Cheers, to sipping down prices of some fine wine

Rogue Valley's oldest winery lowers its prices on signature vintages

The owners of the Rogue Valley's oldest winery are taking a calculated risk this week.

Valley View Winery in Ruch is slashing the prices of several vintages, including 1,000 cases of its 2008 chardonnay and a similar amount of 2007 merlot.

"I don't think it will hurt selling the chardonnay for $8 or $9 for a few months when in a few years it will be back to the normal price, closer to $12," Valley View Winery President Mark Wisnovsky said. "The merlot will be at $9 to $10 instead of $14 to $15."

The rationale is simple, but the move isn't one every winery can afford to follow.

Wine consumption has remained steady, but the price consumers are willing to pay has tumbled, Wisnovsky said. As a result, Southern Oregon wines are losing market share to competitors from other states and countries. The region's wines commonly sell in the $15 to $25 range.

"Unfortunately, not a lot of Oregon wines are in that hot price point of $8 to $15 per bottle," Wisnovsky said.

Here and elsewhere, some growers are having a hard time finding buyers for the looming harvest. By moving existing inventory, he said, Valley View then can acquire local grapes.

"All of the chardonnay we sell is from grapes we've purchased from local vineyards," Wisnovsky said. "Right now, we have enough in stock at the older, higher price where there is no need to buy chardonnay; but that's not what we want to happen. A lot of wineries would say fine, we're just not going to buy more fruit this year. Our thought is that we want to keep the industry going.

"If we sell a thousand cases of chardonnay at the same price it takes to replace that wine, we can buy 20 to 40 tons of fruit we would not otherwise buy."

Valley View has been around since 1976. Its vineyards, winery, land, buildings and equipment were long ago paid off, he said.

"Every winery in Oregon is in a different situation," said Valley View Vice President Mike Wisnovsky. "Most new wineries have much higher cost of production than Valley View and would not be able to lower wine prices to the extent we are. No one wants to sell a product below cost, but sometimes we have to think about supporting our grape growers and giving our loyal customers a break."

From that perspective, it's easier to cut against the grain of conventional wine-selling wisdom.

"The wine press is adamant that you don't lower your prices," Mark Wisnovsky said. "They say once you lower your prices, it's difficult to raise them again. Quite frankly, that may be true. Everyone knows that this is not a normal downturn."

He likens the move to the housing market.

"We're not reacting willy-nilly," he said. "I think people understand you can buy houses for less now than you will in the future. When the price goes up, you realize you should've bought it at the time the price was lower."

The move comes as little surprise to Pat Spangler, president of Southern Oregon Wineries Association.

"We have a surplus of grapes for the first time in quite a few years," said Spangler, a Douglas County vintner. "It takes three to five years for grapes to come on line after they're planted. After years of new plantings, at some point it was going to catch up."

As of last year, the U.S. Department of Agriculture reported 3,085 acres were in grape production in Jackson, Josephine and Douglas counties.

Spangler said the latest national figures show a 4.7 percent increase in wine sales. However, what consumers are buying has changed.

"People are trading down," he said. "If they were buying $30 bottles, now it's $18. If was in the low $20s, now it's in the $10 to $12 range."

He said Valley View has a larger inventory than many of the region's wineries.

"It's like in any business, if you have an inventory, you cut the price and Valley View did it sooner rather than later.

"If growers are willing to cut prices — and there is a lot of discounting going on — that's good for them. As a general rule, anything that is going to make wine sell faster is good for someone growing grapes."