Wine Prices Headed Higher For Consumers, Report Says

NEW YORK, April 17 (Reuters) - U.S. consumers are going to be faced with a choice this year: pay more for a bottle of domestic wine, settle for lower quality, or buy cheaper imports, the Silicon Valley Bank forecast on Tuesday.

SVB, a commercial banker to the wine industry, said in its latest "Annual State of the Wine Industry Report" that it expects vintners to raise prices as the supply of grapes declines and evolves "into a state of shortage that will last for some time domestically."

"We hope you stocked up on a few cases because reality is knocking at your cellar door ... inventories are now starting to run to the short end of the scale, and bottle prices will start to increase in 2012," the report said.

Prices for California wines will be the first to rise, followed by wine from Oregon and Washington State, according to the report.

And just as many of the world's central bank reserve managers have cooled on the euro's outlook, so too has SVB. Prices for European wines, especially those from Spain and Portugal, should decline as a result, SVB forecast.

While SVB predicts 2012 sales growth for the industry at 7 percent to 11 percent, a slight drop from 2011, it also foresees declining "wine quality for the price paid, pushing consumers to decide if they are willing to drink lesser quality domestic wines, or pay higher prices, or find foreign substitutes."

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Comments

[Hoodooman]

11:38 AM on 04/30/2012

I'll make my own.

[smmrselysummers]

11:34 AM on 04/20/2012

Oh well, I was drinkning too much anyway. :(

[SimonBao]

09:53 AM on 04/20/2012

HuffPost, this article is a total FAIL. It may be the fault of Reuters, but come on. Don't repost stuff that is this poor.

How can one post an article that says wine prices will go up as the supply of grapes declines... and fail to explain WHY the supply of grapes is declining?

I can think of a dozen reasons why the supply might be declining, but it takes only a single sentence for the article to say which is right.

[LibertarianCentrist]

07:12 PM on 04/21/2012

The 2010 and 2011 Vintages in California were BOTH Very difficult vintages, with FAR less than normal Yields. Issues with Rain, either too much at bad times, or not enough, too much heat, or not enough heat.. The lower yields raise the price of Bulk fruit as well as lowering the supply for estate grown products.

[SimonBao]

06:02 AM on 04/22/2012

Well that *may* be, but then that would only cause significant price rises in California wines.

Just yesterday I heard an extended news story on the radio about how wine prices are plummeting in the US. Falling.

How can that be? Easy, the story was about wines from Greece, Italy, Spain, and Portugal. Places where wine is being produced as before, but the national economies are in such peril that national demand for wine has plummeted. Leaving quite a surplus to ship to the US and elsewhere, to be sold at rock bottom prices. The stronger dollar is even forcing prices down for French wines.

So, someone writing that wine prices are going up, without explaining why, at the same time that others are reporting that wine prices are going down...

Welcome to HuffPost, the BizarroWorld of Detail-Free Journalism.

[shortguy54]

09:06 AM on 04/20/2012

I just got back from a trip to the California wine country (Sonoma Valley). The wine was ok, but the prices were absurd (usually 25-35 bucks). Here in Germany I get excellent wines for less than 10 euros.

[Hoodooman]

11:41 AM on 04/30/2012

That would be because there are far more pressures from our state and federal government.

[captainkennedy]

11:01 PM on 04/19/2012

For those who believe local wines are always more expensive than imports, I suggest reading this important work published in 2009 which debunks that very notion:

http://ageconsearch.umn.edu/bitstream/99488/2/Factors%20pg%2016-30.pdf

[captainkennedy]

10:56 PM on 04/19/2012

"Domestic" doesn't just imply California..Not even just Oregon or Washington. One can find local wines in all 50 states - many of which are quite delicious and are good values. Try thinking outside the box of California and west coast and you may be surprised what you find. Wines from Europe are not getting any cheaper either. Buy local!

[Karl Wilder]

02:30 PM on 04/19/2012

As much as I try to eat and buy local I may go with imports.

[PunisherWarJournal]

02:19 PM on 04/19/2012

"pushing consumers to decide if they are willing to drink lesser quality domestic wines, or pay higher prices, or find foreign substitutes."

Soon, even our wines will be "Made in China".

[BuckyJamesDio]

03:55 PM on 04/19/2012

"Hmm, nice bouquet, pleasantly dry with hints of lead and melamine ..."

[LibertarianCentrist]

07:12 PM on 04/21/2012

There are Chinese wines on the market, they aren't very good..... yet.... They will get there.

[IndyvoterRob]

04:02 AM on 04/19/2012

Nice manufactured shortage there. There are tens of thousands of wines from nearly every country on Earth yet we are in a shortage?

B.S.

Oh well I drink the ten buck stuff anyway.

[heboprotagonist]

11:55 PM on 04/18/2012

Like a California Pinot Noir? Try a Chilean Carmenere.
Prefer Napa Cabernet Sauvignon? Try a Argentinian Cab Franc.
Like Buttery Chardonnay? I can't help you.

I could do this for days.

[LibertarianCentrist]

04:41 PM on 04/26/2012

Except that Cali Pinot and Carmenere are TOTALLY different...

[heboprotagonist]

05:40 PM on 04/26/2012

I can't tell if you are being sarcastically caustic or sarcastically indifferent.

[NAMU2010]

08:47 PM on 04/18/2012

American wines in many cases are already priced at levels above what they are worth. There are many foreign wines that are better value for the buck.

[shankapotomus]

08:18 PM on 04/18/2012

Why not go ahead and add everything else the new taxes are going to cost us.

[InVinoVeritasBC]

05:24 PM on 04/18/2012

I rock the Vella or Franzia already, so I'm cool!!

[PunisherWarJournal]

02:18 PM on 04/19/2012

Great name.

[LibertarianCentrist]

04:44 PM on 04/26/2012

Watch the price increases on the boxes.... they've already begun