Economic Exposure

As basic research for the model, economic exposure was needed. The collected data is presented including wine production per year from various sources such as FAO, WineInstitute, OIV and own estimates.

Wine regions and production
Direct GDP for the wine industry in each country in million USD
Percentage of the GDP derived via the wine industry in each country
Capital stock associated with the wine industry in each country

Combined Risks

Combining the impacts of all natural hazards that occur in a wine region, a general risk index has been created for each region. This is based on the areas with the highest risk as well as the main threats have been seen.

Highest Risk due to Natural Hazards in Wine Regions Overall:

  1. Mendoza, Argentina and San Juan, Argentina

  2. Kakheti & Racha, Georgia

  3. Cahul (Southern), Moldova

  4. Slovenia (Primorje – West)

  5. Yaruqui Valley, Ecuador; Nagano, Japan

Top 5 biggest wine producers and their main threats:

  1. Italy – 4.9 billion litres (2016, OIV) – Hail, frost and earthquake (although volcano, flash flood, flood and climatic effects also can play a role)

  2. France – 4.2 billion litres (2016, OIV) – Frost, hail, storm

  3. Spain – 3.8 billion litres (2016, OIV) – NW Hail, Frost, Heat

  4. United States – 2.25 billion litres (2016, OIV) – Frost, Earthquake, Storm

  5. Australia – 1.25 billion litres (2016, OIV) – Frost, Storm, Hail, Bushfire

 

Climate Change

Climate change affects the variability of storms and also, depending on which global climate scenarios are used, an increase in average temperature will often be seen. Using down-scaled 4.5 degree (RCP4.5) average shifts across the globe over the next 50-60 years, a general shift of wine growing regions southward and northward will occur, and perhaps the loss of some wine regions closer to the equator, yet technology and a reduction in frost may improve matters.

Top 5 negatively affected broad wine regions for climate change using a limited scenario set (however, all are shown to have a decrease in frost days; and new varietals are being discovered):

  1. Southern Italy, Southern Spain

  2. Egypt & Merti Jeju, Ethiopia

  3. Northern Mexico

  4. Southern India

  5. Northern Argentina, Southern Brazil

Top 5 positively affected broad wine regions for climate change (only based on temperature shift, frost day reduction to varietals available):

  1. Northern Europe

  2. Canada and northern USA

  3. United Kingdom

  4. Tasmania, New Zealand

  5. Northern China

Storms & Floods

The effects of floods on vines are being explored in the wake of losses such as Swan Valley in Western Australia in March, and significant losses in South Australia and NSW among other floods globally, such as the infamous 2002 floods in France, Greece, Germany and other parts of Europe.

With tsunami and storm surge inundation on coastal wineries, the global risk software package, Tsupy, created by Andreas Schaefer of KIT, has been used to check the inundation potential of cyclone and tsunami events, with most wine regions globally being at very low to no risk but with a few surprises such as Tahiti.

Top 3 broad wine regions for Storm/Flood:

  1. Japan

  2. Viet Nam

  3. South Eastern USA

Frost

Frost is traditionally the number one hazard threatening vineyards. Although it can be controlled through fans, sprinkler system and/or heating using fire drums, it costs huge losses every year for the wine industry through unexpected and rapid temperature drop after bud break.

Hailstorms

Hailstorm are one of the largest yearly natural threats to European winemakers. The traditional wine countries like France and Italy have seen huge losses in the past 5 years due to hail and frost. The hail losses from 2012-2016 in some vineyards totalled 50-90% of the value of the crop, causing millions of Euros in losses, and long-term damage to many old vines.

It is not just these regions in France and Italy which are affected by hail. It is prevalent across most wine growing regions globally with at least 1 event per year of varying sizes; and depending on which phase of the growth, can cause damage to the single vintage or multiple vintages by damaging buds, leaves, grapes or the vines themselves, often needing special treatments or much additional work to save a proportion of the crop.

Top 5 broad wine regions for Hail:

  1. Mendoza, Argentina

  2. Piedmont & Italian Alps, Italy

  3. Cahul, Moldova

  4. Georgia

  5. Aragon, Spain

Bushfires

Bushfire risk causing smoke taint issues to vines such as in South Australia have been examined; however, smaller scale studies are required before they can be included globally in the index to a great extent. Studies are currently being undertaken by Prof. Robert Burford at UNSW and Assoc. Prof Trevor Daniell at the University of Adelaide into bushfire, smoke taint and other issues.

Top 5 broad wine regions for Bushfire:

  1. South Africa (Orange River, Olifants River)

  2. Portugal (Alentejo, Alto Tras-os-Montes)

  3. Chile (Valparaiso, Bio-Bio)

  4. Australia (Tumbarumba, Yarra Valley, etc.)

  5. Kazakhstan (South), Moldova

Earthquakes

Earthquakes have the ability to knock out the infrastructure of entire wine regions for a number of years. From 2010 to 2017, several earthquakes have struck the wine industries of Chile, New Zealand and USA among others. Over 125 million litres were lost in Chile in 2010, mainly due to the failure of steel tanks. Small earthquakes globally cause many losses not only to the structures, but also to the contents including bottle breakage and non-structural elements of a winery, such as tanks, chemicals, equipment and barrels. Tasting rooms and the rare wine collections of each winery are often those most at risk, with a small earthquake having the ability to cause irreplaceable financial and historical loss.

Top 5 wine countries/states for Earthquake:

  1. California, USA

  2. Chile

  3. Japan

  4. Turkey

  5. Greece and Albania