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article imageExperts says there's no need to fear a global wine shortage

By Layne Weiss     Oct 31, 2013 in Food
"The world is facing a wine shortage" according to research by Morgan Stanley's financial services firm. But experts say there's no need to panic.
Research conducted Monday by Morgan Stanley said there is a "undersupply of nearly 300 million cases" of wine a year, CNN Money reports.
This is the largest shortfall of wine in almost 50 years according to various media reports.
Last year, wine production dropped to its lowest levels in over 40 years, BBC News reports.
While there are a million wine producers throughout the world making 2.8 billion cases of wine per year, it's just not enough to keep up with worldwide demand, Australia-based analysts Tom Kierath and Crystal Wang say. The two say that global wine consumption has been rising since 1996, but there was a drop between 2008 and 2009.
According to the Huff Post, in 2012, the global supply for wine barely exceeded the world's demand for wine.
The Morgan Stanley research suggests a wine shortage is upon us. “Data suggests there may be insufficient supply to meet demand in coming years, as current vintages are released," the report says.
Despite this research, analysts are saying wine production is actually increasing and consumption is stabilizing, The SF Chronicle reports.
Experts expect California's harvest will reach up to four tons.
They argue the world's wine industry is doing just fine and that the reduction in wine production is purposeful due to an excess in wine.
But most importantly, they say there is plenty of wine and that prices should remain steady.
"Morgan Stanley's report is just wrong," said Rob McMillian, executive vice president of Silicon Valley Bank and founder of its wine division. "In 2010 and 2011 we also thought we were trending toward a shortage in the United States, but 2012 was a record production year. This year is almost as big. Everything we're seeing is leading us to believe that there won't be enough tank space for all the production here."
The International Organization of vine and wine has released its own report on the matter predicting there will be an 8.8% spike in global wine production, it's highest in the last seven years.
"In Europe, after five modest consecutive harvests and an exceptionally low 2012 harvest, 2013 wine production may be qualified as relatively high," according to the organization's report.
Morgan Stanley analysts Tom Kierath and Crystal Wang have not commented on what these experts are saying.
Stephen Rannekleiv, a wine industry analyst for Rabo Bank in New York, said that at first it did appear as if there could be a wine shortage, but it didn't happen. He described analysis of the situation as "challenging," but said there's no foreseeable wine shortfall "looming."
Wine consumption is still on the rise, and vineyards are getting smaller, and China is the only country which continuously expands its vineyards. So will there be a shortage? To ease fears, Stephen Rannekleiv says, "All you have to do is look at bulk wine pricing, which has really been coming down, to realize there's no shortage."
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