With global wine production falling to a 60-year low in 2018, wine prices could rise.
Global wine production is at a 60-year low.
Paris-based global wine production fell to 250 million HL last year, it said Tuesday, down 8.6 percent from 2016 and the lowest level since 1957. Global wine consumption rose slightly to 243 million HL.(. 1HL=100 litres, or about 133 standard bottles of wine.
OIV said problems such as frost in late winter hindered the harvest due to poor weather conditions and falling production in Europe in 2017. Total European wine production fell by 15% in 2017. Spain lost 20 percent in wine production last year, France 19 percent and Italy 17 percent, according to Reuters.
Europe accounts for about 65% of global wine production.
Other regions performed better, with U. S. wine production roughly stable. Just last year, a wildfire in California resulted in less vineyard damage than originally estimated. Australia’s production is roughly flat, while the harvest in South America has largely recovered from the 2016 El Nino disaster. That child & # 41. Recovery in mid-2019, with growth in South Africa despite continued drought.
In addition, China has become the world’s seventh largest wine producer, and its demand has increased for three consecutive years. Demand rose 3.5% to 1.79 billion liters in 2017. China imposed new tariffs on 128 products imported from the United States, which took effect in April.
Consumers preferring lower-priced wines may feel the pain, experts say. Stephen Laneclev (Stephen Rannekleiv), global wine strategist at Rabobank (Rabobank), said: ” Wine companies targeting low prices will be hit hardest because their profits are already very small. They feel great pressure when prices rise.」。
Mid-priced wines may also go up higher.”In some cases, lower quality wines may be mixed into higher value products, so that almost all categories of wines will have a declining quality.」。
Producers of wine, beer and spirits Constellation Brands Inc.. The stock fell 0.89% on Tuesday.