Discounted wine tipples best-sellers in U.S.

PARIS — Is the world drowning its sorrows in cheap wine?

An industry group said Thursday that more wine could be consumed globally this year, thanks to crisis-fueled demand for cheaper or discounted tipples, particularly in the United States.

While that might benefit some low-end producers, the organization's director cautioned wine growers to resist what he called the "massive pressure on prices," which erodes profits.

"If you cut too much, it's difficult to go back to your original price," said Federico Castellucci.

After years of steady growth, global wine consumption started to retreat last year, along with the rest of the world economy.

The International Organization of Vine and Wine said that erosion may have halted as wine growers battled to maintain sales volumes by cutting prices and as more wine is sold in bulk.

It predicts world wine consumption should rise by 4 percent to 6.5 billion gallons in 2009.

"People who want to keep drinking are buying cheaper wines," said Castellucci.

He said that the United States — second only to France in terms of total wine consumption — has "continued to import but with a strong attention to prices."

Improved winemaking technologies mean that cheaper wine is much more palatable than 20 years ago, said Castellucci, whose family has made wine in Italy's Marches region for three generations.

"We should make sure people have wine at a reasonable price so they can drink everyday," he said.

In the United States, large-scale vintners such as Fred Franzia, co-founder of the Bronco company in California, are producing brands such as Charles Shaw, known as Two Buck Chuck, for $1.99 a bottle in some states. It hopes to sell as much wine as possible and believes no bottle should cost more than $10.

Last year, the U.S. surpassed Italy in terms of total wine consumption for the first time.

The latest figures on wine production around the world also reveal a few key shifts.

Global wine production is expected to remain flat this year at about 7 billion gallons, although the estimate was made before northern hemisphere crops were completely harvested.

Overall, European Union wine volumes are forecast to grow by 1 percent this year and France is seen overtaking Italy as the world's biggest producer in volume terms.

Wine production in the so-called "New World" — Argentina, Chile, South Africa, Australia, New Zealand and the United States — is seen falling by 1 percent. U.S. volumes are expected to grow by 6 percent.