Tag Archives: wine supply

Winebits 294: Wine supply edition

Winebits 294: Wine supply editionAre there enough grapes to meet the world demand for wine? Watching the world wrestle with this question has turned into fine spectator sport, and these items demonstrate why:

? Pump and dump: This year has seen several reports from banks and consultancies forecasting a dwindling supply of grapes with the implication that wine prices will rise substantially. Lew Perdue at Wine Industry Insight has seen this sort of thing many times, and questions the most recent report: ?The issue is far more complex and requires far more analysis and thought than this shrill, naive and simplistic article presents. ? He goes on to write that reports of impending grape shortages are sometimes used to scare growers into overplanting, and that the people doing the scaring make money out of the result. Hence, pumping and dumping.

? How many French grapes? The Winestream Media has diligently reported what looks to be horrid 2013 harvests in Bordeaux and Burgundy, thanks to very bad weather. That ?s because those are the regions they ?re most concerned with — expensive wine and all that. But in the rest of France, and for the country as a whole, the opposite is true: a harvest exceptionnelle, up 11 percent this year. That increase, compared with a weaker euro against the dollar, should be more than enough to keep prices in line.

? How about those Aussies? Lots and lots of grapes ? so many, in fact, that Big Six producer Treasury Wine Estate is dumping wine that it can ?t sell in the U.S. Nothing illustrates the effect that too much supply has on prices than Yalumba, one of the Wine Curmudgeon ?s favorites. The company dropped its list price from $12 to $10 in the U.S. on its Y series, boosting sales 300 percent in the process. Americans buy wine on price ? and if it ?s quality wine like Yalumba, they ?ll buy more of it.

Winebits 248: Climate change, grape supply, and grape supply

? So long, Napa: W. Blake Gray interviews perhaps the world ?s leading wine and climate change expert, who predicts that California ?s premier grape growing region could no longer be that by 2050. Gregory Jones of Southern Oregon University told Gray that if if global warming projections are accurate, Napa will be too hot to grow fine wine grapes. Wrote Gray: ?[Jones ?] says only in the U.S. does he face resistance to the concept of climate change, although he said in many cases wineries deny global warming publicly while admitting their concerns to him privately. ?

? Yet another bumper harvest: The 2012 California wine grape crop could reach 3.7 million tons, the second-largest ever, according to an estimate from a growers ? group. So much for that grape shortage, eh? That would be a 10 percent increase over 2011 and 13 percent over 2010. If true, and given the near-record number of imported grapes coming into the U.S., wine prices should remain flat again next year.

? So long, China: Remember how the Chinese were driving fine wine prices through the roof? Remember how all the top wine producers and the Winestream Media were falling all over themselves to cater to the Chinese? That ?s just so 2010. Reuters reports that the biggest Chinese political scandal in decades, which has roiled the country and even threatened to delay a planned change of government, has knocked the top off the Chinese wine boom. Hong Kong Bordeaux wine sales, where many wealthy and apparently corrupt Chinese, buy their wine, are down 25 percent in value and 6 percent in volume.