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Recession Squeezes California Grape Supply

Posted on Tuesday, September 20, 2011 6:24am

A new report says the recession is putting the squeeze on California’s wine grape supply.

Robert Smiley with the UC Davis School of Management surveyed the heads of 29 leading wine operations. He says the C-E-Os foresee a grape shortage.

“That is because people have not planted in the last five years given the difficulties in the financial sector. That usually requires financing from banks and they’ve rather reticent,” said Smiley. “So as demand has grown and vines need to be pulled out when they reach the end of their life, they’ve not been going back in.”

He says the unusually cooler weather earlier this year in California has compounded the problem by significantly reducing this year’s wine grape yield.

Smiley is presenting the highlights of his survey to the 20th annual Wine Industry Financial Symposium meeting in Napa Tuesday.

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