Dr. David Muhleman

The-Wine-Educator    WINE & SPIRITS EDUCATION AND CONSULTING SERVICES FOR THE CONSUMER AND THE PROFESSIONAL

Tough Economy Wine

There is an old saying in the wine business, that when economical times get bad, people don’t stop drinking, they drink cheaper. And it could not be a better time in recent history to “drink cheaper.”

Before you run out and start buying cases of $1.97 per bottle wine, let’s think about this for a minute. During difficult economical times many of the better wine producers have to lower their price, not their quality. Wines that are under $2 a bottle now, were probably under $2 a bottle when economic times were good. There was a certain two-dollar wine that became famous (or infamous) when economic times were good. It’s still around 2 dollars.

However, there are many, many fine wines that have cut their wine prices in half just to compete in tough economic times. These are great wines, that have been sitting in oak barrels for the past 2, 3, 4, or 5 years with the expectation that they were going to sell for $20, $30, or $40 a bottle, but because of difficult economic times are discounted 30%, 40%, and 50% from just a year ago.

Most wine producers REFUSE to lower their price; until they are sitting with a warehouse of unsold wine. Then they start to realize that some money is better than no money. And although they try to hold their prices as long as they can, in a free market economy, you have to adapt to what the market will bare.

Additionally, more and more GREAT wine is being put on the Internet auction sites. Wines that may have sold for $100 a bottle a year ago, are bringing $50 in today’s wine market. And unlike houses, where you might want to ride out the low spots in the market, holding on to the wine TOO long will make it even worse. You may be reaching that point with a 5 year old, New World, Chardonnay which cost $40 new, that it is better to sell it for $20 now, or risk selling it for $5 three years from now when the economy improves.

The seller’s loss is the buyer gain. And if you can afford a few bottles of wine, now may be the time to buy (when deals are good). The other aspect of buying wine in a tough economic situation, is that stores are constantly doing sales. Not a week goes by where the local stores aren’t offering 30% discount, or 40% discount. I am old enough to remember gasoline wars where gas stations (then called service stations) were try to undercut the next station. I honestly bought gas (in the ‘60’s) for 19 cents a gallon. And the same thing is happening with wine sales.

Big retailers like BevMo, Total Wine, Cost Plus, and many others, are undercutting each other. And everyone is honoring the coupon from their competitor, so the time to “buy up” is now. Nearly all the wineries are cutting their profit to the bare minimum, the distributors are cutting their profits to a bare minimum, and the retailer’s are cutting their profits to the bare minimum.

If ever the consumer was paying the least about of mark-up over cost, now is the time. I know it’s tough to buy a $50 bottle of wine in these tough economical times, but in good times that same bottle is going to cost $100. So I suggest that we still have birthdays, and we still have anniversaries, and we still have times we are going to celebrate even in tough economical times. So take the opportunity that may not come again for a long time and try those wines you always wanted to try, but could never afford (or you didn’t want to pay that much).

Yes, the vast majority of the world is drinking less expensive wine during these tough economic times, but I would suggest that these are great times to “buy low and drink high.”

Until next time, drink good wine.