Surplus in grapes may not mean cheaper wine prices

FRESNO, Calif. (KFSN) -- The wine industry is dealing with too much of a good thing - a statewide surplus estimated at 5%.

Tanks are already full, so a large number of grape vineyards didn't even get picked last year.

"For the first time in probably three to four decades, we saw a number of grapes that were left to hang on the vine that were unpurchased by buyers," says Allied Grape Growers President Jeff Bitter.

Bitter says the surplus hit growers hard in the central coast, north coast and Lodi area.

Some valley growers were able to turn to secondary markets and sold their grapes for brandy and grape concentrate.

We have an excess of Cabernet Sauvignon and Pinot Noir, but Bitter doesn't expect a dramatic drop in wine prices.

"The fact that grape prices are down alone doesn't necessarily mean wine prices are going to come down," Bitter said.

Bitter says the grape cost amounts to just 15% of the cost to make a bottle of wine.

"What would drive prices down more for wine would be the fact that there's an over-supply in wineries, and they're going to look to discount inventory in order to move it," Bitter said.

Winegrape acreage in California grew 20% over the past decade, but wine shipments have slowed in recent years.

To correct the supply situation, Bitter believes 50,000 acres of wine grapes need to be removed, including several vineyards in the valley.