This is the stuff of nightmares: “A significant part of France’s wine industry is teetering on bankruptcy [and] wine players around the globe, from Italy and Spain to New Zealand are struggling to meet adequate margins to finance the investments that are instrumental in preserving their future.”

America, including California, is doing a little bit better, according to the new report from Rabobank, a Dutch bank specializing in food and agribusiness. That’s due to “a growing domestic market” that’s “migrating towards higher priced wines.”

What? I don’t know when the research behind the Rabobank study was conducted, but if anyone thinks that American consumers are “migrating towards higher priced wines” they’re living in cloud cuckoo land. That might have been true last year, when Wine Institute released this rosy scenario. But it can’t be true anymore. A little common sense is called for. Unemployment is going up. Peoples’ 401-Ks are diving down. Shareholders are dumping their stocks. Cities and counties are broke. People are scared. How can Americans be “migrating towards higher priced wines”?

Answer: They can’t, and they’re not. Just yesterday, Eric Asimov blogged, in The Pour, about how “All over the United States, people are spending less for wine.” He quoted the respected wine industry analyst, Jon Fredrikson (Gomberg, Fredrikson & Associates): “People are clearly trading down.”

So let’s not hear about anyone migrating towards higher prices.

California faces an additional problem: Its share of the domestic market has fallen from 74% in 2006 to 61.3% in 2007, and while exports were up earlier this year, that situation has to have changed recently, for a simple reason: The recession is worldwide. The U.S. wine industry’s traditional export markets, including China and Britain, are hurting as much as we are. That means export is threatened, too.

But Americans are not about to stop drinking wine. What California brands will they buy? One clue to that is to see who’s hiring in the sales, marketing and finance areas at winejobs.com. The Wine Group. Don Sebastiani & Sons. Henry Wine Group. Bronco. Gallo. Brands, in other words, that hope to be competitive in 2009′s tough economy.

It may be instructive to compare this current economic collapse with the Great Depression and see what wine prices did. Of course, there was no American wine industry then, courtesy of Prohibition. But there was in France, and thanks to Eddie Penning-Rowsell‘s 1969 masterwork, The Wines of Bordeaux, we can see exactly how prices were affected. In 1926 the average price for Lafite was 40,000 francs per tonneau. It averaged 20,000 francs in 1928 and 1929, when the Depression struck. By 1934, it had sunk to 10,000 francs, a 50% drop in  just 5 years.

Even the mighty cults may find themselves in a precarious situation. Sooner or later, every bubble bursts. Bordeaux always came back. So will we.

The sale of Sebastiani, which I wrote about on the Wine Enthusiast website, was surprising to read about on Saturday morning, when I was going through my Google Alerts for “wine.” It’s always a shock to discover that a venerable old winery has been sold: William Hill, Mondavi, Louis Martini, Buena Vista, Chateau Montelena (on, then off) and so on. Whenever it happens, it shakes the wine world up a little, and makes the ground we’re standing on feel a little less secure.

That’s the first reaction. On sober reflection, though, such things usually make sense in hindsight, and somehow feel inevitable. Were we really so shocked that Mondavi was acquired by Constellation? We shouldn’t have been, given all the years of difficulties (both substantiated and gossiped about) the company went through. Louis Martini? They’d struggled for years.

So now we have Sebastiani, a winery and family with which I have a long association. I reported on the famous feud between Sam and his mom, Sylvia, who fired Sam. I was at Sam and his wife, Vicki’s, new Viansa Winery the day they formally opened it, in a driving rainstorm, and Sylvia showed up to bury the hatchet — a touching, sweet moment. With my encouragement, Wine Enthusiast awarded Don Sebastiani & Sons our American Winery of the Year award, in 2005; I’d been astonished at how  effectively Don built the new company from nothing.

Four years ago, Mary Ann Sebastiani Cuneo told me how hopeful the family was about the winery’s future. They’d redesigned the product line to include 4 tiers, and Marc Sebastiani, Mary Ann’s son, predicted the new generation would be fully involved.

