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No shortage of wine

The harvest this year will be the smallest one in a long time. It is the smallest production, counting the entire world’s volume, in around fifty years. R


This is due mainly to bad weather: frost in the spring, hail, rot, and then a very hot and dry summer, especially in the three major wine countries, accounting for the main portion of the world’s wine production.

But the misery did not end there for the wine producers this year. In Spain, Portugal and California, they have had catastrophic forest fires just at harvest time, or just after having picked. Fires that have caused huge damage and many deaths.

Large stocks

But no, there will not be a shortage of wine, so you do not have to worry. There are, for example, large stocks of wine. In France there is what amounts to one year’s production in stock that can be tapped. So it is very doubtful whether the small harvest will have any significant effect on prices.

This is when you look at it on a macro level. Looking at details, there are some regions that certainly will have less wine to put on the market. And maybe will raise prices. But the risk is that some other region then will step in and take its place.

Looking at an even more detailed scale, the effects of this year’s difficulties can be more dramatic. Some wine producers will have less than half of normal production, sometimes as little as 10% or 20% of what’s normal. There is a very definite risk that some may end up in financial difficulties and that they may, in the worst case scenario, be forced to close the business or to sell. The wine industry is not a good business if you want to earn big money.

One example: In the 80s, there were 10,000 wine producers (“châteaux”) in Bordeaux. Today, the number is just under 7000. In a couple of decades, 30% have disappeared. But this does not mean that production has decreased. Over the same period, the planted area has increased from around 100,000 hectares to 112,000 hectares. Bordeaux is not the only district this has happened. Champagne is another example.

In other words, the wine industry is consolidating (albeit on a small scale).

One conclusion may be that if you want to enjoy a wide variety of exciting wines, then you should buy from the small producers, those who really need you as a customer in order to continue making good wines.

(Source: Per Karlsson BK Wine)