Fresh hell for California's crippled wine industry as values hit rock bottom

Vineyard values across California wine regions are falling as grape demand weakens and buyers gain leverage. Vineyard owners are rushing to sell land, but the market has many sellers and very few buyers, creating fast-moving price declines. Mendocino County has seen sharp value drops outside high-end Anderson Valley pinot noir and chardonnay areas. Lake County has been hit after years of heavy cabernet sauvignon planting. Sonoma County is also experiencing reduced prices and uncertain grape demand. Even Napa Valley’s luxury market shows stress beyond top cabernet vineyards, with some producers struggling and others treading water. Lenders are increasing pressure on owners with debt, which can lead to asset sales at very low prices.

""It's like catching a falling knife," Sonoma-based agricultural land appraiser Tony Correia said of the collapsing vineyard market. "The market's moving faster than the appraiser does." Correia said vineyard owners across Sonoma, Napa Valley, Mendocino, and Lake counties are all feeling the squeeze as grape demand weakens and buyers gain leverage."

""If you're going to sell in today's market, you need to face the reality," he warned. "There's lots of sellers, and there's very few buyers." Vineyard values in Mendocino County have dropped sharply outside the high-end Anderson Valley pinot noir and chardonnay area. Lake County has also suffered after years of heavy cabernet sauvignon grape planting."

""All of Sonoma County, if you have to sell today, the prices are going to be less than they used to be, and the demand for grapes is still a crapshoot," Correia said. Even Napa Valley's usually stable luxury wine market is starting to show problems outside its top cabernet vineyards."

""At the bottom tier, perhaps a third of the category are struggling, maybe a third in the middle is just treading water," Correia said. He warned that more financially troubled sales are likely as lenders put more pressure on vineyard owners who owe money. "That typically translates to selling off an asset, and those assets will likely be sold at very low""

Read at California Post