And now this. From the vantage of an easy chair, this Monday morning quarterback can see that the sale had to happen, and this economically challenging business climate was the obvious time to do it. Bill Foley, the wunderkind billionaire who bought Sebastiani, is on a roll, and he must have determined that the price, which I have confirmed is about $47 million, was a good one.

The Sebastianis must have felt like the game wasn’t worth the candle anymore. I don’t know what they’ll go on to, but Sam and Don have proven that they have the entrepreneurial ability in their genes to start from scratch and make it happen, and Mary Ann and her family are smart and savvy.

If you have to be bought by someone, Foley’s probably your best guy. I’ve spent time with him, both in Santa Barbara and, this past summer, at the Whitefish Mountain ski resort he owns. He’d brought me up there to conduct a few seminars for his big Wine and Food Summit. Over the years I’ve formed the impression that Foley is a very passionate, determined guy who’s dedicated to making great wine. He’s not someone who buys a winery and then drives it into the ground. I once told him he reminds me of Jess Jackson in that respect. When he buys (or starts) a winery, his entire motive is to make it better. So I think that Sebastiani the brand is only going to go up in quality. Foley retained Sebastiani’s famed Cherryblock Vineyard, and I wouldn’t be surprised if the quality of their Secola Bordeaux blend and Cherryblock Cabernet Sauvignon soar.

There’s this blogger, Sean McBride, a Brooklyn lawyer, whose site is called Slaked! (I love it.) He recently posted a list of — well, in his own words, “the past year’s release schedule of a number of California Cult wines.” Sean warns that his list may not be complete and may even be inaccurate, but that’s beside the point. What struck me was how many wines he identifies as cults: about 100, by my count. (Some of the wineries are listed more than once, because they release different wines.) They’re mainly from California, with some Oregons and Washingtons; nothing from anyplace else, so far as I can discern. (You mean there’s no cult wine from Alaska? Paging Gov. Palin! How about a North Slope Todd’s Vineyard Moose Block Clone 4 You Betcha Cabernet Sauvignon for, oh, I don’t know, $150, proceeds to the Palin 2012 committee?)

I was surprised at the extent of Sean’s list, mainly because I’d never tried to make one of my own, but I can’t really argue with any of his inclusions. There really are a lot more than when the term “cult wine” came into popularity, in the 1990s, when there were maybe 10 or 12 in contention. Sean puts onto one page the West Coast’s equivalent of the Classified Growths of Bordeaux, of which there are about 61. So there are roughly the same number of West Coast cult wineries (as determined by Sean) as there are Classified Growths.

Any such list raises complicated questions.

- How does a winery get on the cult wine list?
- What keeps a winery off it?
- Can you buy your way onto it?
- How do you stay on it once you’re on?
- Is the list meaningful?
- Do millennials and younger wine lovers care?
- How will the list change in 5 years?

I invite your comments.

P.S. How many lists can dance on the head of a pin?

I swear, every blog in the world has been publishing top 10 lists as we careen into year’s end. I promise not to have any — this year. No guarantees for 2009. Meanwhile, this interesting list just came in from the respected winery P.R. professional, Kimberly Charles, on the top beverage trends. Check it out. We’re certainly seeing them in San Francisco. I might add a few more:

- unoaked white wines from lesser-known varieties like Albarino and Verdelho
- lower prices
- lower alcohol wines
- continued growth of Pinot Noir
- rejection of cutesy critters and colorful vehicles etc. on wine labels
- contined migration of wine P.R. to blogs and the Internet
- even cult wineries have their work cut out for them

Maybe it’s the freezing cold spell we’ve been having lately, but I’ve been thinking about the weather, and how it affects grapes in these modern times, when there are so many weapons in the winemaker’s tool box to un-do any damage it might cause.

It’s so different from the old days. Prognosticators used to opine on a vintage almost before the grapes had been picked, and buyers would genuflect and base their buying decisions on the edicts of a few. I was reminded of this when I picked up my old copy of Michael Broadbent’s The Great Vintage Wine Book, which is one of the best wine books ever. Michael colors entire Bordeaux vintages with a few flourishes of his pen:

1863: mediocre quality
1864: A truly grand année
1866 and 1867: unripe vines and feeble green wines
1870: the greatest, possibly, of all time

Blog disclosure: This is not my cellar!

