The Demand for Wine

A shortage of wine, the consumers demand outweighs the supply for the product, what will happen to the market?

The Supply of Wine cannot meet the Consumers Demand for the             Product.

Wineries and companies that can produce or have access to larger quotas of wine will be able to benefit in the market, ensuring good profits. This opportunity is due to the demand for wine that presently is high compared to the relatively low supply for the industry. In order to make a profit, suppliers need to carefully increase their quotas by growing more vineyards whilst the demand is high and still be slightly cautious, because lots of the suppliers who were previously in the market have left due to heavy losses, leaving voids for other wineries to take their place. The biggest barrier to overcome for the increase in quotas is that it takes three years for a grapevine just to bear a reasonable amount of fruit before it can be profitable.  Therefore there are time constraints, which can’t be adjusted in order to produce enough grapes to actually affect the wine industry immediately. Hence one would have to question the benefits of long-term forecasts in the wine industry before changing present production and financially committing to increasing present production costs.

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