Advice to Owner of a mid-size, well regarded vineyard in the NAPA Valley producing wines in the

premium and super premium category

LT#3 Recommendation: Napa Valley should stay investing in premium and super-premium markets.
The reasons being:
1: Labour Cost Increased (as Illegal immigration stopped) so to reduce the cost of wine would be a
challenge for it.
2: There was oversupply due to which local market bifurcated and wine was being sold at a price of
$1.9 only.
3: There were cheap Australian manufacturers in the market. (Yellow Tail Sold 10 Million previous
year). Because they had low land cost it was also difficult to compete with them in this segment.
4: Average Acre of land was expensive in Napa Valley. 10 times more than avg. price Australian wine
and 20 times more than Chilean Vineyard. So, to compete with them in the low-cost wine would be a
challenge for it.