Watering back wine is the practice of diluting the grape juice before fermenting it into wine. The purpose is to decrease the alcohol content of the finished wine. At least that was the idea when the Alcohol and Tobacco Tax and Trade Bureau that controls wine in the U.S. first allowed the practice in 2002.
Things may have gone awry.
Why do I think the intended purpose of the regulation isn't how it worked out? Start with this graph from the American Association of Wine Economists on grape ripeness at harvest.
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Brix degrees (or degrees Brix) is the measure of dissolved solids in a liquid. In this case, the solids are almost all sugars. The more sugar fermented, the higher the alcohol level in the wine. For instance, 25 brix in grapes fermented to a dry wine will yield about 14% alcohol, though that can vary.
As you can see by the graph above, grapes are being harvested at much higher sugars now. The reasons for this are for another time, as even the winemakers aren't quite sure or in agreement as to why, but there are plenty of theories. One thing that is true is when someone says California wines of today aren't the same as a few decades ago, they aren't lying. This doesn't mean one way is better, it means there have been changes.
With this increased sugar in the grapes, you get higher alcohol. One way to lessen that is to dilute the juice by adding water, something that's a common practice now.
What happens when you pick grapes riper? There is less liquid in the grape as they dehydrate on the vines as sugars increase. One thing the grape growers don't like is less water in the grapes means less weight means less money because they get paid by the ton. Perhaps this is one reason grape prices have increased. The graph below is a look at Cabernet prices over the years.
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So some wines are artificially manipulated to control the sugars/alcohol levels and quantity of juice to be fermented. Again, I don't know if it's good or bad, just that it's happening a lot and something winemakers aren't likely to talk about.
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