Entire US wine exports to China dropped by 25% in 2018. Probably a lot worse in 2019.
Higher end wine like Yao Ming dropped by half. I cannot imagine the drop at Opus One. What other Napa wines are very popular with the Chinese consumers? Caymus? Silver Oak? What happen to the extra inventory?
They sit on the unsold inventory, continue to portray an image of exclusivity, try to maintain their elevated price point for domestic buyers, and hope and pray that the headwinds abate and they can sell off their backlog at a somewhat decent profit margin?
That, or they have a blowout partay with friends and family and take down 1/5th of the wines that were once destined for overseas… And yearn for a time when we had an administration that had the ability to entertain a second derivative thought…
They’ll probably learn from the Bordelais and stockpile it all while continuing to jack up prices on new vintages. I don’t know if banks here allow you to borrow on the marked-to-market value of your inventory but if they do I’m sure they can keep this going for a while
We try to develop new markets if we are capable and so inclined. However, the impact is felt.
Finding markets of such size, with sufficient wealth, as well as unaffected by other tariff activity is more than a small challenge.
See Bryant family thread.
Sounds like Napa is dead at retail in China.
Good, hopefully prices will start coming back down and I can buy more of what I like.
Yes, because that is exactly what will happen. Land prices in Napa will clearly go down as well due to this, right?
I have no idea. I said hopefully. I really mean that. Time, and many other factors, will tell what this may or may not do.
Does anyone know how much of a presence Napa wine has in mainland China? Not that much, I would have thought, but I have no statistics to hand.
https://www.northbaybusinessjournal.com/industrynews/wineindustry/8733194-181/wine-exports-china-first-half-2018
Total U.S. wine exports to China for all of last year were $78.7 million
1.65 million cases (implies $48/bottle and 140 million bottles)
Third-largest market for U.S. wine exports last year by value and volume, after the European Union and Canada
About 90 percent of U.S. exports to China come from California
the import volume of wine in China reached 729.68 million liters in 2018 [implies 1b billion bottles)
These two articles imply US is 14% of imports by volume.
The Globe article says top importers by value are #1 France, #2 Australia, #3 Chile
But discussion here has focussed on high end Napa, rather than California…
Of course, I may be totally mistaken!
“Our offer today is from a premier Napa winery that we cannot name . . . cough, cough, Schmopus One, cough cough . . . that we are able to offer to you as a Mystery Wine!”
Trade wars are good and easy to win. What is wrong with you people?
What is the gist of that Bryant family thread? Revenue fell by 50% while price went up by 25% pre trade war? 2% APR on 100M? I guess a few clients should be in touch with her, if not already.
When was he last time you saw even Monte Bello drop in price?
We all know that it usually does not work in that manner. It is more likely that the parent company finally reaches a point it can no longer sustain and finds that it needs to sell off or forclose or move on. The new company will come in, rebrand and prices may start off lower.
Around the time of the recession, '01 Monte Bello ended up on one of those discount sites (woot, last bottle), where my sister picked up some. I think bottles like that would quietly end up there, retail markdown, or on auction if needed, rather than lowering the winery price.
Sales fell. But there seem to be a lot of sui generis factors there – namely the personalities involved. Not really a reflection of the market.