Light Crop for California Vintners in 2008

            Berkeley, Calif. - Wild weather produced a lighter wine harvest in
            California last year, which analysts say could provide breathing
            room for an industry coping with the budget-tightening effects of
            recession.

            "In a way it's a blessing in disguise because this does offset some
            of the inventory growth that people experienced in 2008," wine
            industry consultant Jon Fredrikson of Gomberg-Fredrikson &
            Associates in Woodside said Wednesday.

            There were just over 3 million tons of wine grapes crushed last
            harvest, according to figures released by state agriculture
            officials Tuesday. That was down about 6 percent from the year
            before. Looking at just red wine, the drop was sharper, down 9
            percent, to 1.7 million tons.

            Last year was the third harvest in a row with moderate to light
            yields following a bumper crop in 2005.

            "This recession has hit at a time in the supply cycle where we were
            pretty balanced," said Steve Fredricks, managing partner of
            Novato-based Turrentine Brokerage, a wine grape broker.

            California wine sales growth in the U.S. slowed last year but still
            posted an increase of 2 percent with an estimated 196 million cases
            shipped, according to preliminary estimates by Fredrikson.

            But sales have softened in restaurants, which is where many small
            wineries sell most of their wine, and retail consumers appear to be
            trading down to cheaper bottles, Fredrikson said. "They're still
            drinking wine; they're just looking for value," he said.

            Weather was a big factor for 2008, with lower-than-normal rainfall
            in the winter followed by extended frosts in April that reduced crop
            quantity in many areas of the state.

            Some areas were hit with fall frosts as well, further lowering
            yields.

            The remaining crop seems to be good quality, but there probably will
            be less wine made from the '08 vintage than other years, said Kevin
            Sass, winemaker at Justin Vineyards & Winery in Paso Robles.

            That might be good for overall market equilibrium, but isn't good
            news for growers, who get paid by volume, or for those vintners who
            grow most of their own grapes and now have less fruit to show for
            their efforts and outlay.

            "From a consumer standpoint there's less out there, but the
            quality's still there. But from the producer's standpoint, if you're
            growing grapes or producing wine off your own property, then there's
            been better years," Sass said.

            Grape prices on average were higher in 2008 than the year before,
            according to the state report. Red wine grapes averaged $643, up 3
            percent from 2007 and white wine grapes averaged $539, up 12 percent.

            Grapes from the well-known Napa region fetched the highest price,
            averaging $3,390 per ton, up 4 percent from the year before.

            The white wine grape chardonnay was the most popular, accounting for
            just over 15 percent of the crush.