The original report by Morgan Stanley analysts Tom Kierath and Crystal Wang points out that global wine consumption is currently around 3bn cases per year, while at the same time, the planet’s one million producers churn out around 2.8bn cases every 12 months. The report goes on to say that production in Europe has been steadily decreasing and, at the time of writing, stands 25% down from the 2004 high. Conversely, production from new world countries including the United States, Australia, Argentina, Chile, South Africa, New Zealand is on the rise.
It’s hard to argue with numbers, particularly from the guys at Morgan Stanley, but what does the wine industry say? The International Organisation for Vine & Wine says the fears are exaggerated, and that the squeeze on supply is expected to ease in 2013 with production levels returning to that of 2006 at 281 million hectolitres, which at 9 litres a case, works out to 3.12bn cases.
Two conflicting views then, so a little further digging is required. It’s true, 2012 was a poor year all round weather-wise meaning production levels were in decline, and this drop happened to coincide with the US and China drinking more wine between them than ever before. We’re also coming to the end of a period of historic over-supply, which led to vine pull schemes in place all over Europe in an effort to reduce the EU wine lake.
So yes, 2012 production levels were down, but 2013 is expected to result in production levels returning to their highest level since 2006 (producers I spoke to at the World Bulk Wine Exhibition last week all reported excellent harvests over the past few months) and with most cellars around the world stocked well enough to see us through any short-term gap in supply, there doesn’t seem to be any great need for worry here in the UK – we’re the most mature wine market in the world, and, in contrast to the US and China, our consumption is actually in slight decline, meaning supply and demand will remain in a state of relative equilibrium while production recovers, so there’s no need to panic…go ahead and grab the corkscrew.