How the recession has impacted wine sales, CSUEB economics prof explains

• March 4, 2013 5:00am

The recession has impacted the nation’s overall workforce and the economy at large, but how has the U.S.  wine industry fared?  John Kiernan at CardHub.com spoke to Cal State East Bay Economics Professor and wine industry expert Tony Lima who said the recession has had surprisingly minimal impact on the wine industry as a whole. Read article.

“Wine drinkers tend to like wine,” said Lima.  I’ve heard the arguments in the past that people will switch from beer and wine to vodka because it’s cheaper to get a good high that way.  I think a lot of wine drinkers drink it because they like it.  In terms of the number of gallons purchased per household per year, I don’t think that changes very much with the business cycle.” 

What has impacted the wine business is the industry’s current  three-tier system of producers, distributors and retailers which has been in effect since the passage of the 21st Amendment and federal government regulations on how exactly to define wine in terms of alcohol by volume, how to tax it, and how to ultimately control distribution.    As a result, large companies that efficiently distribute large quantities of wine have now come to dominate the market.

Lima has published extensively on the wine industry, including an article on Ernest Gallo in the Journal of Wine Economics, “Ernest Gallo, 1909–2007: A Life in Wine (Fall 2007) (PDF).  He also runs CaliforniaWineFan.com, a site focused on Pinot Noir tastings, travels and economics.

KL