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Thursday, October 22, 2015

High-End Wine Prices Heading Up

You a fan of Napa Valley Cabernet Sauvignon? There's a little bad news for your wallet. Several factors are at work controlling the price of wine -- the economy and the grape supply being the biggest. The robust economy is saying raise prices. After a few years of ample grape supply this year's short supply is already saying raise prices (even though most of the 2015 wines won't hit the market for some time).

It appears Napa Valley Cabernet makers are planning on price hikes. It's interesting that you never see the price of Cab grapes or Cab wines drop. They might hold steady during a recession or a bad year (like 2011 in Napa), but they don't drop and now the prices appear to be heading up.

With the improved economy the demand for over $15 wines is going up while the demand for under $10 wines is actually dropping because consumers are moving up in the price they are willing to pay.

Meanwhile in the San Joaquin Valley of California where the cheapest grapes come from to make those inexpensive wines vineyards are being pulled out as farmers can't get enough money to sustain growing grapes. They are moving to other crops. It's natural supply-and-demand, but it's tough on those growers. In the meantime Napa gets richer.