Wine market in free fall?
I'm seeing "specials" all over, by all major retailers ( NY & CA ).
That's not so unfrequent.
What IS unfrequent, however, is this peculiar combination of factors:
a) offers are for new releases;
b) we're not talking "en primeur" here, items are all in stock;
c) special price in U$S very close to European winery release price in Euros, even in some cases U$S price LOWER than Euro price;
d) provenance mostly France, Italy, Spain.
Question to insiders: is it as bad as it looks?
And now it's hitting even the auctions market!
This is from an email by Zachy's Jeff Zacharia circulated today:
"Wine prices have been lowering in recent weeks, and auctions are great places to get bargains on fine and rare wines. We anticipate great deals on wines from all across the globe at next week's auctions"
Hitting the AUCTION market is a different thing entirely. THAT makes sense. INdeed, it makes MORE sense -- it is, after all, "what the market will bear" and disposable income right now for most people is tight!
I have yet to see anything significant or out of the ordinary at RETAIL.
Some auction data already shows some slow down market (I read in Financial Times). I would think that top Bordeaux prices in the U.S. will decline due to the favarable exchange rate and the difficult vintages (i.e. 2006, 2007, and 2008). However, it should be noted that top Bordeaux prices went up so much higher since the 2005 vintage (100% - 200% for some top vintages like 1982, 2000, or 2005). On the other hand, prices of top California wine have not gone up that much compared to Bordeaux. The demand may slow down but typically top California producers have not adjusted prices in the past economic slow down (i.e. 1991/1992 or 2002/2003). But I see some wine retailers are cutting some prices or try to clear inventory.
Are you talking about a specific price category?
Chain store data indicates that overall, US wine sales have increased over the last 12 months, up 7.6% in $$, and 5.8% in cases, meaning on average, the US consumer is spending more on wine this year than last .
Domestic wines are up more than 7%
French wines are up almost 11%
Italian wines down 1.5%
Spanish wines down 6%
Australian wines down 2% (this is a big 2%)
Anecdotally, I have heard from a number of high end CA producers, and importers that on-premise sales are suffering, and this is where we typically see things slow down first.
I think it's a little premature to be talking free fall. But if you see any great deals out there how about sharing a post!
re: Sam B
Some examples from actual retail purchases in the last couple months. Prices are per bottle (before tax), no minimum qty required.
1) 2004 Philippe Delesvaux Coteaux du Layon "Sélection des Grains Nobles" 500 ml. Winery price € 30, U$S reg $75.00, purchased in July at K&L Hollywood for $28.99
2) 2004 Rayas Chateauneuf-du-Pape Réservé, both white and red. Winery price € 75, U$S reg $140, purchased August at Wine House LA for $76.00
3) 2003 Giovanni Rosso Barolo Ceretta. Winery price € 40.00, U$S reg 75.00, purchased August at Zachy's NY for $39.99
These are basically random picks from 3 major retailers, the list goes on and on.
It looks like you are refering to are European wines. If that's the caswe then I am beginning to see a decline in pricing.
Now, if only those VERY FEW California mailing lists that allocate to me would go along with what you see, then I'd be pleased. Unfortunately, the ones that I get allocations on seem to just increase pricing at will. I dropped out on many lists because their pricing just keeps creeping up and all did was hasten my taste evolution to the Old World stuff which, duh, I had always found to be better anyways.
I wouldn't call it free fall.
American consumers are spending less overall, and wine is often seen as a luxury item, rather than as a substance essential to one's being.
In spite of the euro/dollar comparison, Europe has for several years been in what has been termed a recession. There's also been an overall drop-off in wine consumption, though some think this is more related to health issues than the economy.
My guess is that the American wine market will really be hit next year, when the nation hasn't recovered from its unofficial recession, and the 2007 and 2008 vintages will be markedly higher in cost. Making wine (actual winemaking, bottling, aging, distributing) this year cost a lot more than last year -- fuel costs a lot more, but so does water and electricity and all sorts of little things like wire for trellising. All that will show up in the bottle price.
Sales of ultra-premium wines have never taken a hit. The sales of those expensive wines are impervious to economic fluctuations.