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A decreasing world supply of wine

By Staff | Nov 1, 2013

If you know any lushes or anyone who can be considered a “connoisseur” of the vino, you may want to hope their tickers are top notch. If you were to tell them there was a wine shortage as of last year, their hearts may sink.

Earlier this week, Morgan Stanley Research, as reported by CNN Money, released a report showing that in 2012 there was an undersupply of about 300 million cases of wine. As reported by various outlets, this is the largest wine deficit in over 40 years. (About 2.8 billion cases were produced in 2012.)

Multiple factors are at play according to The Telegraph. In September of 2012, the International Organization of Vine & Wine warned that there was a poor grape harvest due to extreme weather. Due to this, the price of wine in Europe, especially in Great Britain, would go up.

France, Italy and Spain are some of the world’s biggest wine producers, however output from them has fallen. That doesn’t mean they’re the be all, end all of wine producers. The United States and China produce wine as well. The latter has gone from almost no wine produced in the ’90s to nearly 150 million cases last year. Also peaking in production were Argentina, Chile, Australia, New Zealand and South Africa.

Demand and consumption have increased to almost 3 billion cases and rising. According to Time, China’s consumption of wine has quadrupled in the past five years, while both their economy and standard of living have increased. They follow Americans and the French in consumption. Consumption between 2008 to 2010 had decreased due to recession, but it has been going back up.

Because the demand is increasing more than the supply, the price of a bottle of bubbly will go up, if it hasn’t already.

Does that mean you should get into the wine-making business? Not unless you’re willing to sink in huge amounts of time and money. There are a lot of forms you need to fill out at the federal, state and local levels of government. Then you have to procure land; a building for your operation; equipment to ferment, bottle, age and do whatever’s needed to make good wine; and grapes, or whatever fruit you’re going to make wine with. Then you have to ensure what you’re producing is good quality stuff that someone would want to drink. By then, you may not produce enough volume to even make a dent, if demand continues increasing.

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