NAPA - It's a time of optimism in the wine industry, with vintners buying vineyards to secure supply, and grape growers and brokers easily selling their crop for hearty prices.
But there are issues on the horizon, including a dwindling labor pool and an increase in bulk wine imports from overseas that could ease pricing pressures on domestic grapes and wine.
These trends were part of wide-ranging discussions Thursday among 200 vineyard, winery and finance executives at the 18th annual Vineyard Economics Seminar in Napa.
Nearly 98 percent of growers and vintners were more profitable last year than the previous year, and 87 percent believe that next year will be even better, according to an annual survey of wine executives.
"The winery demand seems to continue unabated," said conference founder David Freed, chairman of the Silverado Group.
Growers in some parts of California are experiencing a shortage of agricultural workers. On the Central Coast, some vineyard owners have been accused of stealing farm workers from other crews, said Steve McIntyre, founder of Monterey Pacific, a vineyard management company in the Central Coast.
"The reality is we're not stealing from any crew. It's just that people are able to shop around for better wages," McIntyre said. "If they don't want to stoop to pick strawberries, they can … pick grapes."
The changing dynamics around immigration and health care policy may reduce the advantage of using labor contractors, McIntyre said. As companies are required to provide health care to legal workers, the costs will be passed along to growers, said Craig Ledbetter, vice president of Vino Farms, a vineyard company based in Lodi.
"We really need to think about this as an industry," Ledbetter said.
Despite the tight labor market, the California Association of Winegrape Growers is opposing several bills in the Legislature that would improve conditions for farm workers by increasing the minimum wage and mandating some pay during heat or rest breaks.
"Labor remains perhaps the most active and frankly troublesome area in Sacramento," said John Aguirre, president of CAWG.
Meanwhile, imports will likely continue to pose a threat to California grapes and wines, especially if domestic prices remain strong, executives said.
"As a group, as an industry, as grape growers, we need to focus on how we're going to protect our brands," said Bill Pauli, president of Yokayo Wine Co. in Ukiah. "Collectively we have a lot invested."
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