Factors that influence the supply of wine: Production

Question 1

How does area under vine influence production size?

Answer 1

The more area under vine, the more wine that can be produced

Question 2

What are the different factors that have resulted in the gradual reduction of vineyard land?

Answer 2

• Vine Pull Schemes
• EU restrictions on new plantings
• Conversion of vineyard lands to other uses
• Abandonment of rural areas
• Humans
• Weather/Nature

Question 3

What caused ‘wine lake’

Answer 3

In the 1980s there was a lot of over production in the EU, leading to a surplus of wines

Question 4

How did the EU and national governments combat the over production of wine in the 80s?

Answer 4

They created Vine Pull Schemes that would pay growers to rip out poor quality vines

Question 5

What were the main countries/regions that vine pull schemes were aimed at?

Answer 5

• Southern France
• Italy
• Spain

Question 6

What other countries initiated wine pull schemes?

Answer 6

• Australia
• New Zealand
• Argentina

Question 7

What two EU policies were aimed at reducing the amount of wine produced?

Answer 7

• Vine pull schemes

- EU restrictions on planting new vineyards

Question 8

Even though there is a restriction on new plantings, what is the authorized amounts of new plantings?

Answer 8

• Planting of up to an annual growth of 1% of the vineyard area already planted

Question 9

What is the main reason that vineyards are converted to a different agricultural crop?

Answer 9

Wine grapes are a low value agricultural crop in many parts of the world compared to apples (South Africa) or almonds/pistachios (USA).

Question 10

What are some of the reasons that area under vine is dropping but overall production is increasing?

Answer 10

• Vineyard techniques such as irrigation being approved in different regions.
• Using more high density plantings
• different modern techniques (site selection, clones, canopy management, etc…)

Question 11

How does vintage variation in Europe affect global wine production?

Answer 11

Europe has over 50% of the worlds vineyard areas.

So in hard/bad vintages global production can drop. For example between the 2016 vintage and the 2017 vintage, there was a 14% decrease in production in Europe.

Question 12

How is long term climate change affecting the worlds wine growing regions?

Answer 12

There is an increase in weather extremes, so things that were maybe once a decade phenomenons are now occurring more frequently.

Examples would be:

• Prolonged heat waves
• Severe droughts
• Water shortages caused by the droughts
• Hail storms

Question 13

How do reduced yields affect the entire market?

Answer 13

If there are reduced yields, there is less wine. Which will lead to lower production, potentially causing a rise in prices. If prices rise some consumers may decide to go to a different product, especially if there is a drop in quality.

Question 14

Define what a GI is

Answer 14

A GI is a geographic indication that is given to a specific area of land. They come in a variety of sizes as well.

Question 15

Compare and contrast the AVA system versus the PDO system(s) of Europe

Answer 15

Similarities:

• AVAs and PDOs both help give regions recognition globally.
• Help set boundaries of where the wine can come from

Differences:

• AVAs do not have production limits, nor do they have grape restrictions
• PDOs also have winemaking and maturation requirements

Question 16

Aside from GIs defining a specific region, what is the other aims when using a GI?

Answer 16

To help define the specific style of wine from that region.

To hopefully bring supply and demand more in line as to reduce the risk of downward price pressure.

Question 17

Explain of how GIs can affect the selection of wines in a store using Cabernet Sauvignon

Answer 17

If a retailers customers are looking for inexpensive Cabernet Sauvignon, the retailer can select inexpensive Cabernet Sauvingon from all over the world.

But if the customers are looking for inexpensive Cabernet Sauvignon from Napa Valley or Columbia Valley, then the retailer is forced to buy from that region in particular.

Question 18

Can market demand put pressure on PDOs to extend the areas of production?

Answer 18

Yes, as in the case of the Prosecco DOC.

Question 19

What is the main negative associated with expanding PDOs/GIs?

Answer 19

When this happens, sometimes the expanded areas are less suitable sites, which can lead to an overall drop in quality.