Wine prices are falling

WINE TALK
21

CA wine pricing is out of whack. It has to do with a lot of things, so no need to go into that again. But I hear from people in the business in Napa that behind closed doors, it’s a tough sell these days. Many of these wineries sit on tons of stuff, but now they can’t back down on price without losing face. I fear it will all come to a head when the next recession hits. Unfortunately, the smaller family run Napa wineries who rely on it for a living, will be the hardest hit. The vanity wineries will survive.

In regards to falling fruit prices, which most certainly did happen this year (and will be even greater next year), that has a pretty small effect on overall pricing for smaller or boutique wineries. The absolute majority of all costs come after that. Even a 25% reduction in fruit prices will have very little effect on the final price - less than $1/bottle.

22

Just read this. Provides some additional insights IMHO. And some similarities to my own wine journey. Began in my 30s, evolved into a passion later, now more focused with more direct from winery purchases based on experiences. As always, your mileage may vary.

And, as Adam noted above, my experience with prices being “inflated” has been with CA wine allocations.

23

Starting to see ‘14 and ‘15 Napa on clearance. My guess is ‘17 vintage sales are going slow and there’s leftover ‘14 and ‘15 inventory either at retail or the vineyards.

And small sample size but coincidently I was given allocations for a number of Napa ‘17 wines I’ve been on the wait list for and wasn’t expecting to get allocations for a few more years. I’ve seen lots of postings where people are not taking or are reducing their ‘17 purchases so producers may be seeing this or adjusting their lists based on expectations.

24

better tell Burgundy prices are falling. Did you see recent Arnoux pricing—$1000 for Reignots and $500 for Suchots 18. I got chest pain.

25

I laughed and immediately deleted the email. The Suchots is is 2-2.5x times recent auction prices. The Reignots is 5x recent release prices I think? I assume they will sell out anyway - so little made that there is enough buyers who aren’t price sensitive.

Assuming we are indeed late credit cycle, I’m curious to see what would happen to Burgundy prices. Not sure there is enough volume for prices to retreat significantly.

26

Two Buck Chuck is back down to 2 bucks again - woo hoo. [wow.gif]

27

Yeah even with coronavirus and China slowing generally, amounts produced across the spectrum are just too small for prices to fall much beyond stuff like maybe DRC as far as I can tell. I would imagine given a recession (which could be years off and not very deep) 2nd tier auction darlings might lower a bit as well but I really just don’t see GC from even mid-range producers getting any cheaper.

28

Burgundy prices are helping me do what I should be doing - buy less wine.

29

Not to mention our kind government helping us along the path to abstinence by collecting an extra 25% on each sale!

30

more like 10%. It’s 25% on what the importer pays. Not all the distributors and retailers add on. I think it ranges between 10 and 25%. For example, Raveneau ex-cellar is a tiny price. The 25% gets added to that, just a few €. The 25% isn’t on the sale price if I make sense. It’s still extra, though.

31

Same here in my corner of the planet. Yesterday, I checked prices of one of my regular Burg-centric wine shops in HK; and there’s no sign of any price reduction or sale of any kind*. That despite Cathay Pacific’s and most all hotels’ virtually 50% reduction on airfare/room rates.

  • For the aged ones anyway.
32

Can anyone post any examples of this actually occuring?

33

Sounds like the perfect time to go to Asia.

34

I think it’s way too early to predict impact of Coronavirus. I gather there is some idea of the rate of infection (R0 factor) but I’m not sure I’ve seen much that’s conclusive on the mortality rates - is the current exposed to risk profile reasonable for extrapolation to global statistics and hence economic impact. Anecdotally, it seems this is fairly mild for most (but not all) people. In other words, is this another ‘flu (and we seem to be ok with its toll) or a SARS?

Back to wine. What is needed is another positional good for “new money” people to obsess over and take their eyes off wine. Clean air?

35

Well given small production, producers can store a few bottles before they decrease prices. Mugnier has not released Musigny since the 2012 vintage, I heard Roumier is thinking about keeping some Bonnes Mares… now that he has more terres blanches… and many celebrated producers may keep a few bottles aside in case of market downturn.

36

yes

37

There were great deals to be had during and after the financial crisis. I bought well, but wish I had bought a lot more. I suspect a replay of events would yield similar results.

That said, I vote against another financial crisis please.

38

Holy cow, the sky is falling. I have won 4 lots at K&L Auction this week with very lowball bids. I almost never win at K&L even when I’m trying, but 4 lots in a row at basically the starting bid?!? Wow.

39

We are just weeks away from the annual tastings of the 2019 Bordeaux in France. Believe it or not, the early reports on 2019 Bordeaux that I have seen have been favorable. [winner.gif] But it seems there is already plenty of good quality Bordeaux in the pipeline - (15s, 16s, and 18s), and now 2019s soon to be offered. [stirthepothal.gif] The current tariff situation aside, one wonders if prices for 2019 futures will be lowered? [cheers.gif] Certainly hope so but not holding my breath. [snort.gif]

40

EMH has decided to keep the wine prices without any increase. What I AM doing is absorbing all the increases in cost of goods and increased shipping costs, which are significant. All shipping costs are now included in the price of the wine. This affects the profit margin, of course, but is helping me to stay competitive.