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Global trends in the world of wine (4): How the 2017 harvest has changed wine demand-supply dynamics

Severe spring frosts and summer heatwaves, as had not been seen since the late 50s and early 60s, gravely affected especially the European harvest in 2017. This resulted in a historically low worldwide production of only 250m hl. The overall 9% global decline against 2016 effectively masks significant differences between countries: while yields in the US and Australia has actually been strong, the main producing European countries saw steep declines: Germany -15%, Italy -17%, France -19%, and Spain -20%.

 This small harvest, in several countries the smallest in half a century, has significantly contributed to changing demand and supply dynamics. We have been used for a long time to excessive supply of wine, especially at the lower end – the infamous European ‘wine lake’ – and the resulting pressure on prices. In a drive towards quality and to make viticulture sustainable over the long term, the EU has successfully implemented vineyard surface reduction policies over the last decades. These policies have been slowing down in recent years, but their impact on production volumes has now been compounded by the unpredictability of today’s climate.

As we will see in a future post, the wider swings in climatic extremes from year to year will have important consequences for wine-making in the longer term. In the immediate future, limited availability of wines from 2017, which in fact looks very promising in terms of quality, means we can expect prices to be firm for the coming months.

A young vine, Southern France

2 thoughts on “Global trends in the world of wine (4): How the 2017 harvest has changed wine demand-supply dynamics

  1. I would never have thought about it. What would this do to the value of high end wines? Which 2017 wine would you predict would have a better yield for investment and which will be best to drink now?
    Thanks, Eric

    1. Hi Eric, probably early to say, but it is likely that prices for high end wines, eg from Burgundy and Bordeaux will be affected by scarcity on release, which will happen over the next couple of years, or even later in case of wines aged for longer prior to leaving the producer’s cellar. In the case of top Burgundy this will possibly accelerate the price increases we have been seeing in the last years due to demand from Asia. When to drink? Really depends, most whites will be fine on release, while the best reds usually improve with some cellaring. 2017 is in any case a year to look for less known appellations as alternatives to the more famous ones, which may be difficult to find.

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