Saturday, July 16, 2005

Global (over)supply to continue/increase

Just when you thought perhaps the industry was coming back into alignment,
  1. Australia had a bumper crop in '05
  2. France is poised for yet another big harvest this year
  3. California may be looking at a larger than average harvest as well

So what's going to happen?

I think the civil unrest of vignerons and problems in the south of France will continue, though many of the higher end producers will be relatively "ok", as they are now. The Aussies will continue to try cutting the bottom out of the import markets in the US & UK, and the US will continue in it's offerings of low priced wines.

To the consumer the good times will continue, with value offerings from all over. Not so much for the producers though, who will be looking to trim their costs and maximize their sales. And potentially, the growers in all three regions will be hit hard again as prices won't rebound as many were hoping.

Also expect to see more 'debates' about issues and practices such as 'hang time', which adversely affect the growers' bottom lines - especially since the growers only real way to feel as though they have some leverage is to take those discussions 'public'.


Post a Comment

<< Home