Domestic wineries have seen the cost of most goods go up, including bottles, labels, tanks, barrels, and grapes, and their pricing may reflect this.  At Honig, we made the decision to hold our prices this year despite these cost increases.  We believe that it is important to continue to deliver high quality and good value, and to maintain our loyal client base, especially under challenging market conditions.
 
While wine importers are the ones who price imported wines in the U.S. market, they cannot take all the blame for higher prices.  Part of their challenge is that they place their orders overseas and commit to pricing sometimes twelve months before the wines are available to the U.S. consumer.   This makes sales predictions very difficult.  Overseas wineries are vulnerable to currency fluctuations and transportation costs, and while they might want to continue making the same margins, they are forced to realize that if they do, their products are no longer competitive in the U.S. 
 
During difficult financial times, businesses tend to accentuate the curves in the economy by adjusting prices, hiring or firing employees.  This behavior is mostly transparent in financial institutions, but also holds true in industries across the board.  As wine sales decline, wineries that have taken price increases but are not meeting their sales projections are more likely to discount.  My prediction is that we will see more discounting as the holidays get closer.  
  
My experience has taught me (and there’s no rocket science here) that the average wine drinker will continue to drink wine, even during difficult economic times.  Consumers may tend to buy lower priced wines and wine labels they are familiar with and they trust.  But at the highest end of the spectrum, I doubt that first growths of Bordeaux, Grand Crus of Burgundy, the Sauternes market, and a handful of cult wineries of California will be affected.  First, because this is such a small part of the overall wine market; and second, because some people will consider investing in high pedigree wineries that have historically shown a healthy return on investment (especially with the stock market and the housing market on the decrease). 
 
In addition, Champagne (not all Sparkling wines) seems to be fairly isolated from economic challenges, since people can’t seem to get enough of it and Champagne production is as high as the CIVC (regulatory body in the Champagne region of France) allows it to be. 
 
For the sake of the consumer, I hope wineries are able to predict limited spending and are proactive in their pricing.  Exchange rates, cost of goods, and market conditions are universal and although they present difficulties, they present the same difficulties to all wineries and importers.  It’s up to each business owner and operator to decide how to respond.  Since we know that wineries, distributors, retailers and restaurants tend to sell wine for what the market will bear, my suggestion would be; that we all just continue to drink wine, feel good, and seek out the consistently good buys and enjoy good value.

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