South Jersey wine sellers look to expected drop in California wine prices

South Jersey wine sellers look to expected drop in California wine prices
by Colt Shaw, Staff Writer

SOMERS POINT — South Jersey wine lovers might soon be able to buy their favorite California wine at a slashed price.

An overeager harvest last year and dwindling interest among drinkers are responsible, experts say.

And Passion Vines founder Michael Bray thinks the trickle-down could reach our area as soon as sixth months from now.

“I believe we will see prices coming down in the not-too-distant future,” Bray said. “I don’t think it will happen for all price levels, but it will occur.”

Massive operations will be quicker to react than small, prestigious vineyards, said Bray, who also serves as the director of operations at liquor store Passion Vines, which has locations in Somers Point and Egg Harbor Township.

“If the grape and wine glut persists, everyone will have to consider lowering prices,” Bray said.

CNN Business this week reported that, in part because of a surplus of grapes in California, consumers can expect the lowest wine prices in five years. And those prices could last up to three years. In his State of the Wine Industry 2020 report, Rob McMillan, executive vice president and founder of Silicon Valley Bank Wine Division, noted decreased demand leading to price drops across the industry. It is not a “mere prediction,” he wrote.

“Today, the supply chain is stuffed,” McMillan wrote. “This oversupply, coupled with eroding consumer demand, can only lead to discounting of finished wine, bulk wine and grapes. ... Discounting is already taking place across each point in the supply chain.”

Those price drops are on their way to South Jersey, according to wholesalers, liquor store owners and winery operators. They have mixed opinions on how it will impact their businesses, but wine lovers can expect to reap the savings for the foreseeable future.

Scott Quarella, vice president and part owner of Bellview Winery in Landisville, said consumers might see lower prices at liquor stores but producers will mostly be unaffected, as they grow their own grapes. Bellview’s prices will stay the same, he said.

“Personally, I don’t think there’s going to be an effect in New Jersey. I think that a lot of what is being talked about is the effect on international wine markets,” Quarella said. “So if you look at the producers in New Jersey, we are mainly just selling here, in our state, or potentially in the tri-state (area) for some of the bigger guys.”

Most of Bellview’s business comes from visitors to their premises, Quarella said, but local wineries reliant on sales at local liquor stores could be hurt by cheaper wine on the shelves.

“That could absolutely be a problem for them, because it’s competition,” Quarella said.

Ronnie Sanders, president of Vine Street Imports in Mount Laurel, Burlington County, said one move he’s seen from California producers is bottling a more expensive wine under a different label and selling it at a slashed rate. This way, they can use up an outsized harvest while not damaging the brand of their more expensive wines.

“If you’re a smart buyer, there’s definitely some deals out there,” Sanders said. “Of course (the wineries) are not gonna tell you, ‘You can buy my $100 wine in my $40 bottle.’ They’ll tell you it’s a selection.”

A number of international issues impacts wine sales, Sanders said, and helps domestic producers in general. A 25% tariff on many European wines imposed by the Trump administration in October, in conjunction with the devastation of the crop in Australia by runaway wildfires, could leave consumers with little choice besides domestic wines, for example, Sanders said.

What consumers can expect before a price drop, Bray predicts, is an overall jump in the quality of wine, as some wineries will sell their excess to bulk producers at a reduced price, to be bottled under the new suppliers’ name.

“You’ll see wine being put out into the marketplace with a California designation and nothing more,” Bray said, “because the person who sold it will not want their name attached to it without the quality control.”