New figures reveal that global wine production is anticipated to drop to its lowest level in over fifty years.
The International Organisation of Vine and Wine said that droughts and frosts across Europe in 2017 have seen grape crops hit badly.
It says that in the European Union, extreme weather conditions “significantly impacted 2017 wine production,” which was historically low.
While Italy confirmed its place as the world’s leading producer for the third year running in 2017, its production will drop 23 percent to 39.3 million hectolitres.
France will observe a 19 percent decrease to 36.7m h/l, while Spain will observe a 15 percent drop in production to 33.5m h/l.
A hectolitre is equal to 100 litres, equivalent to around 133 standard 750ml bottles.
Romania (5.3 mhl), Portugal (6.6 mhl), Austria (2.4 mhl), and Hungary (2.9 mhl) were the only countries to record an increase compared with 2016. After two previous weak harvests, Romania went back to a high level of production.
However, outside of Europe, the picture is less disturbing, with Australian levels up by 6 percent and significant increases in the wine production of South America.
The United States was expected to experience a slight dip, even though the figures were collected before recent wildfires destroyed the Californian wine country.
The OIV says, however, that on a global scale, wine production will drop to levels that were not seen since 1961. The output is expected to drop to 246.7 million hectolitres in 2017, down 8 percent from last year.
The OIV says that reduced global production may dissolve a surplus over demand seen in recent years when consumption was restricted by the effects of the world financial crisis in 2008.
The effect of the drop in actual market supply and prices depends on the quality of wine in landmark regions and the levels of stocks from previous years.
Thierry Coste, chairman of the wine union of the European Union, Copa-Cogeca, stated: “The quality of the grape is nevertheless expected to be very good across Europe, which should make for an excellent wine.”
However, higher quality grapes could observe prices increase at the lower end of the market.
Last week, a report from analysts at Rabobank warned about the knock-on effect of a decrease in production.
“We still foresee a dramatic decline in wine availability going into 2018,” stated the global beverages strategist at Rabobank, Stephen Rannekleiv. “We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers.”