WinEconomy

The Harvest issue of the Wine Spectator from last fall cited that Napa Valley Cabernet grapes at the 2008 harvest averaged $4,678 per ton; the projection for the 2009 harvest was for an average of under $2,000 per ton. Last year at the beginning of the harvest in Sonoma County a winemaker we know well received a call from a grower offering him 5 tons of premium quality Cabernet grapes for free. The grapes had been under contract to a winery, but when the bank called the winery's line of credit they went bankrupt and were unable to purchase the grapes. Recently a local distributor dropped the prices on an entire import portfolio by more than 10 percent and in some cases by 20 percent.

Three pieces of anecdotal evidence that starkly illustrate the current state of the wineconomy and the result of an overall weak economy nationwide, taken together they point to some very good things for wine consumers. Retail prices for wines already in the bottle are dropping as wineries and wholesale distributors work feverishly to clear inventory they currently have in order to make room for the next vintage.

For wineries this is a must, as unreleased vintages already bottled represent a huge amount of invested and unearning capital. They are dropping prices to the distributors who then pass it on to retailers like wine shops and restaurants that then pass those price breaks on to you the consumer. The recent pricing of the Ehlers Merlot from California illustrates that trend. The wine dropped from$40 retail to $25 retail in one move!

At the same time wholesale distributors are choosing to drop prices to retailers on their own, taking a slimmer margin as they find themselves unable to move the inventory they already have on the books. The result is the same for you the consumer, which is good. The distributors though are forced to make these choices as they work to stay relevant with wineries and importers, while at the same time they are making the even tougher decision to drop some lines altogether.

Wineries are facing other tough calls. One of our favorite Walla Walla wineries recently pulled out of the North Idaho market altogether as they found the cost of distribution too onerous. Another trend is for wineries that have not yet bottled their wine electing to "bulk out" the juice to another bottler. Wine that is not yet bottled but already fermented is referred to as "negotiant" and will show up under another label. The result for consumers is a great one, as higher quality wine is available from premium producers at a fraction of the cost of the wine that bears their name.

Wineries that are better capitalized are choosing to start their own second labels as opposed to bulking the juice out to another purveyor. They are bottling on their own under another name in the hopes of selling the wine themselves at a reduced margin, but maintaining the hope of salvaging some of the investment.

These trends are all good for consumers as you have the opportunity to purchase the same caliber of wine at ever more compelling prices. How do you take advantage of it remains the question. First, ask your wine professional, or sommelier when you are dining out, if there are any new "second labels" that have come out from winemakers you like. Be specific and mention the wineries you like by name.

Also ask if any of your favorite wines previous vintages are being posted off or closed out by distributors. If there are some your wine merchant knows of, ask how many bottles are available. If it is a wine you really like after trying a bottle buy it in size, while it is a bargain right now. Once the older vintage is gone it is likely to go back up to the original price.

And finally the same old line you have heard from us so many times, continue to try new things. Especially right now stay open to trying things at lower prices, as there are some real bargains out there, if there has ever been a time to experiment a little this is it.

George Balling is co-owner with his wife Mary Lancaster of the dinner party a wine and table top decor shop in Coeur d'Alene. www.thedinnerpartyhsop.com .