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Firends of mine in the wine industry are suggesting that Over the last several years the demand for wine was far outpacing the supply. Wineries began making plans for growth, including Mondavi, in anticipation of being able to meet the increased demand. Now however the torrid growth that was projected is not being sustained. In a boom and bust cycle we may be seeing the beginnings of a downward turn. Some wineries will do fine, Mondavi may be one that succeeds in this new environment.

You have to remember that our sales were essentially flat last year, the increase in revenue was due primarily to higher prices. If we are really at the top of the cycle we may find that we are not able to sustain the higher prices without actually seeing a decline in sales.

Mondavi is one of the best positioned wineries to withstand a weaker than expected market - I'm just not expecting to see the same growth in the share price we have seen over the last couple of years. The price may not drop much lower but the question any new investor has to consider is would my money be better placed somewhere else. I expect our money to sit fairly idle for a while here.
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