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Central Valley Grape Growers Picket

August 21, 2002

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FRESNO, Calif. (AP) _ Grape growers from across California’s Central Valley picketed an E. & J. Gallo Winery on Wednesday to protest the low grape prices offered again this year by the world’s largest winemaker.

About 50 growers from Merced to Bakersfield blocked grape trucks loaded with wine grapes for about 30 minutes, carrying signs that read, ``Gallo wines made with growers’ blood.″

Growers say they can’t survive on the $65 per ton Gallo offered for this year’s Thompson grapes, the most common grape grown in the valley. Gallo and other wineries offered $75 per ton last year, and between $115 to $150 per ton in 2000, depending on the variety.

Growing the grapes costs about $90 to $180 a ton, growers said.

Growers say Gallo’s size _ $1.1 billion in sales last year _ makes it such a dominant force in the market that it effectively leads a price-fixing conspiracy. Other San Joaquin Valley wineries often wait to hear what the Modesto-based Gallo is offering for grapes before making their own deals with growers.

``The government should do something about it,″ grape grower Marvin Horn said. ``You can’t have all the other wineries follow suit behind it. It’s a disgrace for the free enterprise system.″

Even more frustrating for San Joaquin growers, who provide about 60 percent of California’s wine grapes, is that they have been offered just $100 per ton for chardonnay grapes, while growers in the more prestigious Napa Valley receive about $2,500 a ton.

Gallo said the company is actually a ``very minor factor in the pricing of Thompson seedless grapes,″ and all California grape growers are facing a severe surplus and reduced demand in the world wide market.

``We sympathize with the plight of all California grape growers, but the problem is really beyond our control,″ said Milo Shelly, a vice president.

Wine industry experts say one reason prices are low is oversupply. Growers will harvest 3.3 million tons this year, 8 percent more than 2001, according to the state Agricultural Statistics Service.

Wine industry analyst Eileen Frederickson said the valley also grows more grapes used in boxed wines rather than higher-end wines, such as merlot or chardonnay, which have better sales now.

``The problem in the valley is not Gallo. The problem is that there are too few wineries that make the kind of wine that for which the San Joaquin Valley traditionally has been known for,″ she said. ``There are many, many growers selling to few buyers _ it’s really as simple as that for valley growers unfortunately.″

While many growers in the Napa Valley have contracts with wineries, growers in the valley sometimes wait until July to find out wine grape prices. If they are low, they’ll let them turn into raisins. But raisin prices are also at an all-time low. Federal officials have recently approved a program that compensates raisin farmers who pull their vines out to help lower the oversupply of raisins.

Valley growers who don’t have contracts with wineries sell on the ``spot market,″ and those prices are down 50 percent this year. Several wineries with full inventories aren’t renewing grower contracts.

With 500,000 acres planted with wine grapes, California is the fourth largest wine producer after France, Italy and Spain, and it accounts for more than 7 percent of wine sales worldwide, according to the California Association of Winegrape Growers.

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Associated Press Writer Olga R. Rodriguez contributed this report.

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On the Net:

Gallo, http://www.gallo.com

California Association of Winegrape Growers, http://www.cawg.org/

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