Small Town News

Sonoma County growers concerned about grape contracts

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As the Sonoma County grape harvesting season is looming, many local growers are reporting that they have been unable to secure contracts with wineries.

Tim Ward, owner of Sky Pine Vineyards and producer of Bobdog wines reports that he only has a contract for a third of his grapes, and most of the growers he has talked to are in the same position.

"Last year was a down year in production, and wine sales are up. There is a demand for grapes, so this dichotomy is strange. Why aren't they buying grapes?" Ward wondered. It could be that the wineries are wanting to take advantage of depressed prices. "Everyone I've talked too has the same dilemma and we are somewhat baffled."

Ward wonders if wineries are "running scared" because of the economy. Wine sales are up four percent, he noted, but he also pointed out that super premium wine sales in the $25 and up range are down. Most people are sticking to the $10 to $15 range.

Another local grower confirmed that "A lot of people don't have contracts." This grower believes that wineries are holding out because they know the grapes are here if they want them. "They generally set the price," he noted.

Some growers are saying that winery representatives won't even come and look at their grapes. Local grower Bob Sciaini sadly noted that if grapes aren't sold, they still have to be picked and disposed of, which adds to the farming expense. "It's sickening when you have to do that," he said.

Dan Braccialini who grows Zin-fandel and Cabernet grapes just north of Cloverdale agreed that this is a huge problem. "I do have contracts, but the total tonnage of the contract is all they will accept. Because of the economy, they are limiting us to that tonnage and no more." Braccialini said that it never used to be a problem and the wineries would take extra tonnage if he had it.

"I'll let them hang as long as I can, but then I'll have to cut them and just disc them under." Braccialini said in his talks with other growers he has learned that some have whole vineyards that are not contracted for. "Some don't have anything sold. The wineries are just not buying." He also said that he works with a broker from Southern California who said the same is true for the whole state.

Tim Frey, President of the Sonoma County Wine Grape Commission, confirmed what growers are saying. Frey said there is very little' buying activity going on right now. "Nobody is really moving aggressively for a variety of reasons," he said.

Frey reports that wineries are simply concerned about their sales and are uncertain about what is going to happen next year. It all hinges on the recession and the economy and is different from previous cyclical ups and downs of the grape business, in that contrary to the usual scenario for a down-turn, last year's grape supply was light and inventory of wine is relatively low.

"The recession has affected their [the wineries] ability to generate cash flow and obtain credit, so it is a very conservative market," Frey said.

He also confirmed what Ward said that the strength in the wine market is in lower cost wines. Frey said there was real strength in the $10 and under and very positive growth in the $10 to $15 market. "Above $20 has been off and if you are a brand that sells in restaurants your sales are way off."

The winery's financial people are saying: "In this economy, keep it tight."

In 2008 the average price for Cabernet Sauvignon was $2300 in Sonoma County and Chardonnay was going for $2,000. Frey said he has heard of some sales being made but they are well below both of last year's figures.

The Sonoma County Wine Grape Commission represents growers from both Sonoma and Marin counties. The commission supports growers by marketing grapes and wines to both the wine trade and to consumers to create demand for Sonoma and Marin County grapes, according to Frey. Growers contribute to the commission through an assessment on grape sales.



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© 2009 Cloverdale Reveille Cloverdale, California. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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