Castanet

https://www.castanet.net/news/Penticton ... the-market

Three and a half acres of grapes and some stainless steel tanks for 1.85 million? What most of the pubic isn't aware of is that there is pretty much two years of Okanagan Wine production in storage up and down the valley because they can't sell it anywhere.
The banks own most of the wineries here now with inventory as collateral. The party is over.

hmmmm, maybe some cheap, er - more affordable South Okanagan real estate coming available soon

Can anyone confirm , or refute twobits' assessment of the industry. I don't really know anything about it , but I just assume that the info is far from accurate , considering the source.

In 2008 - everything changed, and it never did get back to becoming "a print to print your own money."

but how bad - or good - is the wine industry right now?

If the wine industry here in 2007 was 10/10
and Twobits is trying to say it's 2/10
it probably is at about 6/10.

Chinese rich guy Yang Wong purchased Lang Winery in 2010 for $2.2 million. ( I think?)
He is probably thinking of making a few bucks right now, but having something good in the long term.


http://johnschreiner.blogspot.ca/2016/0 ... -game.html

gordon_as wrote:Can anyone confirm , or refute twobits' assessment of the industry. I don't really know anything about it , but I just assume that the info is far from accurate , considering the source.

Nuff said.

I think the smaller less established family wineries are in way over their collective heads. The majority of them started as very successful family vineyards that produced great crops of grapes year after year. They would see their grapes used to make award-winning wine and decided why be happy with 3-5K per tonne of produce when you can make your own wine.
This is why we are now seeing so many little wineries opening every single month. The hard part is now the vineyard turned to winery is now not making any revenue as they have to age the wine. 1-2 years. I think we will be seeing a few more smaller family wineries going up for sale in the near future.

gordon_as wrote:Can anyone confirm , or refute twobits' assessment of the industry. I don't really know anything about it , but I just assume that the info is far from accurate , considering the source.

Considering the source, I'd assume it's accurate.

gordon_as wrote:Can anyone confirm , or refute twobits' assessment of the industry. I don't really know anything about it , but I just assume that the info is far from accurate , considering the source.

I worked at a medium - large size winery along Boucherie Road that was not Mission Hill. It is a well established winery that is well known.

I can tell you they most definitely did not have two years of inventory. In fact, with most varietals, the issue was managing the sales channels to: A. ensure the most profitable channels got priority, and B. to ensure supply did not run out before the next vintage was ready. This winery is also developing 200 acre site in East Kelowna and will probably eventually produce their aromatic whites at this location meaning a second production facility.

The only exception to this was the one ice wine product available. That was typically only done every third harvest as enough could be made to last for three years in one harvest.

The US wineries, in my opinion, are very much in that bubble and some wineries are dumping their juice for next to nothing.

I heard grape growers get about $1.40 /lb.

Ten years ago they got $2.00/lb.

How about some of you non believers can get someone to let you go look inside the the old fruit storage buildings on Dawson Ave in Penticton next to the Growers Coop operation. About two acres of climate controlled building that used to store apples. Thirty foot ceilings with nothing but pallets of cases of wine filling the entire buildings to the ceiling. It's all a big secret.
Consider the source? See if someone will let you in to see for yourself? And this is not the only storage facility in the valley.
When you do that....then come back and call me uninformed. I would estimate there is more wine in this one building in storage that exceeds the total of all BC wine sales in two years. And this is bottled and cased wine ready for sale.....not aging for a higher price. There are no buyers for it for the price.
Much of it is pretty good wine too. Problem is people aren't willing to pay the price for this wine when you can buy the same wine from Chile or Australia that is 30 to 50% cheaper. These small Okanagan producers cannot compete at a price point that is competitive for the very good wines many of them make.
That is why all of this wine is in storage and there is an obvious consolidation of the producers by the big guys that can leverage economies of scale in both production, branding and marketing. The big guys are buying up distressed operations. It is just not news the locals want to hear.
Especially the locals that buy three acres of land, plant two and a half acres of grapes, build a winery, and think it's worth 1.8 million dollars. That shell game is dead and not even the most brain dead Asian investor with boat loads of cash to spend is going to bail out this stupid investment.

the land and building alone in naramata is probably worth that

LTD wrote:the land and building alone in naramata is probably worth that

So the Chinese rich guy got ten acres plus Lang Winery, which had a reputation for
being one of the best wineries in Naramata for $2 million, and this guy wants almost
the same price - 1.85 million - for three acres, with a nothing winery that has zero reputation.

?

Don't think so.

That winery for sale is actually in Penticton, just down the street from Hillside Winery and a nine iron shot away up the road from another winery that shuttered its doors earlier last year. Three wineries along Naramata road within 200 meters of each other.
Regarding the storage facility on Dawson, the Tree Fruit land in Naramata sold this past fall to a group that will be using the controlled atmosphere building for....wine storage.

it seems to me that many rich people got in the winery business I think to get deductions thru agriculture and to get lots large enough for big homes. I have been told that many sub all the work out to larger wineries.

The Green Barbarian wrote:

gordon_as wrote:Can anyone confirm , or refute twobits' assessment of the industry. I don't really know anything about it , but I just assume that the info is far from accurate , considering the source.

Considering the source, I'd assume it's accurate.

This pretty much confirms that it is not. Thanks for clearing things up.