Falling loonie drives up prices on premium U.S. wines
Prices of U.S. bottles are up as much as 25 per cent, say experts
Fall in love with the wrong Cabernet and it could cost you, particularly if it comes from south of the border, say industry experts attending this year's Vancouver International Wine Festival.
That's because the prices of many American bottles have been rising with the sinking Canadian dollar.
"We've seen as much as a 25 per cent increase in some of our wines, some of them not as much ... it's painful," says Todd Ramsay who imports specialty wines from California into Western Canada,
Since the loonie bottomed out at its lowest level in 13 years recently, he and other wine importers have taken a hit on their bottom line, even after raising their prices.
"We can't pass it all on to the consumer because we realize the price jump is just too big, so we've absorbed some of it, but unfortunately we've had to pass it on to the consumer as well," said Ramsay.
Although the dollar has stopped its steep slide in the last few days, Ramsay says prices could rise further if the loonie doesn't bounce back.
"It's hard for us to go back and say, 'Gee, our dollar is so soft, would you lower your prices so that we can maintain and hold the pricing?' It's just not an option."
Some larger U.S. wineries such as Chateau Ste. Michelle in Washington say they've absorbed losses so far in order to retain customers, but may have to re-evaluate their pricing in the fall if there's no uptick in the loonie.
"In the short term I think it's not unbearable. We can survive, but we would like to see some increase in the Canadian dollar," said Chateau Ste. Michelle's Al Portney.
Meanwhile Canadian winemakers have seen a hike in their costs for production because of the rising cost of equipment and supplies such as corks, bottles and barrels they import from the U.S. or Europe.
But some of that has been offset by increased interest in sales, they say.
"At the estate we've seen a real increase from tourists from the U.S.," said Tony Stewart, the CEO of Quails' Gate Estate Winery.
"We have presented our wines to an agent and their wholesales team in the US and they're very excited about them and they see a place for it in the marketplace just because of where our dollar is," said Donald Triggs, the co-owner of Culmina Family Estate Winery.
Meanwhile, for oenephiles looking to avoid paying a premium for a fine wine, Ramsay recommends asking local wine purveyors whether prices have risen yet and if they haven't, stock up.
Consumers can also stick to larger American wineries for now, or just get to know those wines made right here in Canada a little better.
With files from Lien Yeung