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April 2009, Volume 15, Number 2

Wine and Food

California crushed almost 3.1 million tons of wine grapes in 2008, down six percent from 2007 (the total crush was 3.7 million tons, including grapes crushed to make concentrate or sweeteners). About 55 percent of the 2008 grapes crushed were red varieties. The average price per ton was $547, with prices for red wine grapes averaging $648 and $539 a ton for white wine grapesÑ prices for raisin grapes that were crushed averaged only $224 a ton.

Prices varied by region, averaging $3,420 a ton in Napa and $261 a ton in Fresno. Yields also vary widely, from three to five tons an acre in Napa to 12 to 15 tons an acre in Fresno.

California has an estimated 780,000 acres of grapes, including 480,000 bearing acres of wine grapes. About 80 percent of California wine is sold for less than $10 a bottle, and the state's 10 largest wineries account for 80 percent of wine shipments.

Tasting. The California State Fair hosts one of the largest wine competitionsÑ almost 650 wineries entered 3,000 wines in 2008. There were 65 panels of four judges each to rate wines, but over half could not produce consistent results.

State Fair judges taste 30 wines four times a day, and only 10 percent gave the same wine consistent ratings each time they tasted it. Another 10 percent gave the same wine wildly different ratings each time they tasted it, ranging from gold to no medal. The other 80 percent of judges were between these extremes. The Fair may establish a mechanism to remove the most inconsistent judges.

The Wine Market Council estimates that 18 percent of Americans drink wine at least once a week, and 35 percent drank wine sometime in 2006.

Copia. Copia, The American Center for Wine, Food and the Arts, was the brainchild of Robert Mondavi, the winemaker credited with improving the quality of Napa Valley wines. The Robert Mondavi Corporation was bought by Constellation Brands Inc., the world's largest wine company, for $1.3 billion in Fall 2004.

Mondavi bought the land for Copia in downtown Napa in 1996 and also contributed to its construction. However, Copia went bankrupt in December 2008, reporting debts of $80 million and assets of $30 million. Resolving Copia's bankruptcy required sorting through competing claims, including allegations that $72 million in tax-free municipal bonds sold to finance Copia were fraudulently transferred.

A Harris poll released in February 2009 reported that 40 percent of Americans say they never buy wine. Among the 60 percent who say they buy wine, 75 percent said they bought a bottle a month or less; three percent bought a bottle a week or more. Among Americans who drink wine, 55 percent say they drink wine once a month or less; only 20 percent say they drink wine at least twice a week.

Global. The Paris-based International Organization of Vine and Wine reported that global wine consumption fell slightly to 6.4 billion gallons in 2008, almost a gallon for every person on earth. For the first time, the US surpassed France as the largest consumer of wine, reflecting declining consumption in France, where consumption averages 22 gallons, compared to less than three gallons in the US.

Italy was the largest exporter of wine by volume, and France the largest exporter by value.

The price of fine wine soared along with the stock market, with a case of the 2005 Ch‰teau Lafite Rothschild, a first-growth Bordeaux, rising from about $1,000 to $6,000 or $500 a bottle between 2002 and 2005, an exceptionally good year. The price fell to about $4,500 a case in 2007 as the economy slowed, but English experts who buy about a third of Bordeaux wine estimated the cost of producing the wine at about $15 a bottle.

The "en primeur" (wine futures) system helps French chateau by allowing them to collect funds six months after the harvest, and well before the wine is bottled and sold. Most barrel tastings occur in the March after harvest.

France has one of the lowest legal drinking ageÑ teens at 16 may drink beer and wine, and at 18 drink liquor and spirits. The French government plans to raise the legal drinking age for wine and beer from 16 to 18, drawing protests from the French wine industry, which predicts more binge drinking. The French wine industry says it accounted for 500,000 jobs and $12 billion in exports in 2008.

The French government is concerned with binge drinking, which has been rising among French youth. In addition to raising the legal drinking age, the bill would place new limits on bars that offer unlimited drinks after payment of a fee.

So-called wine terrorists known as CRAV broke into a cooperative winery in Nimes and dumped 11,000 hectoliters or 1.2 million bottles of imported wine valued at E500,000 down the drain. They were protesting imports of low-priced Spanish wine that many French wines use for their vin de table.

Three South American countries produced significant amounts of wine--Argentina produced 15.2 million hectoliters of wine in 2005; Chile, 7.9 million; and Brazil, 3.2 million (one hectoliter is 26.4 gallons).

David Jolly, "In Wine Futures Season, Concerns of a Bust," New York Times, March 31, 2009


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