Wine lovers to profit from falling prices

Tue Dec 20, 2011 11:09am EST
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By Chris Taylor

NEW YORK (Reuters) - Think of wine critic Robert Parker as the E.F. Hutton of fermented grapes. When he talks, oenophiles listen.

So when Parker, publisher of the Wine Advocate, said recently that the world is entering the 'Age of the Buyer' - a prolonged period of stable or declining wine prices - it was enough to get sommeliers buzzing over their Chateau D'Yquem.

"There's now a tremendous amount of high-quality wines available at reasonable prices," agrees Andrew Bell, president and CEO of American Sommelier, a membership association for wine aficionados. "With supply increasing and consumption decreasing, it stands to reason that prices will fall or stabilize. The pendulum is swinging in favor of the consumer."

To which wine lovers might say: It's about time. In recent years, they have grappled with seemingly ever-increasing prices. With production at top French chateaux like Margaux or Petrus limited, and wealthy Chinese buyers starting to acquire a taste for high-end Bordeaux, bidders have set auction records and the futures market has been priced at sky-high levels.

But things may finally be tipping in favor of the consumer, at least in the broader market. The punishing recession has a lot to do with it: Disposable income is plummeting, so most households just don't have much cash to be splurging on an outstanding syrah or sauvignon blanc.

"The recession drove everyone to trade down," says Barbara Insel, CEO of Napa-based wine-market advisory firm Stonebridge Research Group. "The market disappeared for most wines costing more than $15 or $20. Pretty much anything costing more than $30 was 30 percent off - and often not refilled on the shelves or wine lists."


Currency trends are helping foster the Age of the Buyer, as well - at least for Americans.   Continued...

<p>Glasses and bottles of Chateau Belcier red wine (Saint Emilion label) are seen in a testing room in Saint Emilion, southwestern France, November 6, 2007. REUTERS/Regis Duvignau</p>