Wine away your financial troubles

AP

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PARIS (AP) — Is the world drowning its sorrows in cheap wine?

An industry group says that more wine could be consumed globally this year, thanks to crisis–fuelled demand for cheaper or discounted tipples, particularly in the United States.

An industry group says more wine could be consumed globally this year thanks to crisis–fuelled demand for cheaper or discounted tipples, particularly in the United States. Photo AP

While that might benefit some low–end producers, the organization’s director cautioned wine growers to resist what he called the "massive pressure on prices," which erodes profits.

"If you cut too much, it’s difficult to go back to your original price," Federico Castellucci told The Associated Press.

After years of steady growth, global wine consumption started to retreat last year, along with the rest of the world economy.

The International Organization of Vine and Wine said that erosion may have halted as wine growers battled to maintain sales volumes by cutting prices and as more wine is sold in bulk.

It predicts world wine consumption should rise by 4 per cent to 6.5 billion gallons in 2009 from an estimated 6.4 billion gallons last year.

"People who want to keep drinking are buying cheaper wines," said Castellucci, noting that holiday season purchasing has not been tallied and that this year’s consumption could yet fall.

He said that the United States — second only to France in terms of total wine consumption — has "continued to import but with a strong attention to prices."