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Friday, December 07, 2007

Drink up: Wine prices to rise

It Is CertainAs previously mentioned here, Australian wine prices are due to start climbing for a variety of reasons, including drought, flood, the end of the Aussie wine glut, the newfound strength of the Aussie dollar and the weakness of the U.S. dollar.

The weak greenback is also going to cause the price of wine from Western Europe to shoot up in the next three to five months, according to industry experts. Producers have been resisting raising prices because they didn't want to lose market share, but they don't want to lose money either so it's just been a case of putting off the inevitable. Wines from Chile are also likely to rise in price, since that country's currency is relatively strong compared to the U.S. dollar.

Prices for wines tied to the Euro are predicted to rise from 10 to perhaps as much as 30 percent in 2008. After that, look for good values from France (where there is still a "wine lake" of surplus juice), particularly from the less prestigious appellations such as Languedoc, and from Argentina, whose currency is not currently gaining against the dollar.
J. Silverheels Gray, 9:30 AM