Wine 2023: Surplus? Or Shortage?

1. Wine 2023:Surplus? Or Shortage? Dave Chambers Wine Marketing Enterprises, Inc. November 8, 2013

2. “And In This Corner” “Shortage!” (Oct 22nd report) • Australian Analysts Tom Kierath and Crystal Wang • Global shortage of 300 million cases

3. “And In This Corner” “Hogwash!” • “Industry’s in fine shape” Jon Bonne, SF Chronicle • “Just offsetting over-supply” Rob McMillin, SVB • “Supplyto vary by price point” Intl Business Times

4. Evidence Of Shortage • Growing demand • China • Gen X, Millennials • Shrinking vineyards • Global inventory depletion

5. Growing Demand

6. Growing Demand - China

7. Growing Demand – By Age

8. Shrinking Supply

9. Global Inventory Depletion

10. Round 1 – Shortage!

11. Not So Fast!

12. Round 2 – The Rebuttal • “The Morgan Stanley’s report is just wrong”(Rob McMillan, Silicon Valley Bank) • “Global production at its highest in 7 years”(Intl. Org of Vine & Wine, (OIC) France) • “Bulk wine prices are stable… there is no shortage” (Rabo Bank, New York) 10-31 SFGate.com WSJ Market Watch

13. Rebuttal – Alternate Demand

14. Rebuttal – Surplus Product CBC News July, 2013

15. The Winery? Treasury Wine Estates • The total write-off was $145 million, USD (WSJ, July 15, 2013) • “We overestimated U.S. Demand” • Stockholder lawsuit pending • Oct 31st - BofA/Merrill Lynch urges Treasury to Divest of Beringer ASAP (Wine Industry Insight)

16. Rebuttal – Interest Conflict The spinning of looming shortages to promote wine stocks… could work again for those unfamiliar with the public wine stock frenzy/crash/burn of the 1990s. That debacle was driven by a similar shortage myth, [creating] a huge wine tsunami in 2001. Wine Industry Insight 10-31-13

17. Rebuttal – Interest Conflict • What bank lists Treasury Wine Estates as their top “consumer pick”?

18. Rebuttal – Interest Conflict • Morgan Stanley, of course. • Analysts were not made available for comment

19. Wine Shortage Knockout?