NEW YORK (Reuters) - Europe is in the midst of another crisis: not debt, but grapes. Yields are sharply lower, down nearly 40 percent in some of parts of Portugal, which means winemakers will have fewer grapes to blend and, in the end, fewer bottles to offer.
The situation is even worse in parts of Burgundy, where hail storms pummeled vineyards in Pommard, Santenay and Volnay destroying nearly 80 percent of the harvest, according to the Burgundy Wine Board (BIVB). When the growers were not fighting cold weather or hail, mildew and fungus threatened.
"People have been fighting them strictly," Cecile Mathiaud, a BIVB spokeswoman, said. Noting the uneven growth of the grape bunches, a condition known as millerandage, she said it "is bad for quantity, but it is usually the promise of quality."
One Portuguese winemaker, Bernardo Cabral, of Casa Santa Vitoria, echoed Mathiaud's forecasts, saying, "Fortunately, small berries are correlated with high concentration. So, at this moment, we have very high quality wines in process."
David Baverstock, the winemaker for Portugal's Esporao wines, who is about halfway through the harvest said, "There are cases of yields being down by as much as 40 percent compared to normal, probably it will turn out to be somewhere between 20-30 percent on average."
In the Loire, one of France's largest wine producing regions, they are just beginning to start the harvest, but they too anticipate lower quantities.
In Spain, the regulatory board of Rioja wines confirmed that its harvests would be smaller as well.
But "the good news is that consumers won't feel any effect of this lower-yields harvest as Rioja has sufficient reserves in terms of volume to fulfill global demand," a spokeswoman for the regulatory board said in an email.
Karl Storchmann, editor of the American Association of Wine Economists journal, said "it is safe to say the laws of supply and demand work on any market, including the one for grapes.
"However, if European grape prices are up, that doesn't mean that wine prices for consumers are up. Wineries," he said, "tend to keep their prices fairly stable. Not too much down in bad years, not too much up in good years."
At the Bersano winery, which has vineyards dotting the Piedmont region of Italy, winemakers said the intense heatwave combined with the low rainfall caused lower quantities of Pinot Noir, Moscato and Sauvignon Blanc to be picked. They are still waiting to see what happens with the Nebbiolo grapes - the ones used to make Barolo and Barbaresco - which will be harvested in a couple of weeks.
In central Italy, not far from the Adriatic Sea in the Marche region where the grape is Verdicchio, the winemaker for Umani Ronchi, Michele Bernetti described the harvest as "very challenging" and anticipated about a 10 percent drop in the quantity of grapes harvested after "one of the driest summers of the last 30 years."
Bernetti added that while he was concerned about the Verdicchio, he anticipated that the red wines from Marche and Abruzzo and Montepulciano would be of very high quality.
Greek winemaker Stelios Boutaris of Kir Yianni, said that July was the hottest since official statistics began in 1897.
"As a result, harvest was very early...Quantities (for the international varieties like Syrah and Merlot) were also down by at least 20 percent," he said. "But the extreme heat seems to have done wonders for the native grapes like Xinomavro."
Reporting By Leslie Gevirtz, editing by Paul Casciato