California 2002 Harvest Is Compressed

In 2002, what looks to be a high-quality harvest has been severely compressed into about a four-week period.

In the worst economy in a decade, the livelihoods of several grape growers and wineries may be on the line.

If there's a silver lining, it may be reduced prices on the wine shelves.

Stories of California grapes being left on the vine or being offered at prices significantly lower than the price it took to grow them are rampant.

Alan Goldfarb, of Napa Valley's Saint Helena Star, reports that from Pope Valley to Yountville, chardonnay grapes are selling for as low as $450 a ton? That's $1,500 below the normal price.

Goldfarb says growers have been hearing about the great grape glut of '02 for months now but it was thought to be only happening in the Central Valley where grapes are being peddled at prices lower than it takes to grow them.

That said, Napa Valley's struggles hardly compare with the Central Valley, the Central Coast, Lodi, or even the North Coast where grapes with and without a contract will have a hard time finding a home.

Most of the large producers I've been speaking with have sizable inventories already on hand and have moved to cut the size of their 2002 harvest.

The mantra is "reduce tonnage and improve quality," but dropping grapes and thinning the crop is as much about over-production as it is about quality at this point.

Even with a radical thinning, grapes such as chardonnay, merlot and cabernet sauvignon are all expected to be in oversupply.

There is still some bravado in California, as evidenced by John Bergman of Bergman Vineyards, a real estate broker of vineyards and wineries in Sonoma County.

Bergman is quoted as saying "there will never be enough 'ultra-premium' quality grapes being grown. This is due to the fact that there is not enough premium land to produce ultra-premium grapes to service high-end wine drinking demand."

Either Bergman is living in a dream world or he hasn't set foot outside of Sonoma County in a decade or two.

From Chile and Argentina to New Zealand and Australia, or even nearby Washington State the New World is awash in premium wine grapes. The problem is there aren't enough premium wine buyers.

After nearly a decade of unprecedented growth and record profits, the disappearance of free spending dot comers, a sluggish economy and a new corporate ethic that frowns on expensive dinners and wines means tough times ahead for premium wine producers.

There are many questions to be answered beginning with how do you discount a brand? Many wineries spent the better part of the last decade establishing brands and price points that don't work in discount mode.

But discount they will because consumers are not buying much of anything this fall.

The repercussion will be felt worldwide especially among those regions that depend on high prices to keep the doors open. That includes New Zealand, Canada, Northern Italy, several parts of France, California, Oregon and Washington.

Some B.C. wineries are already dumping wines in Alberta and there will be much more to come. Restaurants selling wine at over-inflated prices will be next to feel the pinch, and there's a long list of those in Vancouver.

B.C. consumers are only just beginning to see the first sign of lower prices as producers eliminate inventory in anticipation of the new vintage. Already many so-called 'allocated' wines that were simply unattainable 16 months ago are now appearing for sale in specialty shops.

We know there are going to be bargains. The only question is, will B.C. government stores be able to take advantage of the situation and actually get something on the shelf?

Ever since the government announced its intention to privatized liquor stores this summer, service has been virtually non-existent at the warehouse or in the stores. Employees are clearly disgruntled, some are working-to-rule, moral is a mess and neither the executive nor the minister seem to care about the day-to-day operations of getting product on the shelf and out the door.

With wine prices set to tip in favour of consumers it would be nice if someone in the government step in to clean up the mess at the BCLDB so we could all enjoy the bargains sure to come our way in 2003.