The drought in Australia and consequent reduction in grapes harvested has been well documented. What has been less publicised is the lower volumes that have been seen this year across most of Europe.

Intelligence from Italy suggests that yields in Chianti are over 20% down. Sicily has been badly affected by mildew with some estimates suggesting that the harvest is down by up to 50%. Further north the key Pinot Grigio areas of Veneto, Venezie and Trento have produced lower quantities this year and, together with increased demand, this has driven pricing upwards.

The South of France has also been affected and as the Languedoc is often considered the biggest vineyard in the world this will have an impact on grape prices. The key white table wine producing areas of Charente and Gascoogne have been badly affected by poor weather, driving base prices ever upward. France overall is forecasting the smallest harvest in 10 years.

Where does this leave the customer? In the short term there will probably be little impact as wine sales were generally flat during our dreadful summer and producers are trying to clear tanks of the 2006 vintage. However as we enter 2008 and the 2007 vintage is needed, prices will inevitably rise. We are unlikely to be spared duty increases from the Chancellor in March so my guess is that we will probably see fewer and less deep promotions; or else somebody, somewhere is going to lose a lot of money.

It is another piece of bad news for UK consumers who are facing price increases for many commodity items such as bread, milk, eggs and cheese and with beer prices also on the increase where are they to turn for a little cheer? Perhaps this would be a good time to slightly change drinking habits and trade up, buying a more expensive wine, but drinking less often. There will proportionately be a lesser increase in more expensive wines and usually the extra cost does deliver a better flavour. This year we have launched a Rioja Reserva and a Premium Australian Shiraz at £4.99 and these are to be joined by a Medoc within the next fortnight. Although similar in style to our Claret at £3.29 it has extra depth of flavour and strength. Perhaps try the Claret with its screw cap for sipping midweek, and the Medoc at the weekend. I’ll raise a glass to that.