Essential Whines

Marie Antionette was as much out of touch with the needs of her people as governments, coporations, employers and trade unions are today

The Wine Economist reported on 11/11/2009 that Australia’s overproduction of wine has reached a crisis point:

Australia has an accumulated surplus of 100 million cases of wine that will double in the next two years if current trends continue, according to the report. The annual surplus is huge – equal to all UK export sales and there is no clear prospect of finding additional demand, either domestic or foreign, to fill this gap. 

In fact, wine exports have fallen by 8 million cases or more than 20 percent in the last two years, according to the statement, with the largest declines in the high value wines that Aussie winemakers hoped would be their future. 

Inexpensive and bulk wine sales have grown, but at prices that are unsustainably low. 

Now, in August 2010, we read reports almost weekly of large scale grape production surplus’ and huge over-production of wine in almost every market and region. What is going wrong in the industry that this is happening? Is it truly an industry problem or, in fact, a societal problem? Is there really over-production of grapes and wine or is there under-consumption? In the past couple of weeks, there have been several articles published dealing with the downturn in the sale of wine, the trends to cheaper wines, and so on, all being blamed on the recession in the national economies and the global economy. Yet, there have also been other articles highlighting the significant increase in the demand for and sale of high-end wines. Are we truly dealing with the effects of a recessive economy or are we, in fact, witnessing the regeneration of the class structures of feudal times when there existed the Lords and Barons – the Have’s – and the peasants, workers – the Have Not’s. 

Is it possible that what some see as over-production is actually the result of a societal class structure change that has left the largest proportion of the population (the Have Not’s) without the necessary income to buy anything but cheap wine, if that? Is it also possible that the other small group (the Have’s) are indulging their fantasies on the very best wines with funds that they garner at the expense of those who do all the work? It is, in fact, reasonable to believe that it is a combination of both. However, this is the typical fence-sitter statement. 

I believe that the industry is feeling the effects of a societal class shift far more than it is suffering from over-production. There is no disputing that the middle-class American family has been rapidly disappearing in recent years with about 90% of them struggling to avoid being sucked down into the lower class and the other 10% being fortunate enough to hit a jackpot that catapulted them into the higher class. Of course, class here is differentiated by wealth and weekly income not by anything else. If we don’t think that this is going to have an effect on an industry, then we are just not thinking. 

As I see it, the answer to the wine glut is not in the hands of the producers unless they are prepared to pull up vines, produce less and so on so as to curtail their production to the changed market – this, of course, will in turn forces prices up which then further compounds the current issue. The answer is in society, governments and business all acknowledging that the greed of the minority is destroying the value of life for the majority; in acknowledging that multi-million dollar salaries to a few at the expense of the bulk is unjustified and needs to stop; in realizing the true value of every worker’s sweat and paying them accordingly so that they can once again live a good life; in realizing that offering a worker $10 per hour today when this is exactly what they offered back in 1986 is nothing short of proof of the inequality that now epitomizes our society. 

Let us not forget that it is a proven fact with centuries of evidence to support it that it is the spending of the majority that keeps the world economics moving along. The every day worker is and always has been more willing to spend their money than the rich and famous. If you doubt this, take a good look at how many of the Hollywood celebrities and corporate success stories give back in proportion to their annual income. Compare the economic impact of $5M spent on one personal yacht by one of the Have’s, versus $5M being collectively spent by50,000 Have-not’s because they each received a nominal hourly wage increase in appreciation of their efforts, the efforts that actually created the corporate profit that enabled everything to happen.

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