California wine grape growers are growing increasingly frustrated and angry at each market percentage point gain of foreign wine in the U.S. wine market.
By the end of the year, burgeoning wine imports are expected to account for 30 percent of the U.S. market.
As the overall wine market in the U.S. grows at a healthy 2 percent to 5 percent annual clip, California grape growers continue to rip out vineyards. More than 100,000 acres in the Central Valley have been destroyed in the past five years. Growers are beyond weary of prices offered less than production costs.
Grapes have been left on the vine over the past few seasons because there were no winery buyers. Some coastal growers have resorted to custom crushing their own grapes and hope to sell the wine to the wineries that would not buy the grapes.
Rubbing salt into the open economic sore this season includes record bulk, inexpensive wine imports that are being blended with California wines and sold by California wineries as “American” appellation wine. Much of this imported bulk wine is coming from Australia, which is burdened by excessive grape and wine production.
This flood of cheap imports is happening when California grape growers leave grapes hanging due to a lack of winery buyers.
The California Association Wine Grape Growers (CAWG) believes California wineries may be bending a law that permits blending of two wine appellations and calling it American wine.
Karen Ross, CAWG president, said shipment of bulk California wine to other areas of the United States for blending into other states' wines is common.
“We ship a lot of California to the East Coast and to places like Michigan and Ohio where they grow wine grapes, but do not produce enough wine to meet growing demand for wine. This is good for California wine because it ultimately helps increase wine consumption of American wine,” Ross said.
The law states that 25 percent of one appellation can be blended with 75 percent of another.
What CAWG is questioning is whether the law actually allows the blending of foreign wine with domestic wine and calling it American.
“No other country allows blending of foreign wine with domestic wine,” Ross said.
“California grape growers made a significant investment in wine grape vineyards on the signals from wineries that there was a bright future in California wine.” Those same growers are seeing at least some of that bright future being taken by imports.
“We are definitely looking into the blending of foreign wine with California wine and calling it American wine, but are not sure what actions we will ultimately take,” she said.
This surge in foreign wine exports as California growers are without viable markets for wine grapes is particularly frustrating, since growers recently supported a Wine Institute proposal to blend vintages/years to help sell and improve the quality of California wine.
CAWG grower members also believe they are being short changed in the PR department with “critter wines” such as Yellow Tail from Australia getting all the U.S. press.
“CAWG Chairman Rodney Schatz (Lockeford, Calif.) believes California wine grape growers have a good story to tell about California wine growing,” Ross said.
“There is added value for consumers to purchase California wine because of the sustainable grape growing practices in the state,” she said.
CAWG has committed to raising about $700,000 over the next two years to fund a PR campaign extolling the virtues of California wine It will target the wine trade and media.
“The real competition in this foreign versus domestic market is in the $5 to $10 price points. This is where the greatest volume of wine is sold, and I don't think growers are going to roll over and give this to someone else,” she said.
The goal of the PR campaign is maintaining and growing California's market share in a growing U.S. wine market by telling California grape growers' story, she said.