Crisis destroys good wine. But not great

Several weeks ago, an active owner of Tuscan winery Fattoria di Petroio Pamela Lenzi confessed to me that the sale of Italian olive oil (no fooling, excellent), they sometimes earn more than the export of wine. “Especially hard in Britain. We tried to find partners there, and at first everything seemed to went well, but then they – bang! – And closed “, – said Pamela.


Wine importing companies and shops now, if not burst like bubbles, then warn about the sad results. Pretax profit giant wine retailer in Britain, the company Majestic, has fallen by more than twice their competitors Threshers and Wine Rack are planning to close more than 160 stores. According to research company Mintel, last year Britons purchased 2% less wine, bringing sellers at 1% less revenue than in 2007.

According to the forecast Mintel, wine sector in the country will not recover before 2011, and the level of wine consumption in 2007 will return only after 7 years. But can drink wine are less only in Britain?

This week’s monster of the world luxury group Moët Hennessy Louis Vuitton (in the portfolio of LVMH – brands Moet & Chandon, Dom Perignon, Krug, Ruinart, Veuve Clicquot and Chateau d’Yquem) stated that reducing revenue divisions of the company that sells wines and spirits by 17% in the first half of 2009. Falling net profit slightly earlier confirmed in Fortune Brands (Brands Laphroaig, Courvoisier, Teacher’s, Jim Beam).

The last review of the American wine industry from Silicon Valley Bank (SVB) – a creditor of many winemakers USA – discouraging. The general trend – the more expensive the wine, the harder it becomes to sell. Worse leave expensive wines $ 30 per bottle. People who had bought a bottle for $ 50, now prefer to buy 2 to 25. Late last year called the worst in living memory analysts SVB, and even this year with the increase in unemployment in the United States can not expect that buyers will once again begin to spend money on great wine.

Speaking of the great. Statement by Baroness Philippine de Rothschild at the current en primeur that up to half the product in 2008, Chateau Mouton Rothschild will be released to the market at a price of 100 euros per bottle, for many it was a shock: it is exactly half the price for which the wines were produced from the 2007 harvest . Others viewed the decision to the Philippines only common sense. Baroness herself as best she could, tried to dispel suspicions in a deplorable affairs producer, saying that lower prices did not reflect the quality of wine is simply an attempt to “get closer to reality.”

But the new reality for the wine industry seems to have been approached myself, regardless of their pricing policies. The question now is not whether a crisis will strike it on the wine industry, as in who will be able to recover from losses. In the case of the famous producers we can talk about curbing the ambitions. Astronomical prices for cult wines are unlikely to remain at the same level. If the crisis drags on, producers will have to cut prices, not only because of falling demand. Wine industry – conveyor, which can not be stopped by pressing the red button: whatever happened to the markets, the yield should be cleaned each year. In the worst scenario, winemakers may have to be almost at knockdown prices to sell premium wines, just to get rid of stocks. For the buyer with emaciated purse is, on the one hand, good news.

On the other hand, for the same buyer price fluctuations will mean that the ear will have to keep eyes open. Attempts to Bordeaux producers soberly assess the situation on the market and adjust prices on the wine harvest in 2008 has already caused a stir among the importers and revival among the speculators. First encountered in the need to somehow sell already purchased vintages, which are against the price of wine in 2008 appear to be overvalued. Following the Rothschilds of Bordeaux, many manufacturers have expressed willingness to market wine at prices five years ago – and this possibility many importers are not missed. Almost every day in my mailbox come proposals “beneficial to purchase a pair of newly emerged market accounts” Bordeaux 2008 – and often the price of one and the same wine vary by 20 – 30%.

The French themselves say that the financial crises in the world was much, and Bordeaux – the whole thing. Adjusting for the fact that the conversation is about the best producers, this – not a good mine with a bad game. Yes, in the case of expensive wine price bubble in times of crisis tangible blown away, but the stars survive the prestige and quality.

But the price of entry-level wine quality can fall – literally – to the price of water. Actually, in the crisis-affected wine overproduction of Australia is already happening: a local producer Dan Murphy sells wine for 1.99 Australian dollars per bottle, that some cheaper brands of mineral water.

If setting prohibitively low prices does not work, an extreme scenario for cheap wine is selling products in the distillate. A few years ago in Europe is already there. Journalists joked about spread further wine lake, but became the result of overproduction of wine simply destroyed.

Under the threat of destruction may not only cheap swill, but an entire class of producers of quality wines in the midrange. Such farms, as Tuscan winery Pamela Lenzi, for decades belonged to one family. Surcharge on their wines are not so great, so that you can seriously reduce and not go under. Competing with the dumping of supermarkets, enticing buyers offers like “3 bottles for 10 euro”, such people can not. Perhaps this sentiment, but each time, uncorking a bottle of unknown from a small manufacturer, I think it is – a drop in the sea. But maybe it will help to drown in the wine lake is not so fast.

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