Wine Producers Hit by Low Harvest

Wine lovers should prepare for a historically low grape harvest this year, according to the International Organisation of Vine and Wine.

The 2012 wine production estimate of between 243.5 million hectoliters and 252.9 Mhl would be the lowest level since at least 1975, according to the organization. A reduction in vineyards in certain OIV member countries and poor climate have affected wine production.

The main European wine producing countries of France and Italy are expected to show a significant decline in output compared with 2011. The only EU countries with an expected increase in wine production are Portugal and Greece, but only in comparison to a so-so 2011 harvest. Argentina's output is expected to fall by 24% over last year.

Not all is gloom and doom. Chile's output has grown by 15.5% since 2010, and South Africa's production has increased by 4%. U.S. production grew sharply in 2012, up 7.1% over last year's modest harvest.

The jury is still out on wine consumption for the year. An uptick in wine sales in 2010 held some promise for the industry after several years of decline, the organization said. But things could go either way for 2012. Estimates range between 249.4 Mhl -- close to the very good 2007 levels -- and 235.7 Mhl -- a sharp drop to below 2003 levels.

Dan Radovsky is a Fool contributor. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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