The threat of Pierce's disease and fears of a downturn in the U.S. economy are taking some of the bubble out of wine industry, even as it continues to enjoy some very good years. That's according to an annual survey of the industry conducted by Robert Smiley, dean of the Graduate School of Management at the University of California, Davis. He presented the survey results at the Wine Industry Financial Symposium in Napa today. Pierce's disease, a bacterial disease that kills grapevines, dominates the concerns of the 350 wineries, growers, distributors and wine sellers who responded to the survey. "Everyone growing grapes is concerned about what Pierce's disease will mean for them," Smiley says. UC Davis researchers are members of a University of California statewide task force addressing the problem of Pierce's disease and the glassy-winged sharpshooter, a new agricultural pest to California known to transmit Pierce's disease to grapevines. Almost 80 percent of wineries and 70 percent of vineyards report having had a profitable 1999, and 88 percent of wineries and 80 percent of vineyards expected even better profits this year. Wineries anticipate a good crop, Smiley says, with 80 percent expecting to raise prices. However, grape growers in the southern part of the Central Valley are contending with a surplus of grapes caused by overplanting in recent years. "For some vineyards, it's just barely profitable to take the grapes out of the field," says Smiley, adding vineyards that break even at $300 a ton are sometimes getting as little as $75 a ton. Overall, respondents attribute the health of the industry over the last four years to a strong economy, reports of the health benefits of drinking wine in moderation, improvements in wine quality and an expanding consumer base. Almost 70 percent of respondents believe the industry will continue to expand while only 13 percent believe the industry is in decline. Wine sellers and wineries are the most optimistic; lenders and growers are the least optimistic. "It has been, over the last seven or eight years, a very good run for the industry, just as it has been for the economy." Respondents believe the most serious growth constraint to the industry would be an economic downturn, followed by global competition, limited distribution channels, campaigns discouraging alcohol consumption and government regulation. "The wineries' major concern about the future is that the economy stay healthy," Smiley says. "They're concerned the economy may eventually go into a recession and that people will no longer be able or willing to buy wine at $15, $20, $25 a bottle." Among the other findings of the survey: * The shift from white wine to reds continues with Cabernet Sauvignon and Merlot the leaders among new plantings. * Imports from Australia, Chile and New Zealand are causing the most concern among wineries. * Wineries, distributors and retail sellers think more people would drink wine if it was more "user friendly." They suggest making containers easier to open, offering a smaller bottle more suitable for a couple to drink at one sitting and selling higher-quality wines in the three- to four-gallon boxes. The ninth annual symposium, organized by the Wine Industry Symposium Group, concludes this afternoon. Media contacts: -- Robert Smiley, Graduate School of Management, (530) 752-7366, rhsmiley@ucdavis.edu -- Julia Ann Easley, UC Davis News Service, (530) 752-8248, jaeasley@ucdavis.edu