Downpour Downunder

So, if a wine is more expensive it follows that said wine should be better, right?  Well, no.  Both Australia and New Zealand have experienced a cool summer this year and are looking at a developing weather bomb that may damage much of the (already late) grape harvest.  The losses in volume have to be made up and so this might be passed along as higher prices for those wines.  In short, the same factors that dictate price in every consumable are the factors that dictate price for wine: supply, demand, production costs and quality.  Therefor, when enough of the factors are impacted negatively producers are faced with having to increase prices to cover losses and meet production costs or suffer losses and not have funds for the next season's plantings.

Does this mean Australian and New Zealand wines for the 2012 vintage will be expensive?  Well, no.  Producers still have the option of augmenting yields with imported grapes to offset any damages that might occur and, governments have the option of subsidies for crop losses.  However, if you are a fan of these regions' wines, you may have to do your research prior to purchasing to avoid disappointment.  It will also mean depending on barrel tasting to determine the quality.  Certainly, if barrel tasting shows good signs and yields are reduced, the best of each region will come in at a much higher price.  Lower end wines will probably see some "enhancements" through technique and imported grapes and keep the prices within sale-able range.

I will also add, there is nothing to say that the crops will be damaged prior to harvesting and they may reach above average yields, but with a cool summer and late harvest the wine world will be interested to see how the Kiwis and Aussies respond.  And, I think this is just a great illustration of how wine prices are determined and how various regions respond.

The other point of interest is the 2011 season here in Ontario and upper New York wine regions was equally atypical with an extremely wet harvest.  It will be fascinating to, eventually, get to tastings between these four regions' products from the 2011/2012 vintages.  I love my hobby.

Edit: Here is an interesting story that will also illustrate how wine prices are set.