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It's sour grapes for wine drinkers

Abigail Townsend
Sunday 12 December 2004 01:00 GMT
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Wine lovers are set for a bleak new year after experts predicted a hike in the cost of their favourite tipple.

Wine lovers are set for a bleak new year after experts predicted a hike in the cost of their favourite tipple.

The industry is bracing itself for price increases of between 50p and £1 a bottle as a series of long-term cost issues start to bite.

The surging price of oil has led to higher freight charges, while fluctuating exchange rates worldwide mean that producers' margins are being eroded.

So far, most have taken the hit directly rather than pass increases on to consumers. Oversupply in many areas has also helped keep the cost of wine steady.

But as supplies start to even out, experts now agree that producers will find it hard not to raise prices in 2005.

"It's pretty obvious that we're going to have an upward push on prices," said one director at a major wine company. "The squeeze is on, there's no doubt about it. A hell of a lot of Australian producers are going to have to put their prices up. Lots will take it up by at least 50p, possibly a £1."

However, Old World producers - battling with the strong euro - are also expected to follow suit and increase their prices, while the cost of champagne is predicted to rise because a severe frost in 2003 dented supplies.

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