California shipments of wine have dropped in 2009 for the first time since 1993. As reported in the San Francisco Chronicle, sales figures show that consumption is up 2.1 percent nationally, but consumers are turning to cheaper imports from Chile, Argentina and Australia as global production exceeds demand. ”
The numbers announced last week by Woodside wine research firm Gomberg, Fredrikson & Associates analyst Jon Fredrikson at the Unified Wine & Grape Symposium in Sacramento. “As we basically had a financial heart attack, people just reined in their spending and were very cautious,” Fredrikson said. “They moved dramatically down to lower price points, below $5 and $7. Small wineries in the North Coast that sell bottles from $25 to $100 were basically shut out. Inventories backed up, and that just made it an ugly year.”
The biggest drop in wine sales is for bottles that retail for more than $20. Sales were off between 20 and 30 percent in 2009, Steve Rannekleiv, an analyst for Rabobank told the Chronicle. During the same time, sales for wines that cost less than $6 a bottle rose 5 percent.
As consumers have tightened their purse strings, bulk wine imports from countries with lower production and land costs have climbed. Between 2007 and 2009, imports more than doubled to 13 million cases to capture 32 percent of the U.S. market. “Argentina is the sleeping giant,” Rannekleiv said. Argentina has 510,000 acres planted in grapes, compared with 480,000 in California, which produces 90 percent of the wine made in the United States.
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The International Centre for Settlement of Investment Disputes in Washington, D.C., has awarded Sempra Energy $172 million according to a report in the San Diego Business Journal. The award was to settle a 2002 dispute involving the companyâ€™s 43 percent ownership in two Argentine natural gas holding companies. â€œWe hope that the government of Argentina will honor its legal obligations as we seek immediate enforcement of the award,â€ said Javade Chaudhri, executive vice president and general counsel for Sempra. Sempra had the interest in Sodigas Pampeana and Sodigas Sur. In a statement, Sempra says the dispute involved its efforts to recover the utilitiesâ€™ diminution in value that occurred as a result of measures taken by the Argentine government in 2002.
“Internet giant Google announced last week that it will open offices in Buenos Aires, reports Spanish news service EFE in Spanish-language newspaper El Diario/La Prensa. The Buenos Aires offices will serve as headquarters for all of Google’s Latin American operations. Latin America is the fastest growing market for the search engine giant, according to the report. Previously, Google’s only offices were in the United States and Ireland. The company made a foray into Latin America by opening offices in Mexico and Brazil, but now it will center its operations in Argentina. ‘Latin America is the fastest growing Internet business region in the world,’ said Google executive director Eric Schmidt. ‘It is growing faster than Asia, the U.S. and Europe.’ Schmidt said Buenos Aires was selected because it had the right ingredients for Google’s launch in the region.”
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