In our regular market update conversations with our global bulk brokerage partners, the concerns over the lack of consumer demand for value wine continues to increase in each region. The decreasing consumer sales dynamic has led to slow bulk wine markets for larger volumes of value wine regardless of country, varietal, or vintage—especially for red wines. To try to stimulate the market, asking prices for bulk wine are down. This has not yet incentivized opportunistic buyers to come to the market as it has in past cycles. 

Historically when faced with oversupply, wineries have resorted to discounting casegoods to stimulate sales, but there are many challenges to do this in today's economic environment. Many wineries have inventory at higher costs as a result of inflation. Additionally, cash positions are compromised by slow sales making them reluctant to lower prices and reduce any margin they may still have. In past challenging economic times, consumers kept buying wine but would shift down in price point. The Wine Market Council did note some signs of domestic consumers trading down in their early September report, but this appears to be less common than historically similar periods. (Of course, what would be preferable for all is if consumers purchased more wine to take market share from beer and spirits.) 

Adding to the sales challenges and increased prices are tariff actions and anti-alcohol efforts in the EU and beyond as described in a recent Meininger’s article. The effects of the most recent spike in cost for wine due to the UK tax increase will likely slow wine sales there, and producers are likely to turn their focus to the United States if they are unable to sell in the UK. Global actions like this negatively impact and further complicate the ability for domestic wineries to sell wine. 

This update highlights the unique supply, demand, and pricing trends from various regions around the world for wines of a quality and style to be competitive in the U.S., and how they might impact markets for California bulk wine and grapes.

In This Issue

• Northern Hemisphere 3
• France 3
• Italy 4
• Spain 5
• Southern Hemisphere 6
• Chile 6
• Australia 7
• New Zealand 8
• Domestic Impact 9
• Turrentine Crop Contest 10

If you have any questions, please contact Daniel Tugaw at daniel@turrentinebrokerage.com 

Bulk Wine Grape Market