“If demand outpaces bottled wine, they will stop making grape juice concentrate and bulk wine.”
Some of the worries over supply come from the drop in vineyard surface area. According to the OIV, around 300,000 hectares of vines have been lost since 2006.
But producers say many vines have been ripped up deliberately to ease a wine glut in the past.
“We’ve reduced production over the past decade, because supply was too big and quality was low,” said Loic Hemard, spokesperson for Inter Rhone which represents wine growers for Cotes de Rhone and the Rhone Valley.
By lowering yields, the vines produce better grapes and supply is in line with demand, keeping prices stable.
“Now we control the production to guarantee quality and a price.”
Morgan Stanley’s prediction of a price hike also caused some raised eyebrows from growers who remember unsustainably low prices of the past.
“For the last 40 years the world has been producing more wine than it consumed very often leading to prices being too low,” added Sichel.
“Surplus demand will put tension on prices but we know from experience that the market is very sensitive to price increases. An increase in prices will lead to a drop in demand,” he said.
And Navesi said the industry had plenty of room to manoeuvre.
“There is a lot of grape juice and bulk wine to be soaked up before there will be price increases,” he said.