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US wine industry worth US$162bn as imports also rise
January 23, 2007
Panos Kakaviatos
Wine is worth US$162bn to the American economy, according to a report published in California.
According to the 25-page report by MKF research, all wine related industries 'account for more than 1 million jobs in the United States, for a payroll of almost $33 billion.' States which a few years ago were not even associated with wine reported tourism revenues to their wineries, it said.
Of the estimated $162bn, over half comes from what the study calls 'indirect' and 'induced' effects on economic activity. For example, where vines might replace crops, the wine industry has a 'ripple effect', increasing potential jobs outside the industry such as tourism.
Other contributions to the estimate include $33bn in wages in wine related jobs, $17bn in federal and state tax revenues, over $11bn in winery sales and $3.5bn in grapes sold.
Though fewer than 40% of US adult consumers drink wine even occasionally, data indicates that the US market is the only one in which demand is growing for wines over $5 per bottle.
'In fact, the US is among the few markets in which demand for wine is growing at all,' said the report.
It also stated that now, every American state sells home-grown wine, with US wineries increasing from 2,688 in 1999 to 4,929 in 2005 – an increase of 83%.
From 2001 to 2005, direct winery employment has also grown from 25,363 in full time jobs to 33,560 full time jobs across the country.
Representing nearly half of all American wineries, California remains the driving force of US winemaking.
Not all were optimistic, however.
'I read about the report, but I have not seen an increase in interest in American wines,' Mark Wessels of the Washington DC wine shop and importer MacArthur Beverages told decanter.com.
Wessels said this could be because Californian vintages have 'not been that great in recent years'. He said there had been less interest in expensive, cult wines.
'This may be an East Coast take on California wines, but even with the weak dollar, there has been a higher interest in Bordeaux 2005 and the Rhone wines. The 2005 Bordeaux vintage was the second biggest in sales after 2000. Sales of European wines have been strong,' he said.
The report also indicated strong import growth over the last seven years 'from 40m cases in 1998 to 81m in 2005.'
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