Smoke Taint Abroad
California is not the only wine grape producing region that has faced smoke taint in recent years. Australian vintners, Canadians and producers from Greece, among others, have reported brushfires which some scientists warn could get worse in the future as the climate changes. Exposed wine grapes run the risk of passing the flavor to wine, resulting in a not-so-pleasant product that is described as tasting like smoked meat.
Scientists are focusing their attention on smoke taint and ways to prevent it. An article in ABC news claims a variety of solutions are now on trial, including vine sprays and reverse osmosis. One thing scientists recently learned: grape leaves are most likely responsible for absorbing the smoke, although the skin of the grapes was initially considered the gateway.
Causes for alarm began with the 2003 brushfires in southern Australia and were heightened after Napa Valley faced its own brush fires this summer, which is now beginning to show effects in California wine.
ONLINE WINE SALES: THE NEW FRONTIER?
Amazon’s plan to sell wine online is garnering a lot of attention inside and outside of the wine industry – and rightfully so. And not only has Amazon.com taken on wine, but the Wall Street Journal has also launched a website where consumers can have wine delivered directly to their homes (in states where it’s legal).
This could be a game changer in the way the United States distributes wine to consumers. Reuters published a piece yesterday that takes a look at the online wine phenomenon and Amazon’s recently announced involvement. Wholesalers and brick and mortar retailers may not take too kindly to the article’s angle, with its first line reading: “Consumers in just over half of the United States could soon be getting a better selection of wine at a cheaper price -- online.”
Tyler Colman, author of the book "Wine Politics. How Governments, Environmentalists, Mobsters and Critics Influence the Wines We Drink," was one of the people interviewed for the article. As quoted in Reuters, he said: "‘Wineries will have a much wider reach,’ he added, estimating that consumers could see a 20 percent drop in prices because Amazon "‘would eliminate a whole tier of the distribution system.’"
It also quotes an economist that claims consumers could save 50% on online wine purchases, claiming “distribution is the biggest single bottleneck in the wine market.”
According to Reuters, Wine Spectator has reported that Amazon’s marketing proposal and contract to wineries offered vintners the opportunity to not only set their own price, but recoup 47% of the sale. Not too shabby for wineries.
Surprisingly, Wine.com chief Rich Bergsund welcomed Amazon’s entry into the market calling it a “good thing” since online wine sales only represent a small (1-2%) of the market.
Will the hype surrounding Amazon’s foray into wine mark a new beginning for the industry? We think it’s likely. Let us know your thoughts at megan@beernet.com.
For more background, click here.
EU STATES EAGER TO GRUB UP VINES
Apparently, EU states are racing to volunteer unprofitable wineries in the new three-year grubbing scheme put forth by Agricultural Commissioner Mariann Fischer Boel and approved at the end of last year. The plan ultimately strives to drain the extensive wine lakes in the EU, rid itself of overproduction, and put it on a more competitive playing field with new world wine producing countries. One of the most controversial parts of the reform is compensating farmers for pulling up unprofitable vineyards. As it turns out, EU countries are happy to abide.
The first year of the three-year scheme pays farmers the most money, and has so far exceeded expectations, according to the commission. A surprising 14 EU countries have asked for cash subsidies, which far exceeds the EU budget for pulling vines in the first year (note the premium price) set at $615 million for 2008-2009. Now, the EU will cutback only 73,400 hectares in year one of the scheme, so a lot of countries’ requests will be denied.
In all, the reform hopes to remove 175,000 hectares of vineyard land over a three year period from the existing 3.6 million hectares in the EU. The plan originally wanted to dig up 400,000ha but met with opposition.
Spain reportedly asked the EU to subsidize the removal of about 9%, or 98,000ha of vines. The amount was eventually reduced to 45,000ha, or half of the overall total for the first year.
CALI WINEGRAPE PRICES RISING WITH UNPREDICTABLE FUTURE
Winegrape prices are looking solid so far for producers in California after years of what many considered unfair compensation.
Many in the wine press are dubbing this year’s California harvest as high quality and low quantity, which is good for growers especially since fuel, fertilizer and labor are getting more expensive. Another component working in growers’ favor? Increased demand for California wine in the United States, despite the economic downturn. Allied Grape Growers says most areas of the state have seen prices rise 50-100% per ton. The lower yields mean almost all the grapes in California have been sold, versus gluts in recent years that have left growers with a surplus of unused goods.
Wineries, however, are increasingly cautious when ordering grapes during these unpredictable times. In the beginning of the year, California winegrapes were in high demand, but April frosts and the continued weakness on Wall Street eventually led wineries to hold back. Wine is still doing well despite housing crisis, but who knows what the future holds? Some wineries may opt for lower wine grape shipments knowing they can make up with bulk in the future, says industry insiders. So far, the 2008 crush is expected to generate about 3 million tons, compared to the 2007 crush of nearly 3.7 million tons.
WSD BRIEFS:
BACCHUS CAPITAL MANAGEMENT, a San Francisco-based investment firm, says it has provided mezzanine financing to Cameron Hughes Wine, a wine negociant sourcing super- and ultra-premium wine worldwide. Its brands are sold exclusively through large retailers, such as Costco and Sam's Club, as well as through a national network of distributors and direct consumer sales. The financing takes the form of a second lien five-year loan. This is the first transaction for Bacchus Capital Management, which was founded last year.
CLARIFICATION. With regards to our piece entitled “Russian River Valley Likely to Expand,” Gallo’s petition to extend the southern boundary will add just over 14,000 acres which is an increase of 9 percent. In 2005, the AVA was expanded by more than 30,000 acres which increased the size by more than 24 percent."
Until tomorrow, Megan
“Be modest! It is the kind of pride least likely to offend.”
