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Taking $5 wine seriously

Thanks to a glut, the bargain bins are overflowing -- and you can't judge a bottle by its price anymore.

January 08, 2003|James Ricci | Times Staff Writer

HERE'S how crazy the wine market has become in Southern California.

A serious Cabernet from Washington state -- the 1997 Staton Hills Late Release from Columbia Valley -- a wine that for years cost $15 a bottle, can now be found for less than a dollar.

And, when we in the Food section included it in a blind tasting of 22 wines selling for less than $5, it finished in first place, far ahead of the pack.

The Staton Hills Cab may be the ultimate symbol of how the worldwide wine glut has lowered prices and raised quality, especially in Southern California, the most competitive wine market in the United States. Vintage wines selling for less than $5 are more in evidence on the shelves of local retailers than ever before. Hi-Time Wine Cellars in Costa Mesa already carries two dozen such wines, and it expects to have more as wine prices continue to drop. The Wine Country in Signal Hill offers eight, and Trader Joe's stocks no fewer than 170.

While that's great news for wine lovers, it's also confusing: You can't rely on price to tell you everything about the wine anymore. A $5 price tag used to say something about quality (and it usually wasn't good). Now, even a 99-cent wine can be eminently drinkable, as vintners churn out vintage bottles of everything from old-vines Grenache from Spain, to riserva Chianti from Italy, to single-vineyard California Sauvignon Blanc.

So, how can you tell when a wine will "drink" more expensive than its price?

We talked with vintners who have so much good stuff that they're bottling the excess under inexpensive secondary labels, with wholesalers who are on to good Spanish reds that can sell for $4.99, with retailers who aggressively play "the spot market" to score great buys.

A respectable appearance

The new cheap wines don't look like the jug wines that traditionally have inhabited that region of the price scale. They tend to be vintage wines with specific appellations. The Staton Hills Cab is a case in point. In 1999, the Staton Hills winery was bought by California's Chalone Wine Group, which changed the name of the winery to Sagelands Vineyard, installed a new winemaker and began buying grapes from growers other than those who'd sold to Staton Hills.

Chalone found itself with a backlog of Staton Hills inventory that it needed to sell off. Under ordinary circumstances, the '97 Cab should have been released in 1999, but the backlog was such, says Tom Selfridge, Chalone Group president and chief executive, "that it took a while to get to the '97, frankly."

The '97, which would have sold for $15 under the previous ownership, wasn't released until last year (ergo the designation "Late Release"), after picking up added character in barrels and tanks while waiting its turn. The winery tasting room priced it at $5 a bottle for case purchase. The 99 Cents Only stores, however, acquired a large supply of it at a far more advantageous price.

Chalone Group will retain the Staton Hill label, but only for wines made from grapes that don't make the cut for the new, more ambitious Sagelands label. "Any future Staton Hill wines," Selfridge says, "will probably be under $10 -- but definitely above 99 cents."

During the economically fecund 1990s, California wine-grape acreage swelled by 72%, from 332,000 acres to 570,000. From 1991 to 2001, shipments by California winemakers increased from 375 million gallons to 449 million, according to the wine industry consulting firm Gomberg, Fredrikson & Associates. During the same period, wine imports to the United States more than doubled, from 60.6 million gallons to 127 million.

Demand, however, has proven less elastic than supply, and a lot of the new excess has found its way into bargain-priced second-label brands by notable producers and into the mixing tanks of bulk producers who bottle it under the labels of in-name-only wineries, or under private labels for mass retailers.

In Southern California, retailers' playing of the spot market further adds to the supply. "On a day-by-day basis, there are small amounts of wine that fall through the cracks in the system," says Robert Rogness of retailer Wine Expo in Santa Monica. Distributors sell good wine cheap to make space in the warehouse or to undercut another brand, he says.

In many states, wholesalers and retailers are prohibited by law from selling wine below cost. This is not the case in California, where, Rogness says, "if somebody wants to lose money, he's not constitutionally prevented from doing so."

The current vagaries of the industry have produced bargains for retailers who can react quickly. In many cases, wine shops can quickly recoup their expenditures in these transactions via e-mail, which enables them to alert customers to hot deals on limited items.

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