Bargain Wines

August 29, 2008



By Kelli Grant

Forget about having Champagne tastes on a beer-lover's budget.

Costs for almost every step or ingredient used in alcohol production are on the rise, from the price of malting barley for beer to the fuel costs associated with importing foreign wines, says Ilhan Geckil, a senior consultant with Anderson Economic Group, a Chicago-based research firm. And, thanks to consolidation, those rising costs are getting passed onto consumers more quickly. "If two companies represent 80% of the U.S. beer market, that makes it easier for them to put pressure on market prices," he explains.

In addition to high fuel costs, here are some of the factors that are pushing the price of your favorite nightcap higher:

Beer

Blame poor hops harvests in 2006 and 2007. "Prices on the spot market went crazy," says Jim Koch, founder of The Boston Beer Company (SAM: 44.66, -0.50, -1.10%), which brews Samuel Adams. Varieties of hops that went for $5 a pound last year go for up to $30 this year -- if they're available at all, he says. Meanwhile, malting barley has nearly doubled in price.

Wine

As a result of the weakened U.S. dollar, imported European wines are now 10% to 30% more expensive, says Michael Green, a wine and spirits consultant for Gourmet magazine. These increases are just hitting consumers now, as distributors start importing the just-released 2007 vintages.

Distilled Spirits

Higher grain and fuel costs are really starting to hit spirit makers, says Geckil. Diageo (DEO: 74.42, +0.64, +0.86%), whose brands include Captain Morgan rum, Johnnie Walker whisky and Smirnoff vodka, recently warned it would raise prices to offset a projected $440 million in additional energy and grain costs. Tequila makers are also feeling the pinch as demand for ethanol leads farmers to grow corn instead of slow-growing and less-profitable agave that they require.

To help keep your spirits high amid all this sour news, here are six ways to save on your favorite vintage, malt or brew:

Develop a taste for emerging wine markets

Some of the best value wines come from formerly untapped regions, says Natalie MacLean, editor of wine education site NatDecants.com. Try Argentina's Malbec, Chile's Cabernet Sauvignon, or South Africa's Shiraz and Sauvignon Blanc. Not only has the U.S. dollar held up favorably against these countries' currencies, but the relatively undiscovered wines are inexpensive to begin with. Within the U.S., consider Riesling from Washington and New York. "All are terrific, very affordable wines," she says.

Shop online

Many web-based liquor stores and wholesalers offer big enough deals to offset extra cost of shipping and save you money, says Green. At discount giant BevMo.com customers receive bonus discounts through the site's free loyalty club, plus a 5% coupon every time their spending totals $250. There, a 750 ml bottle of Grey Goose Vodka costs $27 (a 10% discount). Another site, AccidentalWine.com, sells wine in bottles with torn or stained labels at 20% to 40% off, simply because liquor stores and restaurants won't stock them.

Visit the warehouse club

Beer, wine and spirit prices at warehouse clubs can be up to 35% cheaper than at the supermarket or liquor store, says Teri Gault, founder of shopping site The Grocery Game. And believe it or not, some of the best deals are on high-end liquors and vintage wines, she says. At Costco (COST: 67.30, -0.51, -0.75%), for example, a bottle of 1999 Dom Perignon goes for $120 -- $39 less than the price at Wine.com. And thanks to esoteric state blue laws, you don't even need to shell out cash for a membership.

Pull out your ID

Getting carded isn't always a bad thing -- plenty of liquor stores offer age-, employer- or group-based discounts. ABC Discount Wine & Spirits in Wichita, Kan., for example, extends an extra 10% off to customers ages 55 and older.

Clip coupons

Be on the lookout for store sales and coupons, just as you would for any food item. Beer often shows up in store sale circulars, especially near the holidays, says Gault. A good source of additional coupons: online, where many manufacturers and liquor stores post printout deals on theirs or local-area web sites. Central Park Liquor in Spring Lake Park, Minn., has a 15% coupon on the Star Tribune's "Shop Minnesota" web site, good toward any one nonsale wine, beer or tobacco item.

Time your buys

Unlike beer or liquor, wine has a definite season: fall. That's when you'll find some of the best wine deals, says MacLean. "The new harvest is hitting the shelves, so they're looking to clear stock," she says. Also, buy Champagne in December, when the French houses lower their prices to compete for holiday buyers. (For more on the best times to buy everything, click here.)




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