Big BC Wineries Reducing Prices – But Do They See the Real Problem?

Interesting column on the front page of the Vancouver Sun Business Section today regarding wine pricing. In a nutshell, it says that some of BC’s largest wineries — CedarCreek, Jackson Triggs, etc. — have discovered that wine drinkers are moving to spend less money on wine, so they are going to adjust the price or number of offerings to address that.

Now, I don’t have access to whatever research they have, so can’t comment on the so-called reason for their action. But in reading the piece, it seems to me that the story — and perhaps the industry — is missing a couple of key points:

1. Overall pricing has gotten out of hand regardless of consumer reaction

In my opinion, over 90% of BC wines are overpriced, both at the high end (look at all the $40+ offerings) and the low end (when was the last time you saw a ‘non-bulk’ BC wine that was any good for under $14 or $15?). Even accepting the arguments around the price of Okanagan real estate (and how that translates to wine prices) and marketing to the American tourist, this is ridiculous. Yes, there are a small number of the smaller wineries that provide value at both ends of the price spectrum (La Frenz, Kettle Valley, Blue Mountain, Nichol in the Okanagan; Averill Creek on the Island; and Mt. Lehman, and Vista d’Oro and in the Fraser Valley lead my list). But most are, frankly, selling wine way above what it is worth.

2. What happened to pricing based on quality?

Another point is that, particularly at the big wineries — Mission Hills, Jackson Triggs, Inniskillin — the whole concept of pricing based on relative quality has gone out the window. These three companies dominate the market in BC but, in my opinion, it is hard to find a good value wine at any price point from any of them. I have now problems with charging top dollar for the best product — such as Kettle Valley and Blue Mountain Reserve Pinot Noirs, Nichol’s Syrahs and La Frenz’s higher end wines — but I also visibly bristle when the same kind of prices are charged for wines that aren’t even close to being that good.

3. It’s time for the big guys to show some leadership in price and quality

Finally, while I completely acknowledge the role that the big guys mentioned above have played in driving the BC industry forward, its time they offered a better quality/value ratio for consumers. If Mt. Lehman can sell a great $14 Cabernet-Foche, and Domaine de Chaberton a gorgeous $11 Rose, and La Frenz unbelievable $20 white wines, why can’t the big guys with their massive production?

So there’s my rant for today. Yes, there is a problem. But it is more than just a change in consumer price interest. It has to do with quality — and value.

SB

http://www.sbwinesite.com

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