Dear MEL Topic Readers,
American consumers are experiencing sticker shock for domestic wines.
How did US bottles get so expensive?
Wines in the US have become more expensive, but not just because of
rising demands. During the Covid pandemic, alcohol sales spiked as many people were
forced to stay home and needed comfort. They had an extra budget allowance to
buy more expensive wines than they used to buy as they could not dine out or
travel. This allowed winemakers to raise prices to offset the rising production
costs, including bottles, labels, corks, capsules, and labor. None of these improved
the quality, flavor, or taste of the wine, though. After the pandemic, the
demand declined but the prices stayed high. Winemakers are afraid that consumers
might perceive lower prices as having lower quality. Also, the cost to bottle
wine is nearly the same for almost any wine. That’s why prices of wines in the
US are staying high. But if there are no good affordable wines, consumers are
likely to pick alternative drinks, such as craft beers or sparkling alcohol
drinks. Winemakers seem to need sound strategies to manage today’s and future
business.
Enjoy reading the article and learning about the pricing mechanism of
US wines.
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