EUROPEAN UNION-World Wine Production To Contract Only Slightly In 2009
Despite deteriorating global economic conditions, world demand for wine is likely to ease only marginally in 2009 as consumers shift to lower cost brands rather than significantly reduce their consumption. Larger stocks will partially offset lower production, so prices should not change significantly.
World wine production is expected to continue trending downward to 250 million hectoliters (HL), down about 5 percent in 2009 resulting mainly from European supply reductions, alleviating concerns about an oversupply.
• The EU is the world’s dominant producer. However, production is expected to dip to 151 million HL as a result of waning consumption and agricultural policy reform aimed at eliminating its oversupply and removing inefficient vineyards. The final implementation of the new EU wine reform is expected in August 2009.
• The United States is the second largest producer. As a result of a smaller grape crush, 2008 production is estimated down 5 percent to 24.6 million HL in 2007, but forecast to rebound to 25.3 million HL in 2009.
• Argentine production is forecast to ease marginally to 14 million HL due to a smaller grape crop.
• Australian production is forecast down almost 10 percent to 12 million HL due to drought, low prices, and high stock levels.