Wine economics and policy comments
Cal-Med Consortium
Dan Sumner
U.S. Wine Industry
• Wine: Highest-valued finished agricultural
product (for CA).
• Wine in US: $16.5 billion
– 2005 retail value of US wine market: $26
billion
• Premium wine (>$7) :
– Shipments increased by 13%
– Accounts for 35% of case volume
– 66% of winery sales revenue
U.S. Wine Industry (cont)
• Everyday wine (<$7):
– Shipments decreased by 2%
– Account for 65% of volume
– 34% of winery sales revenue
• 4th largest wine-producing nation.
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
Number of Wineries
Bonded Wineries
6000
5000
4000
3000
US
CA
2000
1000
0
Data source: http://www.wineinstitute.org/industry/keyfacts/ca_wineries.php
Winery Size Categories (By Case)
100.00%
90.00%
80.00%
70.00%
60.00%
% of Wineries
50.00%
% of Gallons
40.00%
30.00%
20.00%
10.00%
0.00%
< 1K
1K - 4K
4K - 10K
10K - 25K
25K - 42K
42K - 105K
105K - 370K
Data source: http://www.wineamerica.org/newsroom/sizedistribution.htm
> 370K
US Wine Sales Retail Value
30
25
$ Billion
20
15
Retail Value
10
5
0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Data source: http://www.wineinstitute.org/industry/statistics/2006/wine_sales.php
2004
2005
Wine & Winegrape Producer
Organizations
• WineAmerica: Wine producer organization
representing more than 800 members in 48
states.
• Winegrape Growers of America (WGA):
Lobbying arm of the national winegrape industry.
• The Wine Institute: Represents 975 California
wine producers and affiliated businesses.
• California Association of Winegrape Growers
(CAWG): Represents California winegrape
growers.
WineAmerica’s Priorities
A national vintners association focusing on
– Immigration Reform (AgJOBS)
– Specialty Crop Grants
– EAT Healthy Specialty Crop Bill
– Small Producer Credit
– Value-Added Grant Program
Winegrape Growers of America’s
(WGA) Priorities
• AgJOBS
• Relief for growers hit by Pierce’s Disease
• Funding for research into pest & disease
prevention
• Winegrape Research programs
• International Trade Issues
• Farm Bill Priorities
• Repeal of Estate Tax
• 2007 Agricultural Appropriations Bill
The Wine Institute’s Priorities
•
•
•
•
•
•
•
Interstate Shipping Laws
Labeling
Advertising Standards
International Trade
Sustainable Winegrowing Practices
Reduction of EU subsidies
Immigration reform (AgJOBS)
California Association of Winegrape
Growers’ (CAWG) Priorities
• Funding for Viticultural Research
• Reform of estate tax laws
• Prevent misleading grape origin and varietal
information on wine labels
• Opposed Global Warming Solutions Act
• Opposed bill requiring Farm Labor Contractors
to disclose to employees the names and
addresses of legal entities securing the services
of the FLC.
• Support immigration reform (AgJOBS)
International Trade Issues
• Promote multi-country, trade-facilitating
pact to recognize winemaking practices
authorized by a winery’s government
• Recognize place names of origin
• Simplify certification process for wines
traded internationally
• Push for reduction in EU wine subsidies