New Zealand relied on three export markets - Australia, Britain and the United States, the report found.
"Export prices for New Zealand wine are high and rising, almost double Australia's pricing and second only to France on the global stage," it said.
New Zealand Winegrowers chief executive Philip Gregan agreed New Zealand wine prices had been rising, but the global shortfall wouldn't result in a sudden surge. "There's always people that can do it cheaper and we're not at the cheap end of the market."
New Zealand wine exports were now worth $1.23 billon annually - expected to rise to over $1.3 billion by June 2014, he said. Sauvignon blanc, pinot noir and pinot gris had been the most popular varietals in recent years.
"And we're seeing out of places like China, growing demand for our red wines. It's cabernet merlot, pinot noir - those red wines for which New Zealand has an international reputation." The report showed "the background against which we're operating", Mr Gregan said.
"To run a sustainable business model in New Zealand for grapes and wine there's no option but to focus on the quality end of the market.
"There are plenty of other places in the world which can grow grapes more cheaply than New Zealand."
The report focused on "bottom-end wines" and "we're not at the bottom end of the market", he said.
The Morgan Stanley report said new world wines now accounted for 30 per cent of global exports, up from less than 3 per cent in the early 1980s.
"In the past couple of years, production declines have continued in France, Spain and Italy and new world production has peaked."
The French remained the largest consumers followed by the US, which with China had contributed most to the demand increase.