According to one major survey, during the first quarter of 2007 the Southern Hemisphere exported more wine, in volume, to the U.S. than France, Spain and Italy combined, for the first time. This performance was led by particularly rapid growth in the U.S. market of imports from Argentina and New Zealand. Not surprisingly, price increases of wines from the Southern Hemisphere have generally remained modest in spite of our weak dollar, as these export-savvy countries continue to battle for a share of the expanding American wine market.

Expect to see even more emphasis on the U.S. market by Spain as producers there continue to feel the effects of falling domestic restaurant wine sales due to draconian DWI enforcement. This trend will inevitably create logjams and distribution problems here, resulting in close-outs and dumping of slow-moving items. That’s a short-term positive for consumers, but some American importers are already reporting that their producers have begun to express unrealistic growth goals for American sales.

While prices of European wines might be expected to moderate under current conditions, the already-freakish 2007 growing season may have other plans. For starters, absurdly warm weather during April led to the earliest flowering in memory in much of France and Northern Italy. Since then, however, ongoing humid, stormy periods have brought widespread and often damaging hailstorms. The Côte de Beaune experienced some spring hail, and Barolo was hit hard in late May. And a large storm system caused significant damage in Alsace and Côte-Rôtie in late June. There is already some evidence that producers are unwilling to let their 2006s go cheaply.

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