Thirsty for Wine: Global Shortage Upon Us

Despite a global boom in wine consumption, production is on the decline, resulting in a worldwide shortage.

By Alaia Howell
|  Thursday, Oct 31, 2013  |  Updated 11:21 AM PDT
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Thirsty for Wine: Global Shortage Upon Us

ASSOCIATED PRESS

Workers collect red grapes in the vineyards of the Domaine de Chevalier, a Grand Cru des Graves, during the grape harvest near Bordeaux, southwestern France. The grape harvest in the European Union has picked up from the extremely bad 2012 season, but still struggles to keep pace with the global wine demand.

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There’s an imminent wine shortage upon us, according to a report released on Monday by Morgan Stanley Research.

Global supply barely exceeded demand last year. Non-wine uses (such as Vermouth) included, there was actually an undersupply of 300 million cases worldwide, according to the report. This is the largest shortfall of wine production in almost 50 years.

Some factors that account for the shortage include poor weather, which lead to a weak harvest last year. This year showed marked improvements, but despite the fact that wine production in 2013 is rising to seven-year highs, according to the International Organization of Vine and Wine, Morgan Stanley Research says that it will take more than a single harvest to close the gap.

With global wine consumption on the rise since the late ‘90s, world production hasn’t been able to keep pace for quite a while, showing a downward trend since the early 2000s.

Last year alone, world production fell by more than 5 percent.

In Europe, production fell 10 percent since 2012, while consumption rose by one percent, according to the data published by the report.

This is significant given Europe is the biggest supplier of the world’s wine, accounting for 60 percent of production. They suffered a 25 percent decline since 2004, according to the report.

There are approximately one billion wine producers globally, producing 2.8 billion cases per year, half of which come from Europe.

America consumes 12 percent of the world’s wine, but produces only 8 percent, according to the report. American wineries have “expanded dramatically” in the last 15 years, but most are boutique operators rather than major producers.

Looking toward the future, the report projects that the U.S. and China will consume over 400 million cases of wine a piece by 2016.

Wine is most popular in France, followed by America, then China.

The report showed output from "new world" producers like U.S., Argentina, Chile, Australia, New Zealand and South Africa have peaked. Together they account for less than 30 percent of global wine exports.

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