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A rosy outlook for state's wine industry

The Associated Press

EUGENE ' Industry leaders say the forecast for Oregon's wine industry is rosy.

The global grape glut is waning, the economy is improving, local vintages continue to win awards, and chain brands are stepping up.

This is actually one of the most robust times that I can remember in 20 years or so, said Harry Peterson-Nedry, owner of Chehalem Wines in Newberg and a member of the Oregon Wine Board.

Sales at the winery were up 20 percent last year and are up another 20 percent so far this year, Peterson-Nedry said.

Like most nonessential goods, wine sales dipped after the 2001 terrorist attacks rattled an already shaky economy. But consumers again are ordering wine by the glass in restaurants, browsing wine shops and visiting tasting rooms.

— People are beginning to let go of that money again, said Dan Fassett, national sales manager for Silvan Ridge and Hinman Vineyards of Eugene.

At a Eugene-area Market of Choice, where the selection exceeds 2,000 wines, beverage manager Dan Budd sees consumer confidence and curiosity returning as well.

From his vantage point, he sees many customers who flirted with the &

36;2.99 Charles Shaw phenomenon and other mass-produced wines and are ready to move on, Budd said.

They say, 'OK, I've been there, done that, I got more pleasure out of my son's grape juice this morning,' he said. They just start shying away from things like that.

That's a relief for winemakers who watched the slowdown hit at the very time grapes were plentiful and Northwest vintages were attracting rave reviews. The one-two punch of a poor economy and an abundance of new wines coming to market forced many to lower prices, scale back production or both.

Americans have had no shortage of wine to choose from in recent years. The nationwide glut stemmed from bountiful vintages, rapidly expanding vineyards and a wave of low-priced imports from Australia, Chile, Argentina and other zealous exporters.

Longtime winemakers see a landscape chock-full of vineyards and a flood of juice, as the industry calls it. In Oregon, a series of good vintages since 1998 inspired more and more people to enter the business.

Licensed winemakers in the state now number 314, a threefold increase in the past 10 years, industry figures show. Production has more than quadrupled in that time: Oregon vineyards yielded 2.79 million cases of wine in 2004, up from 601,000 cases in 1994.

The grapes were being planted faster than cars being made in Detroit, said Brad Biehl, manager of Eugene Wine Cellars and former general manager of King Estate winery near Lorane. It just exploded.

Still, no one knows what the long-term impact of the global growth in winemaking will be on Oregon's &

36;200 million a year industry.

The most planted grape in California last year was not chardonnay, merlot or cabernet sauvignon, but pinot gris, one of Oregon's signature grapes.

But vintners who focus on quality and strategic marketing will persevere, said Steve Thomson, director of national and international sales for King Estate, Lane County's largest winery.

We're not playing the price discount game like a lot of Californians are. We're trying to let our pinot gris rise to the top, and that's a good place to be, because if you do have to fall back a little bit, you're still going to be in pretty good shape, he said.