The great 2009 wine trade down

[Roy Hersh]

I think this is a well written article about the realities in the wine market given the current economy. As this relates to Port as well as to table wines, I've chosen to include this here as I think it deserves the attention.

http://www.latimes.com/features/la-fo-w ... 5565.story

Your opinion? :type:

[Jose Costa]

Hi Roy

Excellent article, well written and very pertinent.

One potential upside for the serious operators in the trade is that current economic scenario may also help resolve some of the price anomalies (gross overpricing) present in many wine shelves around the world.

I think it will also be beneficial for the consumers that prefer quality over quantity and in particular those consumers (wine lovers...I normally say) who know enough about wine to know what they want.

CHEERS!
Jose

[oscarquevedo]

As the article says, now you can probably drink better for less. But while for Douro wines I think this is true (and necessary to bring some prices to the earth) I think Port Wine prices will hardly fall as much as the table wines. Moreover aging increases the value of Port.

[Roy Hersh]

Thank you gentlemen.

So what is your prediction about where pricing will be for the next generally released Vintage Port ... be it 2007 or 2008?

Will we see much in the way of an increase over 2003 VP release prices, do you think prices will remain about the same, or is there any possibility of prices actually coming out lower?

Your thoughts?

[oscarquevedo]

This decade has brought some good harvests for the production of VP. As there will be some generous quantity of good VP 2007 and 2008 in the market and this current market contraction doesn't allow much pricing excesses, maybe many VP coming out lower, not much, but a 5%-10% is possible.

[Roy Hersh]

Now THAT would be very welcome news indeed!

[Andy Velebil]

Yes that would be great news for sure!!

[Moses Botbol]

This decade has brought some good harvests for the production of VP. As there will be some generous quantity of good VP 2007 and 2008 in the market and this current market contraction doesn't allow much pricing excesses, maybe many VP coming out lower, not much, but a 5%-10% is possible.

Do you think that it's currency exchanges playing to the US market's favor or are the port houses actually going to lower their initial prices.

I was suprised at a recent auction that port prices remained steady to my dismay.

[oscarquevedo]

Sorry Moses, just see you reply now.

I would say that Port Houses will reduce prices as they have some margin for that. They will not do it heavily because exchange rates are playing in exports side and because there is a limit to increase demand by price reduction.

In UK the situation is tougher. The strenght of the EUR against the GBP is doing some harm to Port sales. My perception is that prices of Port are not increasing in UK, but reducing in some cases. Some Port House are lowering their retail prices, mainly in the lower categories.