Consumers should expect higher prices for their wine -- especially their plonk.

The Organisation of Vine and Wine in Paris reports that global production will drop more than 8 percent, due in part to poor weather in Spain and France. California production is actually up, but bulk wine from Europe will be in short supply. At the same time consumption is up nearly 2 percnet. Short supply and high demand invariably leads to higher prices.

I think this problem will be compounded by wine giants, such as Treasury Wine Estates, Constellation, Gallo and Kendall-Jackson, scarfing up smaller properties and vineyards. They will leave little to fledgling producers. This will lead to additional vineyards being planted in less the ideal locations. I see it happening already with growth in hot regions, such as Lodi.

California has an upcoming ballot referendum that will curb vineyard expansion. If the measure passes, vineyard property prices will rise -- and so will bottle prices.