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BC Wine industrys real problem is itself

A couple of years ago, finding a VQA red for less than $20 was a rarity.  Today, a quick search of the BCLDB website indicates 14 choices under $15.00, nine from Constellation Brands alone, marketed under the Iniskillin, Sumac Ridge, and Jackson Triggs labels.   The large industry consolidators are doing what Yellowtail did to the Australian wine industry as a whole – increase their own sales while overall decreasing demand for premium Australian wine, by lowering the brand equity of the region as a whole.  In the US, consumers got used to paying $6 for Australian wine, and premium wine sales suffered.

 

The major players have scale economies and wide ranges of brands so making attractively-priced plonk must make sense for them.  And make no mistake, they also make some very fine wine.  Unfortunately, owner-operated wineries need robust margins to counter their small volumes of premium wines, and this is threatened.  And if smaller wineries join the majors in the march down-market, the very factors that have made the BC wine industry such a success are threatened.  In the past, a winery could sell premium products at its tasting room for $30 and up, and its “everyday” wines for $20.  If consumers become reluctant to buy the everyday wines, because they have become accustomed to spending less than $15 in the liquor store, that will present a real problem.