"Vineyards in France, Spain and Italy were plowed under, she (Alice Ferring) says, and housing sprouted where grapes had once grown. But since then, world demand for wine has increased. That, plus bad weather, has led to the present situation. After adjusting for non-wine uses (such as production of vermouth), says Morgan Stanley, worldwide demand now exceeds supply by 300 million cases: the biggest shortfall in the past 40 years."
This can only mean good things for Australia, especially considering the recent (2008) renewal of the EU-Australia wine agreement, which has helped reduce restrictions and increase acceptance for Australian agricultural practices.