The euro just hit its lowest rate to the dollar since 2006. But that doesn’t necessarily mean that the price of old world wines (re: European wines) will decrease with falling rates. Dr. Vino (Tyler Colman), the author of Wine Politics: How Governments, Environmentalists, Mobsters, and Critics Influence the Wines We Drink, explains why, despite the more equalized $1.19 = 1 €, customers won’t likely see much of a difference in their wine prices.
The first thing to consider is that American retailers are not ordering weekly from importers. They’re not even ordering from importers. (Unless a retailer also happens to be an importer.) They’re ordering from distributers, who have already purchased wine at a set price. And that will remain the price until the stock is cleared. In addition, though importers have the power of negotiation, the opportunity to do so may come along only once a year, and “Maybe that was last April when EURUSD was 1.39.” The list continues in this rather bleak vain: “Even if importers are re/negotiating now, they may not pass the cost savings on to US consumers.” Dr. Vino also reminds us that a fall in oil prices has not been reflected in airline fare.
What is certain, however, is that a trip to a European vineyard is less expensive than it was at this time last year. Why wait for the wine to get to you? Consider this an excuse to start planning a European wine tour. [Dr. Vino] [Flickr: /Monica Arellano-Ongpin]