World production in 2007 will be the lowest for ten years.
In the Southern hemisphere in the first half of 2007, the grape harvest was expected to be of an average level (although falls in production of 25% were expected in Australia due to a major heat wave in January).
In the Northern hemisphere, most European wine producing countries have seen a noticeable decrease in their production. Is this the result of fluke climatic factors, or does it signal a long-term change in the wine sector? This article attempts to evaluate the 2007 harvest forecasts and compare them to those of previous years.
When evaluating the wine production in the early 2000, it seems a new trend is underway, with the effect of:
- climate change accentuating dry seasons (in Southern Italy, for instance) and diminishing water supplies (Australia)
- economical constraints. In the southern hemisphere, the drop in international quotas has led to an immediate reduction in investments and the stabilisation of production.

According to the EU’s latest estimations, the European grape harvest should be 170 million hectolitres in 2007, a drop of 14 million hectolitres compared to the average of the last five years, and 12 million hectolitres (-7%) compared to 2006.
The 3 main wine producing countries show a significant decrease: France 50,6 Mhl (-5%), Spain 40 Mhl (-12%), Italy 45,6 Mhl (-9%).
Some countries in Northern and Eastern Europe, however, show an increase: Germany 9,7 Mhl (+ 9%), Romania 5,5 Mhl (+13%).

 
By adding the 2006 OIV figures (Organisation Internationale de la Vigne et du Vin - http://www.oiv.org) to the 2007 forecasts from producing countries, we are able to make an assessment of global wine production and demand.
Regarding the 2007 production forecast, we suggest two hypotheses, those of minimum and maximum production – (this document does not take into account variations in stock each year). In terms of demand, we also propose 2 hypotheses regarding the industrial use of wine (brandy production, liquors, vinegars, etc.) One, on the safe side, of 35 millions hl, the other, perhaps more realistically, 40 millions hl. However, no matter which hypothesis is accepted for 2007, the demand for wine will be higher than the availability. The scale of the deficit depends on whether we use the 1.6 million hl or the 14.3 million figures. In other words, here at Vitisphere we anticipate that there will be a deficit of between 6 and 9 million hl of wine on the world market.
This unheard of situation is likely to lead to an increase in the price of production.The world wine market is likely to be unstable for a period, only this time because of under-production rather than over-production. This is not just a temporary situation – the market is entering a new phase:
- production settling due to climatic instability and economic slowdown that reduces investment
- rise in overall global consumption of wine
This new situation could finally signal the end of the wine crisis that has lasted for the last 5 years. The pressure is already apparent in the white wine market, for which global demand is increasing. It is already happening in the South of France for Sauvignon and Chardonnay wines. The market rate for rosé also seems to be changing - in Provence, in the South of France, prices are heading towards 65-70 euros for vintage Vins de Pays. As for the Cotes de Provence, the pressure is visible with prices increasing from 110 to 125 €/hl in 3 weeks, when in the early days of the campaign, they were around 95 €/hl.
Bruno Kessler, AFED president (Association Française des Embouteilleurs Distributeurs) says “prices must go up. However, we have to be sensible, although I do understand the urgency for certain French producers. It is vital that they remain within the market price for now.”
[source : Jacques BERTHOMEAU’s blog]