The Agriculture Ministry puts wine output 14 percent lower than last year, but the latest figures only reflect data from June and farmers say they overshoot.

In some parts of the Penedes wine area in the northeast, the crop will be half as big as last year's, the local growers' association estimates, and in Ribera del Duero -- one of the most prestigious areas -- growers estimate a 40 percent drop.

However, the drought has its advantages for quality as diseases and fungi struggle in dry weather, growers say.

Usually when the harvest is small the quality improves and in the past, small good quality harvests have brought higher prices.

"As a general rule, a hot, dry year brings a small harvest of good quality," Sanchez said.

But a second year of drought could permanently damage the vines.

The harvest usually starts in early September, although farmers could start earlier this year to avoid damage from high temperatures, said Bienvenido Amoros, crop expert in Castille-La Mancha, where half Spain's wine comes from.

Still, fans of Spain's best known wine Rioja can rest easy. Producers say La Rioja is a kind of micro-climate because of its geographical position and Luis Zapatero, chairman of wine makers Bodegas Riojanas, does not expect drought damage or price spikes.