Your Favorite Wine – Where Does It Really Come From?


Most people buy their wines from liquor/wine stores. Some favor a certain varietal while others prefer a certain country or region. Others follow the advice of their favorite wine salesman. And when buying wine as a house present, a price floor of $15 is employed.

Somewhat more informed wine buyers know that extensive literature has shown no connection between what wines people like and prices[1]. These buyers are more likely to buy their wines at lower prices in supermarkets. And going one step further, those aware of the tasting results of the Lenox Wine Club are likely to buy 3-liter box wines at approximately $4 per 750 ML bottle equivalent.

So people might think they know what they are drinking, but do they? Bota and the other boxes along with of Barefoot wines and John Casella of Yellowtail make no claim to owning vineyards. Instead, they buy “bulk” wine. Fred Franzia of “Two-Buck Chuck” fame is different. He is a grape farmer as well as a vintner. I quote from a recent piece: “People don’t understand that we’re both buyers and sellers…. We buy grapes, and we buy wine. But we also sell grapes, and sell wines.” With all his grape growing, Franzia says his wines use only 55-60% of his own grapes. He adds that his wines will never be 100% from his own grapes.

These vintners do not tout their vineyards. They sell because buyers trust them for offering a quality product at a reasonable price. But there are others: brands associated with to vineyards that are buying and using lots of bulk wine. In what follows, I look at the details of the trading in “grape juice” and “shiners.”

The International Trade in Bulk Wine

Consider first the production and consumption of all wines by the leading countries. As Table 1 indicates, five countries led by the UK and Germany, produce less wine than they consume. Seven countries run trade surpluses with Spain, Italy and France running the largest.

Table 1. – Wine Consumption, Production, Trade

Source: Trade Data and Analysis (TDA)

Data on international trading in bulk wines are pretty good. The UN Comtrade data distinguishes between wine shipped in containers greater or less than two liters. In what follows, I take the “less than” as bottled wine and “greater than” as bulk.

Table 2 provides data on wine exports ranked by the amount of bulk exported. Spain is by far the leader in bulk exports and the share of its exports that are bulk. It also gets the least for its bulk (only 52 cents per liter). After Spain, Italy, Australia and Chile export significant amounts of bulk. Spain and South Africa are the only countries exporting a greater share of their exports as bulk than bottled. France is at the other extreme, exporting only 19% of its wine as bulk. The US exports a small share of its production. But as the fourth largest wine producer, it exports a significant amount of bulk with a relatively high selling price ($1.41), second only to France ($1.62) for the highest bulk export price. Predictably, France also gets the highest average price ($6.15) for its bottled exports.

Table 2. – Wine Exports, Bottled and Bulk, 2014

Source: Trade Data And Analysis (TDA) and UN Comtrade

Perhaps more interesting here are the leading bulk wine importers: who are they and how is it used? Table 3 provides the country data, ranked by bulk imports. It is not surprising that Germany and the UK, as the largest wine deficit countries, import large amounts of bulk. But perhaps more interesting are France’s bulk imports. It does not pay much for them – probably because most come from Spain. Might this bulk be used to “leaven” some of the wine from France’s famous vineyards?

Most of the US imports are bottled. But it still imports a lot of bulk. Much of this will be used by some of its more popular brands (Barefoot) or its boxes. Italy is just the opposite: most of its imports are bulk. Not surprisingly, as large wine surplus countries, Spain, Australia South Africa, Argentina and Chile import very little wine.

Table 3. – Wine Imports, Bottle and Bulk

Source: Trade Data And Analysis (TDA) and UN Comtrade

US Domestic Trade in Bulk and “Shiners”

There is no reliable data on intra-country trading of “grape juice”. But partial data for the US is interesting. A number of wine-broker sites make it clear that this is a big business. There are three vehicles traded: grapes, bulk, and “shiners.” Shiners are bottles of wine without labels. Shiners are often produced because a winery wants to sell the wine to an undetermined winery or private label customer.


Table 4 is a listing of grapes for sale. This is a large and active market. All of these listing were newly listed on June 11th.

Table 4. – Grapes for Sale Converted to Wine Equivalents

(1 ton grapes to 150 gal. to 3.785 liters)


Bulk Wine

Table 5 lists bulk wine for sale from another broker. On July 12, 2016, WineBusiness had 401 bulk wine listings

Table 5. – Bulk Wine for Sale

Source: VendoWine

Table 6 shows the detail made available on three bulk wine listings.

Table 6. – Details on Bulk Wine for Sale

Source: Wine Business


Table 7 provides a listing of Shiners for sale.

Table 7. – Shiners for Sale

Source: VendoWine


Where does the wine in your favorite bottle actually come from? From the information presented above, it should be abundantly clear that you cannot be sure that the wine is from the beautiful vineyards pictured on the front label. Maybe the wine was made with purchased grapes, bulk wines, or shiners.

Information provided on the back label is more reliable. The Alcohol and Tobacco Tax and Trade Bureau (TTB) require that imported wines must provide the country of origin. The name (or brand name) and address of the bottler/importer/importer must appear as well.

So where does all this leave us? Find a box or bottle costing less that $10 per 750ML equivalent that you like, and stick with it until either you are bored or the taste appears to have changed. Then find another…. Keep exploring!

[1] Robin Goldstein, Johan Almenberg, Anna Dreber, John W. Emerson, Alexis Herschkowitsch, and Jacob Katz, “Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings”, Journal of Wine Economics, v. 3, no. 1 and Sébastien Lecocq and Michael Visser, “What Determines Wine Prices: Objective vs. Sensory Characteristics”, Journal of Wine Economics, vol. 1, no. 1.

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