BC Wine Market to Crash?
April 9, 2009
The beat-up economy is not bypassing the wine industry in BC. An article in the Vancouver Sun today announced that premium wine prices are starting to drop. Some winemakers are slashing prices just to pique your interest in their wines.
Can they afford to do this? In some cases, by lowering prices by 25 per cent, the winery will only be breaking even after all the work that went into each bottle. However, in other wineries, they might be able to afford to drop prices significantly and still make a profit.
John Schreiner, a journalist who is no stranger to the BC wine scene, wrote about this topic in September 2007 — long before the markets fell into the crapper. He gave some good reasons why BC wine prices are climbing, such as the rising prices of grapes and vineyard land in the Okanagan. But another reason on his list was the ‘because we can’ attitude of some winemakers. They set the price as high as they think they can get. If they’re able to sell wine for high prices, then it’s worth asking that much. I hope we’ll see some of these in-demand labels drop their prices in time for spring and summer Okanagan wine tours!
In a recent article in the Globe and Mail, Alexandra Gill touched on the topic of whether BC wines are able to compete on a global market. She quoted Heidi Noble, winemaker and co-owner of JoieFarm Wines saying “B.C. is not good value. Is regional pride and loyal support going to be enough to get the industry through these hard economic times?”
Of course, this set Noble into a spin. I received an email she sent out to her entire contact list before I’d had time to crack open the Globe. She explained how the quote was taken totally out of context. In the email, she points out that “the Okanagan Valley is amongst the most, if not the most, expensive, of all wine producing regions in the world. Three major factors contribute to this situation, the extremely high costs of land, labour & equipment.”
The government has made some steps to lower the price for winemaking. Baby steps. It dropped the barrel tariff on importing oak for use in winemaking. This will save wine makers an entire $30 per French barrel! Considering French oak barrels cost around $1,200, this is truly a drop in the bucket (or barrel as the case may be). This is all happening at the same time as the BC government is jacking up taxes on spirits (not wine and beer) by about 4.5 per cent per bottle, effective April 1, 2009.
But wine is certainly not excluded from government taxes. Mark Hicken, a Vancouver lawyer, recently complained in the Vancouver Sun about the incredible mark up that international wine faces — up to 132 per cent. His website, Free The Wine, encourages consumers to get involved and gives tips about how you can cut down on the tax you pay on BC and international wine.
All of these arguments about quality and price do carry a similar theme: when budgets are stretched, people will continue to drink, but they’ll be caring more about the price tag than the country of origin.
What do you think? Leave me a comment.
Comments
2 Responses to “BC Wine Market to Crash?”
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Yes Sheila!
I love BC wines and I want to support our local economy just as much as drink the wine. However, I feel that spending 30-40 dollars a bottle too much in these difficult financial times. I am finding myself looking at the price tag first, wine second. Over the winter, and coming into spring I have not purchased a BC red wine, opting for the similar new world flavors of South Africa, Chile, and Argentina. Also, there are some wonderful French table wines for under $15. I still buy only BC white, my favorites being Road 13 White (now Honest John) which I think is $14.99 and Cedar Creek Chardonnay which is $16.99.
I am not the only one either. My family, co-workers, and friends also purchase budget friendly wines, especially Australian cabs and shiraz.
I guess, either the wine prices need to come down in this province or I need more money for wine!
Haley
Thanks for the comments Haley!
Also on the topic of value buys — maybe hockey playoffs will inspire more beer drinking (at value prices):
http://www.vancouversun.com/business/fp/Cheap%20beer%20flies%20shelves%20drinkers%20tighten%20their%20belts/1500217/story.html