The big news last week was the announcement that Chateau Ste. Michelle will be reducing its purchase of wine grapes from independent growers by 40% over the next five years. This will represent a 10,000 acre reduction which growers will have to find other customers for. This also amounts to a reduction of approximately $400,000,000 in retail sales if the grape surplus is not utilized. This is a significant impact on the market. There has been a lot of commentary on this by others, Sean Sullivan (, Paul Gregutt ( and Tom Wark (Fermentation - This email address is being protected from spambots. You need JavaScript enabled to view it.), so here, I'm giving my take on this topic. 

In my opinion, this is not good news, but not really bad either. The wine industry has had its ups and downs over the decades, ever since repeal. So the next challenge won't be anything new. There are times when cutbacks are a financial necessity. Sure, adjustments will have to be made. As for the owners of Chateau Ste. Michelle, Sycamore Partners, a private equity company in New York, I think more forward thinking is in order. Under the Allen Shoup and then Ted Bassler leaderships, Ste. Michelle expanded grape purchases and added new brands. Now there seem to be too many brands (are 14 Hands, Intrinsic, Borne of Fire and others really necessary?) Grape growers and wineries also need to get more creative about how to absorb the grape purchase cutbacks and grow the consumer market, especially with the trade barriers such as distribution, regulations, and shipping laws. If the industry as a whole works together, there will be a better future.