Extreme weather is driving wine production down, particularly in Europe, and consumers will likely feel the beverage industry’s pain.
Unseasonable frosts, searing heatwaves and drought have made 2017 a disastrous year for vineyards, particularly in Italy, France and Spain, the world’s top three wine producers. The International Organisation of Vine and Wine (OIV) says that globally, wine production will hit a 50-year low. Italy will be the hardest-hit, the OIV estimates, with production falling 23%. In France, which had a difficult 2016, the group says production levels will drop 19%. In Spain, a 15% decline is expected.
“This drop is the consequence of climate hazards,” said Jean-Marie Aurand, Director-General of Paris-based OIV. “In the European Union extreme weather events – from frost to drought – significantly impacted 2017 wine production, which was historically low.” The European Commission predicts that France will see its worst wine harvest since 1945, the BBC reports.
The production shortfall is likely to raise prices along the wine industry’s complex supply chain, down to the consumer endpoint. It will also spell the end for the global surplus left from weak demand after the financial crisis. “Prices for consumers will inevitably rise,” said Miles Beale, Chief Executive of the UK-based Wine and Spirit Trade Association (WSTA). “It’s a keen reminder that wine production remains at the mercy of the weather. As the biggest per capita importer of wine in an international market, the UK is bound to feel the effects of an increasingly challenging market.”
Small producers, already hit by several years of meagre harvests, "are facing the very real problem of having to sell family domains because, unless the banks are going to help them in some way, they’re stuck,” said Rupert Millar, Fine Wine Editor of industry journal The Drinks Business. “But just how many this is happening to is another question.”
OIV has more optimistic forecasts for some wine-growing regions. In Australia, it expects production to rise 6%, and as much as a quarter in Argentina. In California, the damage from this year’s wildfires has yet to be fully assessed, but fortunately for the regional wine industry, most growers had already harvested their crops before the wildfires broke out. Thus overall output in the US, which is the world’s fourth-largest wine producer, is expected to fall by just 1%.
