims Verena Dunst, Burgenland’s minister of agriculture.
Christian Zechmeister, the managing director of Wein Burgenland, adds that “the wine industry also plays an important role as an employer. More than 7,400 jobs – calculated in man-years – are related to wine in one way or another. This means that one in 17 jobs in Burgenland is secured by the wine sector – a remarkable feat for such a small sector as the wine industry!”