Extreme weather has affected a lot more vineyards than expected making 2017 a tough year for European wineries. Due to the poor harvest, wine production of France, Spain and Italy are estimated to be cut by 15%-20% each. This means that the amount of European wines available on the market would be 14% less than that in 2016. For the Old-World investors, this might be the lowest yield vintage ever since 1982.
While Bordeaux and Burgundy are still worrying about wine shortage after the April frost, the recent wildfire across northern California has raised similar concerns over Napa and Sonoma. Although 90% of grapes have been harvested before the fire, the real issue is a potential hazard of future loss after such a wide damage to the grape vines.
If both Old World and New World cut production in 2017, a worldwide wine shortage would be foreseeable until 2018. According to International Organisation of Vine and Wine, we now have about 2 billion litres of wine in surplus. Not sure if that would be enough to rein in the market price from surging against a short of supply, but a number of Italian and Spanish bulk wines have already been on a price hike.