The recession slams into the wine business

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In the first major layoffs by a big wine player, Jackson Family Wines (parent company of Kendall Jackson) cut 170 full time employees from their staff roles, most of them last Friday. Winemakers, marketers and administrative staff were among those who lost their jobs. In mid-2008, the company employed around 810 employees. Read more here.

But now there’s talk that the layoffs violate state and federal notice requirements. Read more here.

Many other wineries have been affected by the economic downturn, like Windsor Vineyards - a high-end, custom-label winery - that cut 16 people at the beginning of January. Blame falls squarely on consumers’ reluctance to spend cash on high-end wines, a segment that formerly saw double-digit growth.

But the pendulum swings the other way these days. High volume wine companies like E&J Gallo and Constellation had one of their best years in 2008 as drinkers grabbed cheaper wines in grocery stores. According to analyst Jon Fredrikson at the Unified Wine & Grape Symposium, 10 of Gallo’s brands made the “25 best selling list of wines in the nation last year.”

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