The Wine Glut Over - Now, We PAY!!!

Written by Ian Robertson on 18th September 2007

The glut is over. Yep, it is all pretty official now. When the main newspapers and current affairs shows tell you it is done and dusted, you gotta believe them obviously.

So with all the media hoo-ha based on the premise that wine prices will rise, what is really going to happen?

Don’t consider me a financial market genius by any means by the way – I’m not! But, there are still some simple facts to hang your hat on.

Under $10 – Wine under $10 may be affected. During the glut, cleanskins and cheaper labels (such as McWilliams Inheritance, De Bortoli Sacred Hill and cask wines) were often found at obscenely low prices. De Bortoli Sacred Hill as an example could be bought regularly for $3.99 or less. You will still find these prices – but much much rarer.

$10 to $20 – Here is where the impact will be. Paying a few bucks more for cheap wine is something that many people won’t think about too much. But picking up your favourite big company label at $22 instead of $16 or $17? That is when people will be a bit shirty. In this price range there are a lot of big company wines, and a few good solid smaller labels. A lot of these wines will be dragged upwards in price due to less production.

$20 to $40 – For the most part, these wines will not be too affected. They are normally not so much mass production or mass market wines as made for a certain segment of the market - some of the wines at the lower end of this bracket will start to seem much better value compared to some wines who have been cheaper for years and are now about the same price.

$40 plus – really, you will see bugger all effect here. These wines are made in small quantities – whether the industry in general is in glut or not has little effect on them. These wines are driven more by their own performance, availability and demand than that of other wines.

So what am I saying?

Our normal everyday drinking wine will start to become more and more expensive. Yes, that is true. Can’t argue here with the media reaction. But, it will be a long while before the good stuff is pushed up in price by the rising prices of the ‘lower segments.’

So I guess the moral of the story should be – time to drink more better stuff??