Oenophiles are worried. Between bad harvests in Europe and the fires raging through California’s wine country—not to mention low production in the southern hemisphere—wine is expected to be in short supply.
The wine shortage will almost certainly lead to higher prices, which could cut into consumption of what wine there is.
“We…foresee a dramatic decline in wine availability going into 2018,” Stephen Rannekleiv, a global beverage strategist at Rabobank, told CNNMoney. “We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers.”
According to the European Commission, this year’s grape harvest is expected to be the worst since 1982. Production dropped 14 percent from 2016, to a mere 14.5 billion liters of wine. Production in Italy will drop by 21 percent, while production in Spain and France will be down about 15 percent.
“It has not been uncommon for one of these three producers to have an off year, but rarely have we seen such poor harvests for all three simultaneously,” Rannekleiv said of the wine shortage.
And then there’s California, the world’s fourth largest wine producer. News reports are saying that the wildfires in Napa, Sonoma, and Mendocino Counties may be among the worst, most destructive fires in the state’s history.
It’s not clear yet how the fires will impact the 2017 vintage, but they’re certainly exacerbating the wine shortage. The Napa Valley Vintners trade association said in a press release, “We are assessing information on how the fires might affect the 2017 harvest and the wine industry specifically, but it will be some time before we have any specific information along those lines.”
If there’s any good news, it’s that by mid-October, most varieties of grapes have already been harvested. The exception is specific varieties like cabarnet.
The trouble is that even if the grapes were already harvested, some wineries and grape vines have burned to the ground. Some of those grape vines date back to the 19th century, and they will be impossible to replace. And depending on how widespread the destruction is, it could mean a severe shortage of grapes for years to come. Even if new grapes are planted, it can take three to five years for the vines to start bearing fruit, so there’s going to be a wine shortage in Northern California for years to come.
Wineries also store several vintages in barrels, and those wines could be tainted by smoke if they’re not destroyed completely. They also store large inventories of bottles.
European vineyards suffered from heavy hailstorms and frosts in the spring. And those that were spared were later damaged by severe droughts. Because the weather has been unusually warm, that has led to decreased yields as grapes ripened early and were smaller than usual.
The wine shortage is already causing prices to rise. Some varieties have already increased in price by up to 10 percent.
Typically, wine makers produce a surplus, which in 2016 was around 2 billion liters. But “if Italy, France, and Spain are all down, it will bite into this surplus and it is possible that we will see shortages,” said Richard Halstead, co-founder of market research and consultancy firm Wine Intelligence.