Bad economy could be good for consumers

<p>Psst, hey, buddy! I got a Cabernet here that sells for $75, but for you, I could let ya have it for, uh, 29 bucks. Wha'dya say?</p><p>Like the late Sheldon Leonard, the racetrack tout on the old Jack Benny radio show, a lot of people have special deals for wine lovers these days. With the economy slow and wine seen as a luxury, sales have slowed so much that wineries, retailers, and wholesalers are offering deal after deal, making some pricey wines almost affordable.</p><p>The ripple effect this is creating is almost certain to be a two- to three-year headache that will benefit savvy consumers.</p><p>The slowness of the economy has put a huge dent in all wine sales, but hardest hit are wines in the double digits as consumers trade down.</p><p>This hurts all areas of the wine business, starting with wholesalers, many of whom took normal allotments of wines for their warehouses many months ago, before the economy really went south. Most are now stuck with slow-moving inventories.</p><p>What's bad about this is that most wine is vintage-dated and thus has a perceived "sell-by" date. Most Americans think a wine from a prior vintage must have something wrong with it if it hasn't sold quickly. And that's true: many wines are best when consumed young.</p><p>One major retailer told me, "Some of these wines are getting very tired, and if they don't sell soon, the wholesale companies are going to have to dump them."</p><p>Such wines are already being offered at deals to retailers that are so attractive it's hard to say no. Yet many retailers are saying no, and with increasing frequency, since their shelves are already filled with wines that they bought on deals offered months earlier -- and they are selling wine more slowly than a year ago.</p><p>Then there are grape growers, who by July each year already know about how much their grapes will fetch. As of last week, no prices had yet been set for prices in most areas of the state. One Napa Valley Cabernet Sauvignon grower told me, "I don't think we'll see any prices until at least August, until the size of the crop is determined."</p><p>He said many wineries are now making plans to produce a lot less wine than they have in recent years, and thus they have grapes to sell.</p><p>"My biggest competitors," said the grower, "are wineries with too much fruit."</p><p>In 2008, the average price for a ton of Napa Valley Cabernet grapes went for about $4,800. Using an old formula developed decades ago, the price of a bottle of wine should be roughly about 1 percent of the grape price.</p><p>Using that "formula," the average price for a bottle of Napa Valley Cabernet should be about $48.</p><p>"Now, who's buying a lot of $48 Cabernet these days, with the economy the way it is?" asked the grower.</p><p>Wilfred Wong, wine buyer for the 98-store chain Beverages and More, said he and his staff now taste about 12,000 wines a year, up significantly from a couple of years ago, and "we are being offered a lot of very good wine, mainly from Argentina and Chile, which make red wines that Americans really like."</p><p>He said the strongest price point wines in BevMo stores is between $15 and $20 – but a lot of that wine one was once $30 to $40.</p><p>The place to shop for discounts is at specialty stores. It's been my experience that most chain grocery stores do not discount as much as they could because they are more locked into a pricing formula.</p><p>Often the best deals are at wine shops where staffs find little gems whose brand names are not well known, but where the wine is excellent, and bargain priced.</p><p>Wine of the Week: 2008 Blackstone Chardonnay, Monterey County ($12) -- Attractive aroma of citrus and faint leafy notes, succulent entry, but good acidity to help marry with food.</p><p>Wine journalist Dan Berger has been nationally syndicated for 30 years. He resides in Santa Rosa, where he publishes Vintage Experiences, a subscription-based wine newsletter. Contact him at danberger@rocketmail.com</p>