Sat, Nov 16, 2013 - Page 12 News List

Wine shortage?

The increase in global wine demand may outstrip supply, causing prices to rise. But vintners say there is no need to panic


Starlings fly above Champagne vineyards adorned with autumn colors, after the harvest, in Mailly-Champagne near Reims, eastern France, last month.

Photo: AFP

China is planting more and more vineyards, the US is reclaiming wine regions abandoned during Prohibition and the English are producing more bubbly than ever before.

And with global production expected to increase still further in coming decades the supply of wine would seem assured for some time to come.

“There are new vineyards [in China], so many new vineyards planted that have not yet begun producing,” said Bruno Butragueno, Asia Pacific director for Rioja giant Compania Vinicola del Norte de Espana.

But that view was dealt a blow last month with the publication of a report predicting a global wine shortage and higher prices.

US bank Morgan Stanley forecast a shortfall with wine drinkers demanding more than the world’s vineyards can produce.

Allan Sichel, vice president of the Bordeaux Wine Council, said demand was growing steadily in Japan and exports to America had increased by 15 percent.

And demand in countries such as newly wealthy China is only predicted to rise too.

“With more and more Chinese travelling overseas ... being introduced to wine and experiencing the western drinking culture, it will only bring up the demand,” said Judy Leissner, CEO of Grace Vineyards in China.

According to the International Organization of Vine and Wine (OIV), global wine production will continue to expand, reaching 281 million hectolitres (Mhl) this year compared to 258 in 2012.

English sparkling wines are contributing to that boost in production.

“The future for English sparkling wine is extremely bright with new producers establishing themselves every day and hundreds of hectares of new vineyards being planted regularly across [southern counties] Sussex and Hampshire and Kent,” said Christian Holthausen of Nyetimber, which pioneered English sparkling wine 25 years ago.

In Argentina, too, Bodegas Santa Ana — with an annual production of 60 million bottles — continues to plant new vines and buy up existing vineyards, according to export manager Martin Navesi.

But is it enough to quench the global thirst for wine?

Growers say their cellars are far from empty.

“We have stock. Port has the rule of three — for every bottle you sell, you must stock two bottles,” said Jorge Nunes, Asia Pacific representative for Port wine producer Symington.

Indeed, Leissner said there was even a surplus of wine in China and that future demand would be met by domestic supply.

“At the moment, I don’t see there is a wine shortage in China,” said Leissner, who produces two million bottles a year. “Many local wineries are unable to sell their wines.”

Grapes aplenty

Martin Navesi, export manager of Argentina’s Bodegas Santa Ana, rejected any idea of a shortage.

“We haven’t seen any significant increase in demand from China and the US — there is a lot of room for growth,” he said.

Rioja producers also dismissed the report.

“We have no data to suggest there is a wine shortage worldwide,” said Butragueno. “The only shortage that we can conceive is with super premium, high-end wines from established houses and specific regions, that have limited production.”

Producers also argue that Morgan Stanley’s forecasted wine shortage doesn’t take into account that the current supply of wine grapes could be used differently.

“Supplies vary year to year, but loads of wine is marketed as bulk wine,” said Navesi, referring to the cheapest wine sold unbottled.

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