Tuesday, January 17, 2006

More Cheap Aussie Wine...

Despite my defense of California's domestic market share, there is mounting evidence that Australian wines will continue to drop in price in 2006 as their supply glut continues. As [yellow tail] drops to $3.99 and Hills of Gold Shiraz hits $9.99, Australia will inevitably pick up some volume for a short period, but at what cost? Are they doomed to stay on the lower shelves of supermarkets next to Foxhorn and Forestville? Can they recover from this in a year or two as California is starting to do?

My sense is that they will, but that it will come at a cost and that cost will be their reputation. Once, I could find a multitude of small Aussie products on the shelves, now they seem dominated by Southcorp/Beringer's ever-growing portfolio of under $10 wines (Lindeman's, Rosemount, Wynn's, Penfold's, etc). This is a shame, as Australia makes some fine wines at $12 and up, they just seem harder to find.

As for California's market share, it will recover. Imports have been as high as 28% of cases sold (1985 & 2004) and as low as 15% (1995). Its all part of the ebb and flow of the growing wine market....


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