Tuesday, November 5, 2013

Economy: Should Wine Lovers Be Scared?

(Drivebycuriosity) - Wine lovers should be scared, says the online magazine Quartz (qz.com). They claim "that a global shortage of wine is fast approaching". The article is based on a study by the investment bank Morgan Stanley. Their authors presume that global wine production has begun to shrink and refer to a declining wine output from the three largest wine-producing countries—Spain, France and Italy. Otherwise "the US and China, in particular, have been drinking more" .

The story reminds of the dire predictions from Thomas Robert Malthus (wikipedia). The British cleric, who lived until the early 19th century, predicted that the world will soon run out of food because farmers would not harvest enough to feed the rising global population. He ignored that anytime  something is running short its price will rise which induces producers to produce more. He also ignored technological progress that leads to more efficiency & productivity. 

Even though Malthus was wrong, a cult began called  Malthusianism that is still popular. In the 1970s the so-called "Club of Rome" predicted that the world would soon run out of commodities. In the recent years the doom-mongers announced that we would soon run out of oil ( peak oil  theory). Now Morgan Stanley forecasts peak wine. Lol.

If wine became scarce the price would rise. This again would induce vintners to plant more grape-vines. But I don´t notice any significant price rise so far. I still can get a fine bottle of wine for around $15 in a store in (expensive) New York City.

I have the impression that globalization is increasing the production of wine. Vintners, often from Europe, have been exporting their know-how to many places in the world. You can get a lot of fine & reasonably priced wine from Australia & Latin America (Chile, Argentina). The US offers not just Californian wine, you also can find delicious Chardonnay which was grown in New York, New Jersey and other states in the north east of the US. The other day I  enjoyed a Cabernet Sauvignon from Canada.

And more countries are joining the club of wine growers. Some of France's most prestigious wine producers, including Barons de Rothschild, have invested in Chinese vineyards (wine-searcher). Maybe the wine production in France, Spain & Italy is shrinking because some drinkers prefer more wine from the "New World".

And don´t forget global warming. Because of rising temperatures the northern frontiers for growing wine have been moving northwards. If the temperatures continue to climb, new regions in the north could be unlocked for growing wine.

Let`s drink on that - cheers.

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