Wine shipments from California rose by 3% in 2002 to a record 463m gallons with the growth, primarily in value-priced brands, being spurred by the wine glut being seen in the region, according to a report published on Tuesday.

The report said that the over-supply of wine grapes allowed producers to raise quality of budget-priced wines and resulted in higher sales in lower priced segments. "Growing supplies of wine grapes enabled some California wineries to improve the quality of popularly priced wines, thus delivering excellent values to cost-conscious consumers," said Jon Fredrikson, the publisher of the Gomberg-Fredrikson Report. "It was these value brands that drove wine market volume gains."

The report suggested that the trend towards value-priced wines would continue. "We'll continue to see bargain prices, certainly through this year for some varietals, mainly Chardonnay, Cabernet and Merlot wines," Fredrikson said. "What we're finding is that consumers are dialing into the magic price-points where they buy like crazy, but it also brings in new people who move up to higher-priced brands."