US demand for cheap wine buoys global market
Is the world drowning its sorrows in cheap wine?
An industry group said Thursday that more wine could be consumed globally this year thanks to crisis-fueled demand for cheaper or discounted tipples.
While that might benefit some low-end producers, the organization’s director cautioned wine growers to resist what he called the "massive pressure on prices," which erodes profits.
"If you cut too much, it’s difficult to go back to your original price," Federico Castellucci told The Associated Press.
The International Organization of Vine and Wine predicts that world wine consumption should rise by 4 percent to 246.3 million hectoliters (6.5 billion gallons) in 2009 from an estimated 244.9 hectoliters last year.
"People who want to keep drinking are buying cheaper wines," said Castellucci, noting that holiday season purchasing has not been tallied, and consumption could yet fall.
He said that the United States, second only to France in terms of wine consumption, has "continued to import but with a strong attention to prices."
The market for wine sold in bulk is growing, he also noted.
Global wine production is expected to remain flat this year at 268 hectoliters, the same level as 2008.