Jules Renard
--------- Sell Day Calendar ----------
Today's Sell Day: 16
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Scientists are focusing their attention on smoke taint and ways to prevent it. An article in ABC news claims a variety of solutions are now on trial, including vine sprays and reverse osmosis. One thing scientists recently learned: grape leaves are most likely responsible for absorbing the smoke, although the skin of the grapes was initially considered the gateway.
Causes for alarm began with the 2003 brushfires in southern Australia and were heightened after Napa Valley faced its own brush fires this summer, which is now beginning to show effects in California wine.
ONLINE WINE SALES: THE NEW FRONTIER?
Amazon’s plan to sell wine online is garnering a lot of attention inside and outside of the wine industry – and rightfully so. And not only has Amazon.com taken on wine, but the Wall Street Journal has also launched a website where consumers can have wine delivered directly to their homes (in states where it’s legal).
This could be a game changer in the way the United States distributes wine to consumers. Reuters published a piece yesterday that takes a look at the online wine phenomenon and Amazon’s recently announced involvement. Wholesalers and brick and mortar retailers may not take too kindly to the article’s angle, with its first line reading: “Consumers in just over half of the United States could soon be getting a better selection of wine at a cheaper price -- online.”
Tyler Colman, author of the book "Wine Politics. How Governments, Environmentalists, Mobsters and Critics Influence the Wines We Drink," was one of the people interviewed for the article. As quoted in Reuters, he said: "‘Wineries will have a much wider reach,’ he added, estimating that consumers could see a 20 percent drop in prices because Amazon "‘would eliminate a whole tier of the distribution system.’"
It also quotes an economist that claims consumers could save 50% on online wine purchases, claiming “distribution is the biggest single bottleneck in the wine market.”
According to Reuters, Wine Spectator has reported that Amazon’s marketing proposal and contract to wineries offered vintners the opportunity to not only set their own price, but recoup 47% of the sale. Not too shabby for wineries.
Surprisingly, Wine.com chief Rich Bergsund welcomed Amazon’s entry into the market calling it a “good thing” since online wine sales only represent a small (1-2%) of the market.
Will the hype surrounding Amazon’s foray into wine mark a new beginning for the industry? We think it’s likely. Let us know your thoughts at megan@beernet.com.
For more background, click here.
EU STATES EAGER TO GRUB UP VINES
Apparently, EU states are racing to volunteer unprofitable wineries in the new three-year grubbing scheme put forth by Agricultural Commissioner Mariann Fischer Boel and approved at the end of last year. The plan ultimately strives to drain the extensive wine lakes in the EU, rid itself of overproduction, and put it on a more competitive playing field with new world wine producing countries. One of the most controversial parts of the reform is compensating farmers for pulling up unprofitable vineyards. As it turns out, EU countries are happy to abide.
The first year of the three-year scheme pays farmers the most money, and has so far exceeded expectations, according to the commission. A surprising 14 EU countries have asked for cash subsidies, which far exceeds the EU budget for pulling vines in the first year (note the premium price) set at $615 million for 2008-2009. Now, the EU will cutback only 73,400 hectares in year one of the scheme, so a lot of countries’ requests will be denied.
In all, the reform hopes to remove 175,000 hectares of vineyard land over a three year period from the existing 3.6 million hectares in the EU. The plan originally wanted to dig up 400,000ha but met with opposition.
Spain reportedly asked the EU to subsidize the removal of about 9%, or 98,000ha of vines. The amount was eventually reduced to 45,000ha, or half of the overall total for the first year.
CALI WINEGRAPE PRICES RISING WITH UNPREDICTABLE FUTURE
Winegrape prices are looking solid so far for producers in California after years of what many considered unfair compensation.
Many in the wine press are dubbing this year’s California harvest as high quality and low quantity, which is good for growers especially since fuel, fertilizer and labor are getting more expensive. Another component working in growers’ favor? Increased demand for California wine in the United States, despite the economic downturn. Allied Grape Growers says most areas of the state have seen prices rise 50-100% per ton. The lower yields mean almost all the grapes in California have been sold, versus gluts in recent years that have left growers with a surplus of unused goods.
Wineries, however, are increasingly cautious when ordering grapes during these unpredictable times. In the beginning of the year, California winegrapes were in high demand, but April frosts and the continued weakness on Wall Street eventually led wineries to hold back. Wine is still doing well despite housing crisis, but who knows what the future holds? Some wineries may opt for lower wine grape shipments knowing they can make up with bulk in the future, says industry insiders. So far, the 2008 crush is expected to generate about 3 million tons, compared to the 2007 crush of nearly 3.7 million tons.
WSD BRIEFS:
BACCHUS CAPITAL MANAGEMENT, a San Francisco-based investment firm, says it has provided mezzanine financing to Cameron Hughes Wine, a wine negociant sourcing super- and ultra-premium wine worldwide. Its brands are sold exclusively through large retailers, such as Costco and Sam's Club, as well as through a national network of distributors and direct consumer sales. The financing takes the form of a second lien five-year loan. This is the first transaction for Bacchus Capital Management, which was founded last year.
CLARIFICATION. With regards to our piece entitled “Russian River Valley Likely to Expand,” Gallo’s petition to extend the southern boundary will add just over 14,000 acres which is an increase of 9 percent. In 2005, the AVA was expanded by more than 30,000 acres which increased the size by more than 24 percent."
Until tomorrow, Megan
“Be modest! It is the kind of pride least likely to offend.”
Jules Renard
--------- Sell Day Calendar ----------
Today's Sell Day: 16
Sell days this month: 23
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Wed.
YTD sell days Over/Under: +1
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 2:00 PM
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