ECONOMISTS have warned that the world is headed for a wine shortage as vineyards struggle to keep pace with steadily rising demand.
In 2012, the industry saw its deepest shortfall in more than 40 years as demand for wine, including for use in blends like vermouth, outstripped supply by 300m cases - around a tenth of total wine consumption worldwide. This compares to a decade ago when the industry produced an excess of 600m cases, according to research by Morgan Stanley.
“Data suggests there may be insufficient supply to meet demand in coming years, as current vintages are released,” said the report.
Global wine production has been in decline since a 2004 peak, and supply been in balance or shortage since 2006 as makers erode into their excess inventories.
A fall in global "area under vine" - the total area covered by vineyards - has driven the decline in wine production. In the last 12 months, production from Europe, the world's biggest wine-producing region, was also hit by poor weather.
Meanwhile, apart from a short dip between 2008 and 2010, wine consumption has been on an upward march, with booming demand in the US and China driving the rise, with the former poised to overtake France as the world's number one wine buyer.
Net wine exporters such as Australia, Chile, Argentina, South Africa and New Zealand stand to benefit from the shortage, with demand for exports set to soar, pushing prices up.