Leave 'em hanging, boys
Well, business cycles come and go. There are periodic wine gluts, which are not always directly connected to business cycles -- bountiful harvests in several wine regions can skew prices for a season or two.
But the really significant piece of information in the article comes at the end:
Danny Brager, vice president of beverage alcohol at The Nielsen Company, said, "When we last looked at wine at price points north of $20, we saw declines at each of them. It would seem quite logical to us that consumers are stepping down from what they used to spend per bottle, to a lower outlay."
He also found consumers were quite happy with the quality of wines they were buying for less than $20.
Marcelo Papa echoed that sentiment. Papa is one of the four chief winemakers for Chile's Concha y Toro, which unlike its competitors has seen sales of most of its brands rise 30 percent this year.
"Compared to 20 or 30 years ago, wines under $20 or $15 are of much better quality today. They're just better made wines." he said.
(Underscoring mine.)
It's normal for people to scale back in hard times, so the crash of the $20+ segment is no surprise. It's only a slightly greater surprise to read that some cult wines are offering deals.
But the truly significant point is that improved quality from every wine region in the world, combined with vast production, threatens the medium-term viability of the over-$20 market. Why spend $50 or even $25 for a bottle when there's as good as one on the shelf at $20 or $15?
We see this problem quite clearly in Italy, our source. Makers of perfectly fine but unexceptional wines continue to demand 5, 6, 10, 15 euros a bottle. When we explain the realities of the economic situation in the United States -- not to mention the pitiless competition from all the world's wine regions -- the producers must think we're telling them a tale, something meant to entertain and swindle them. As an Italian acquaintance of mine who lives in New York said recently, "They are living in a fantasy. No one's buying there and no one's buying here at those crazy prices." He predicted a collapse of asking prices for wine after the first of the year.
We'll be there, bargaining hard for everyone's sake.

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