World wine production in 2024 is estimated to be the lowest since 1961, even lower than the previous record low in 2023. While climatic conditions contributed to this result, there is evidence that wine-producing countries are starting to respond to prolonged over-supply conditions. This market bulletin looks at whether the reduction in global supply is likely to lead to improved market conditions – and higher prices – for wine and winegrapes in Australia.
Vintage conditions in 2024 were generally challenging
Vintage 2024 was characterised in the northern hemisphere by extreme climatic conditions ranging from severe drought to heavy rainfall and destructive storms. Consequent vineyard damage and disease pressure contributed to lower crops.
According to preliminary figures from the OIV[1], France saw the largest fall in production, down 23 per cent compared with 2023 to 3.7 billion litres. This saw it lose its position as the largest wine-producing country, dropping to second place below Italy, which increased its production by 7 per cent to 4.1 billion litres, despite widespread adverse weather conditions affecting most regions. Spain fared the best of the major northern hemisphere producers with an increase of 18 per cent compared with 2023 to be close to its five-year average of 3.5 billion litres.
The USA maintained its usual consistency, with a harvest of 2.4 billion litres, just 3 per cent below the previous year and 1 per cent below its five-year average.
In the southern hemisphere, Argentina and Australia both saw increases compared with their record-low 2023 vintages, but were still below average. Argentina regained its position as largest southern-hemisphere producer with 1.09 billion litres, an increase of 24 per cent compared with the previous year, whereas Chile – last year’s number one producer for the southern hemisphere – declined by 15 per cent to 0.9 billion litres, falling to third place after Argentina and Australia. South Africa also saw further declines below the 2023 harvest after multiple negative seasonal events including major flooding.
Global wine production in 2024 was the second successive record low
While some of the major wine-producing countries saw an increase in production in 2024, all were below their five-year average (Figure 1), and the combined result – largely driven by France – was a further reduction of 2 per cent compared with the previous record low of 23.7 billion litres in 2023 to 23.1 billion litres (10 per cent below the five-year average and the smallest recorded since reporting began over 50 years ago in 1961).
Figure 1 - Comparison of vintages in 2023 and 2024 with the five-year average – world’s largest wine-producing countries
While the OIV attributes the low vintage primarily to seasonal factors, it also notes that ‘economic and market circumstances’ have played a role.
It is hard to determine accurately what adjustments have been made by growers and winemakers in terms of reduced production, harvesting on the ground or mothballing vineyards. The distillation program in France following the 2023 vintage was expected to reduce wine supply by 300 million litres, but has not been repeated (as yet) in 2024.
In terms of long-term adjustments to vineyard area, figures from the 2024 OIV report[2] indicate that the world’s vineyard area has declined by around 175,000 ha (2 per cent) over the past four years to 7.2 million hectares[3]. While this is a very small reduction in percentage terms, there is evidence that the trend may be accelerating, with Ciatti[4] reporting that Chile has removed up to 20 per cent of its vineyard area over the past three years and that over 10,000 ha have been removed in California in 2024, while 27,451 hectares (3 per cent) are due to be removed in France in 2025.
Global production is still expected to exceed consumption
Despite the record low vintage, total global wine production is still expected to exceed consumption[5] in 2024.
Global wine consumption has been falling consistently since 2017, apart from a small uplift in 2021 associated with the COVID-19 pandemic. International alcohol data and insights company IWSR estimates that wine consumption will decline globally by 2 per cent in 2024. Applying this figure to the OIV figure for 2023 of 22.1 billion litres gives an estimate for world wine consumption of 21.7 billion litres in 2024.
If proven correct, this will mean a global surplus in the order of 1.4 billion litres – more than Australia’s total annual wine production (Figure 2).
Figure 2 - Global wine production vs consumption over time
Source: OIV, IWSR
Little evidence of strengthening demand for wine on the global market
The continuing surplus production, along with reportedly significant carryover stock of red wine in 2024 in most of the major wine-producing countries including Argentina, California and Australia[6], mean that the global wine market remains soft. The Ciatti bulk wine prices reflect this, with offer prices for most countries showing very little improvement in 2025.
For reds, there has been a small improvement in the bulk wine price for Australian wines (and to a lesser extent Chilean wines) in the months since April 2024, when the China tariffs on imports of Australian packaged wine were removed, reflecting the expectation of an increase in sales. However, the prices remain below where they were four years ago (Figure 3).
Figure 3 - Bulk wine offer prices for red wines on the global market by country
Source: Ciatti data in Wine Australia Grape Price Indicators dashboard
For whites, the small harvests in 2023 and 2024, along with a lack of carryover stock, have produced a shortage in supply of white wines globally, according to Ciatti – with the exception of New Zealand Sauvignon Blanc, which has been in good supply since two large crops in 2022 and 2023. However, despite this, there has been no significant increase in the offer prices for white wines on the global market (Figure 4).
Figure 4 - Bulk wine offer prices for white wines on the global market by country
Source: Ciatti data in Wine Australia Grape Price Indicators dashboard
Soft market conditions reflected in price forecasts for inland grapes in Australia
In Australia, the demand for white wine in 2025 and 2026 is expected to be stronger than for reds, as the stock-to-sales ratio for white wine overall is much lower (Figure 5), and generally in line with its long-term average – meaning that there is less carryover stock available – while the global supply of white wine is more constrained, and consumer trends are favouring white varieties and lighter styles. However, the recent strong growth in Australian wine exports to China, which are almost entirely of red wine, may affect this trend in the short-term.
Figure 5 - Stock-to-sales ratio for Australian red and white wine over time
Source: Wine Australia Production, Sales and Inventory Report 2024
The market conditions for wine are likely to be reflected in prices for commercial winegrapes. The latest ABARES Commodities Report (March 2025) forecasts a slight increase in prices for the major winegrape varieties from the inland regions[7] in 2025, with a further increase expected in 2026.
The reds (Cabernet Sauvignon, Merlot and Shiraz) are expected to increase by around 10 per cent in each year, but are still forecast to be below $400 per tonne in 2026, which is 30–40 per cent below their long-term average in real terms. The whites (Chardonnay, Sauvignon Blanc and Pinot Gris/Grigio) are not expected to increase by more than 4 per cent per year, with the exception of Chardonnay, which is expected to increase by 12 per cent in 2025 due to shortages following widespread frost in the Riverland early in the season. However, the prices are expected to be close to the long-term average for these varieties. This suggests that the supply and demand for commercial whites is largely in balance at the current settings.
It should be noted that ABARES expects the crush to stay at around 1.4 million tonnes for the next five years, which is well below the potential crush based on the current area of vines in Australia. This underlying excess potential production reduces the need for competition for grapes. While potential supply remains above requirements, and consumption continues to decline both globally and in Australia, these trends are not likely to change.
Wine Australia Global Supply Monitor 2024 (updated March 2025).