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Salud: Vintners raise a glass to the weaker dollar
Posted By Mark
Bargain prices entice drinkers abroad to taste California’s harvest.
By Jerry Hirsch
Los Angeles Times Staff Writer
February 29, 2008
With the declining value of the U.S. dollar and increasing wine sales overseas, Charles Shaw wine, an American favorite, may seem in some places more like “One-Buck Chuck.”
That’s because the low value of the dollar is starting to turn California wines into bargains abroad. 2007 was a vintage year for wine exports, which grew by almost 9% to a record $951 million, the Wine Institute, the industry’s main trade group, said Thursday. California wineries make 95% of the U.S. wine sold abroad. Two large Central Valley companies, E. & J. Gallo Winery and Charles Shaw maker Bronco Wine Co., were among the biggest exporters.
Gallo, the nation’s largest wine exporter, has bottles on the shelves of supermarkets in China and 91 other countries, and Bronco is a big supplier of bulk wine that is bottled and sold in England, one of the largest foreign markets for California vintages.
Much of it is similar to Bronco’s $1.99 Charles Shaw wine, popularized by the Trader Joe’s grocery chain and nicknamed Two-Buck Chuck because of its price.
This could be another record year for wine exports.
The volume of U.S. wine sold abroad is growing by an even faster, 12% rate. California wine is now sold in 125 countries.
On Thursday, the euro rose above $1.52 for the first time in its nine-year history.
Further interest-rate cuts in the United States are likely to keep exchange rates favorable for wine exporters. At the same time, the low dollar helps California winemakers fend off foreign competition in the U.S. Jon Fredrikson, a Woodside, Calif., wine industry analyst, believes there are early signs that the low dollar is starting to pay off for California makers of premium wines.
“American wines are a bargain right now, and that’s showing up with what’s being shipped to Canada, where the value of our wine shipments is up nearly 25%,” he said.
But exporters and industry analysts said the rosy numbers masked a more negative truth about the global wine market: There’s a huge trade imbalance.
Read the entire article: http://www.latimes.com/business/printedition/la-fi-wine29feb29,0,3192007.story
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