The Chalone Wine Group has seen its net income fall to US$1.4m compared to net income of US$2.3m in 2002, hit by continuing price pressure. However, total case sales for the year reached 675,329 versus 660,814 for the prior year.

Included in the 2002 case sales were the sale of the Carmenet brand name and inventory to Beringer Blass in September 2002 and the sale of excess Staton Hills inventory. Diluted earnings per share for 2003 were $.11.

"If you exclude the case sales of Carmenet and Staton Hills in 2002, our shipments in 2003 were 9% over the prior year," said president and CEO Tom Selfridge. "And, not only are case shipments to our distributors up, but our depletions, meaning the wine sold by our distributors to the marketplace, are up 10% over last year. This demonstrates that we continue to produce wines that have strong consumer demand, even in this extremely competitive market.
 
"Our bottom line is impacted by the price pressure that everyone in the industry feels right now," said Selfridge. "While we are seeing signs that the wine glut is drying up and the economy seems to be on the rebound, we don't anticipate these effects being felt until 2005 or 2006."

Looking ahead, Selfridge said: "In 2004 we will have the inaugural release of two wines: Orogeny Vineyards, a cool-climate Pinot Noir from the Green Valley subappellation of the Russian River Valley, and Hewitt Vineyard, a Cabernet Sauvignon from our single-estate vineyard on the Rutherford Bench. With these two new wines, plus the continued quality of our current wineries, we believe we can maintain our growth, even in this demanding environment."