Of course, Michael wasn’t alive then, but resorts to reports then current from vignerons and brokers, as well as his own extensive tasting of old wines. How easy it was then to paint Bordeaux vintages with a single brush. After all, it’s a smallish region — only about 40 miles separate St. Estephe and Bordeaux — and a relatively homogenous one, weather-wise. True, it might hail on one vineyard and spare another next door, but mostly the entire district has the same weather. Also, because Bordeaux is in a damp continental (as opposed to Mediterranean) climate, yearly weather patterns can differ dramatically.

California is so different. With our Mediterranean climate, the old saying that “Every year is a vintage year” is truer than not, although it was long the fashion among critics to claim otherwise. If you live in California, you know this to be true. Summers are dependably warm and dry. Autumn is typically gorgeous. Yes, it can rain in September, particularly in the north, but not heavily, and even if it does, the next week usually will be sunny and dry, allowing the water to evaporate off the grapes instead of spoiling them.

Winter can be nasty, with floods and freezes, but the vines are dormant and don’t much care. Spring is iffy, with late rains and frosts sometimes wreaking havoc in the vineyards (as they did in 2008). But for the most part, a bad Spring will result in a short crop, but not an inferior one. California’s weather is so dependable — even with climate change — you can set your watch by it.

And then there are all the tricks vintners use to counter the effects of weather, in both the vineyard and in the winery. The sciences of viticulture and enology have salvaged crops that would have been ruined once upon a time.

I write up Wine Enthusiast’s California vintage chart every year, and I’ll praise a year like 2005, which was so kind to Pinot Noir, or 2001, when North Coast Cabernet excelled. But the truth is, everybody tends to make more of vintages than they deserve in California. The downside of a harsh vintage rating — for example, the way some critics trashed 1998 — is that consumers, buying into the anachronistic Bordeaux model, tend to shun everything from that year, including some very good wines that didn’t suffer at all. The bottom line for consumers — and for budding bloggers — is that vintage variation should be taken with a grain of salt.

A bare majority of the voting members of the Russian River Valley Winegrowers (RRVW) trade association cast ballots last week to oppose Gallo’s proposed expansion of the Russian River Valley AVA, but the vote was far from unanimous, and fewer than one-third of the membership even bothered to vote. (I blogged on proposed expansion on Nov. 20).

A Dec. 10 letter reporting the results, sent by the RRVW to the Tax and Trade Bureau, reveals that, of the RRVW’s 380 members, only 114 actually voted. Of those who voted, 71 were against the expansion, 18 in favor, and 25 cast a “neutral/withhold” vote.

That’s not exactly a ringing condemnation of Gallo’s proposal, although it is technically true, as a RRVW press release stated, that “Members of the Russian River Valley Winegrowers voted Tuesday to join the Russian River Boundary Integrity Coalition in opposition to a proposed expansion of the famous AVA.” That press release also called into question Gallo’s contention that the proposed expansion area, which is within the Petaluma Gap, has a climate similar to that of the current Russian River Valley AVA. “[T]he area in question was part of the ‘Petaluma Chicken Belt’ because it was really too cold to grow the prunes and apples that were the foundation of the area now known as the Russian River AVA,” it says.

A spokesperson for the RRVW, Paige Poulos, said the organization has no problem with a Petaluma Gap appellation. There is a Petaluma Gap Winegrowers Alliance, but there’s no sign that anyone has begun the lengthy and expensive process of applying for a new AVA to the TTB. The leading AVA drafter in Northern California, Patrick Shabram, told me, “As far as I know, a petition has never been submitted to make it an AVA.”

Whatever the TTB ultimately decides concerning the Russian River Valley expansion, an appeal is likely, given the vehemence on both sides. An appeal has to go through complex TTB levels, each of which has long (45-90 days) time periods. Ultimately, a plea for appeal can be brought before the Federal courts, but only after the applicant has exhausted all TTB avenues.

CORRECTION: The spokesperson for the Russian River Valley Winegrowers is Chris Donatiello, not Paige Poulos. I regret any inconvenience caused.