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Grape prices rise in California, ‘Sideways’ effect reversed

Grape prices in California have hit a new high after a smaller than expected crop in 2011, amid rising demand for the state's wines around the world.

As long as it’s Merlot: is Sideways finally loosening its grip?

There are also signs of a reversal of the so-called ‘Sideways’ effect, with Pinot Noir prices falling and Merlot prices going up.

The state’s wine grape harvest was 3.34m tons in 2011, down 6.9% on 2010 and the smallest crop since 2008, according to the California office of the US Department of Agriculture’s National Agricultural Statistics Service (NASS).

Wet weather in winter and spring, delaying fruit set, were blamed for the decline, with California’s Wine Institute characterising the vintage as ‘challenging’.

However, it said there were some elegant, full-flavoured wines that were lower in alcohol than normal – the result of the ‘lighter and later’ harvest.

The red wine grape crush was down 6.5% at 1.92m tons, while 1.43m tons of white wine grapes were harvested, 7.3% lower than in 2010.

The average price of all grape varieties – including table and raisin grapes – was US$588.96 per ton, 8% up on 2010 and 3% higher than the previous record, in 2009.

Grapes from Napa County fetched the highest prices, raising an average of just over US$3,400/ton, up 5%, while grapes from Sonoma and Marin Counties fetched US$2,081.12/ton, up 3%.

Average prices for Chardonnay were up 5% at US$752.30/ton, while Cabernet Sauvignon fetched US$1,147.10/ton, 11% higher than 2010.

And, for the first time since 2004 there were signs of a reversal in the fortunes of Pinot Noir against Merlot, after the Pinot-loving hero of the hit movie Sideways boosted the grape’s fortunes. While Merlot prices rose 13% to $691.05/ton, Pinot Noir prices fell 12.7% to US $1,265.90.

Prices are being forced up by smaller than expected grape harvests, combined with rising demand, with US wine shipments – 90% of them from California – rising 4.5% to 345m cases in 2011.

Written by Richard Woodard

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