According to OIV, “production levels were at a historic low” in Europe’s top wine producing countries of Italy (-23%), France (-19%), and Spain (-15%), caused by extreme weather events resulting in a premature harvest and reduced harvest yields across Europe. Germany and Greece also saw wine production fall 10% compared to 2016.
The US saw steady wine production levels for the first eight months of 2017, data showed, but the OIV pointed out that the wine production figures do not account for the damage caused by wildfires to major wine regions in California.
“This year, our vineyards have been badly affected by the impact of climate change and extreme weather events ranging from frost to drought,” Copa and Cogeca Wine Working Party Chairman, Thierry Coste, said.
Wine bottle prices to rise
In the UK, where the wine industry generates $26.3bn in economic activity annually, wine producers and consumers are bound to feel the effects of the increasingly challenging environment which follows the 3.9% alcohol tax imposed earlier this year, Miles Beale, chief executive of the Wine and Spirit Trade Association (WSTA), said.
“UK wine businesses have already had to contend with the sharp devaluation in sterling, rising inflation and uncertainty following the Brexit vote - all of which add cost to companies making wine available to the UK’s 30 million consumers,” Beale said.
“Prices for consumers will inevitably rise.”
The WSTA has called on Chancellor of the Exchequer Philip Hammond to freeze the country’s alcohol levy.
Positive production
However, wine production in other global regions was more positive, according to OIV data.
“In South America, wine production is likely to show quite an increase compared with 2016, despite the fairly low temperatures at the end of the year,” the OIV said.
Brazil has increased production levels by 169% for 2017 rising to 3.4mhl compared to 1.4mhl in 2016. Argentina also saw production grow by 25% rising to 11.8 mhl.
In Oceania, 2017 Australian production was up for the third year in a row reaching a sustained level of 13.9 mhl, up 6% compared with 2016. In New Zealand, production slightly declined in 2017 (-9%) to 2.9 mhl.
“Yet this was in reference to a record production the year before. It nevertheless remained high,” OIV said.
Wine quality and demand remain intact
Despite declining production due to weather, wine quality will not be affected, according to Coste.
"The quality of the grape is nevertheless expected to be very good across Europe which should make for an excellent wine," he said.
Market demand for wine is on a steady rise and OIV forecasts that global wine consumption will grow by 2.2% to 245.7 mhl for 2017 compared to last year.