Wine 19

The Future Cost of Wine w/ the Euro @1.54...

Joe H | Mar 8, 200803:02 PM

I drink a lot...of wine. Over the years I've built something of a cellar with almost one thousand bottles now. My neighbors insist that if the world is coming to an end they are all coming to my house since I have enough wine to drink the entire neighborhood into blearly eyed oblivion-happily! Still, I enjoy wine a great deal. It is a pleasure, an indulgence and a shared moment with friends and with clients who become friends.

Over the years the cost of indulging my passion for wine has become increasingly more expensive with first, the introduction of the Euro and later, the depreciation of the US Dollar vs. the Euro. I've travelled on business in Europe for many years and have consistently brought back 8 to 12 bottles or more on each trip. I once had to open my suitcases at Washington's Dulles Airport when a hungry beagle sniffed my Chianti laced salami revealing to the inspectors a total of 18 bottles of serious Super Tuscans, Reserve Chianti and Amarone. They reacted as if I was a wino and, for me, that was fine since they laughed and only confiscated the salami not the wine. (Over time I've grown to know the beagle; today he is a friend. I've learned to applaud his good taste and sense of smell for what I am certain is his eventual dinner. I can only be thankful that his handler never introduced him to wine. The beagle would then be a complete gourmand!) Prior to the Euro when wine was priced in Lira, Francs, D marks, etc. a bottle purchased in Europe was generally half the eventual U. S. price when sold here. (I remember Solaia at 120,000 Lira with the exchange rate putting this at $60 or so!) With the switch to the Euro this changed, sometimes dramatically, but it was still cheaper to buy the same bottle of wine in Europe than in the U. S.

That is no longer true today. With most importers buying futures (does anyone reading this remember when Costco bought 2000 bordeaux futures and sold those wines at the second futures' price?) the wine that we see in a store, shop or wholesale club today is wine that was purchased with the Euro considerably lower than it is today. Americans' first introduction to the weakening of the dollar for a wine drinker was with the pricing of 2005 bordeaux which was/is through the roof. Please note that much of that seemingly exhorbitant pricing was with a dollar in the low $1.40 range.

I can offset the disproportionately expensive Euro by buying Australian, Chilean, New Zealand, Argentinian, etc. Except that the Australian, New Zealand and Canadian dollars are all at either 100+ year highs to the US dollar or close to it. I'm not certain how much longer Chilean, Argentinian-even South African wine will continue to be a bargain.

Ideally this could be offset by buying wine from California, Washington and Oregon except that all of these are going to be more expensive with winemakers believing that the market will tolerate this with the other alternatives (read everywhere else in the world!) being disproportionately expensive.

Summarily, we are entering a time when many of the things we have taken for granted are going to challenge what we are able to afford. Whether arborio from south of Verona or Biella, epoisses from France, Jamon Serrano or wine from Jumilla-it is all becoming increasingly more expensive.

I wonder if those who are reading this understand that we are approaching a time when that which we love to eat or drink may no longer be affordable to many of us. Not a political comment but a practical comment: the continually weakening U. S. dollar is going to have a significant impact in our pockets if we want to continue our love for wine and the food which we import.

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