The cost of European wine is about to go up, according to a story in this morning’s New York Times. The dollar is weak, the Euro is strong, and while prices have remained steady in recent months, Boston retailers say they’re expecting a significant uptick in ’08.
“Our suppliers are saying there’ll be price hikes at the beginning of the year,” says Howie Rubin at Bauer Fine Liquors on Newbury Street in Boston. “It’s not the cost of the product going up, it’s the cost of the weak dollar.”
This is bad news for lovers of Barolos and Burgundies, and Rubin expects his customers to start buying more wines from alternate regions like Australia and South America. “People are loyal to their budgets and pocketbooks, as opposed to loyal to a particular country,” he says. “If they’re fans of a $12 Cabernet from France that goes to $20, they’ll switch over to a Shiraz or a Malbec for the same price. Funny thing is, Amercian wines are certainly not going down in price because of it. The Californians seem to think they can justify going up in price, too.”
So what to do? David Gordon of Gordon Fine Wines & Liquors recommend that connoisseurs stock up on European wines, scotches, and Cognacs. “You might want to buy French wines now, particularly champagnes,” he says. “I still think there are a lot of good values coming in from Spain, so I’m not particularly concerned about that.”
As to where this will all lead, Rubin says it’s just a matter of waiting out the cycle. “Hopefully the dollar will rebound and things will level out,” he says. “But it’s a tough time for the small wineries with no corporate backing to lose their American market. They’re getting a double whammy with the increased cost of gas.”
Everything is cyclical and hopefully the dollar will rebound and things will level out. It’s a tough time for the small guy with no corporate backings.