Posts Tagged ‘Supply’

 

 

Undersupply replaced a decade-long era of oversupply with autumn 2012’s harvest and the inevitable prices hikes will hurt the entry-level market. Meanwhile global demand continues to rise.

TWEETS OF the “OMG! We’re going to run out of wine!” variety greeted reports in the autumn of 2012 that grape harvests in the Northern Hemisphere had widely fulfilled predictions of shortfalls across a sweep of major wine-producing regions. This compounded earlier Southern Hemisphere shortfalls at a time when global consumption is growing. Without question, the headline figures made for sobering reading, especially after a decade or more of oversupply being the norm.

As 2012 European harvest volumes were confirmed, the International Organisation of Vine and Wine (OIV) estimated that total global output had fallen from 264.2 million hectolitres in 2011 to 248.4m hl in 2012, representing the lowest level since 1975, when the body began tracking these figures.

 

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Good news, or bad?

Good news, or bad?

 

Report highlights falling production, increasing prices, and a trend towards consolidation in the global wine industry.

Consumers should brace themselves for rising wine prices in 2013, with wine production falling to a five-year low and producers starting to raise their prices.

While oversupply conditions have characterized the $102.2-billion wine industry in recent years, keeping wine prices low and damaging the wine industry’s profitability, that’s starting to change, says a report by U.S. market research firm IBISWorld.

Global production has fallen during the past five years at an estimated 1.8 percent annualized rate to 248.2 million hectoliters in 2012. Much of this production decline occurred in Europe, because the European Union offered incentives to growers to reduce winery acreage, and removed distillation subsidies, which supported unviable producers.

IBISWorld reports that this… read on