Recession and a grape surplus should give consumers better California wines at lower prices in the coming year, predicts an expert on wine economics at the University of California, Davis.

"The industry is substantially less optimistic about its fortunes than it was a year ago," said Robert Smiley, dean of the UC Davis Graduate School of Management. "We appear to be going into a recession. And price run-ups for grapes in the 1990s led to a lot of plantings that are now coming into full production. With an abundant supply, grape prices have gone down, so wineries will be able to blend better grapes into their non-premium wines.

"Mid-priced and low-priced wines -- those $14 a bottle and under -- will get both cheaper and better."

Smiley will discuss these and other results of his annual survey of the California wine industry on Wednesday at the Wine Industry Financial Symposium in Napa.

This is the symposium survey's 10th year. The 2001 respondents were 300 California wineries, growers, distributors and wine sellers whose combined efforts sold 24 million cases of California wine in the past year. Smiley conducted the survey in midsummer.

In the United States, a few people drink most of the wine and half the people drink none at all. Smiley said the industry's chief marketing challenge is to get the consumers in the middle -- those who drink a little wine on special occasions -- to begin drinking wine with meals on a regular basis.

"The industry wants to help consumers overcome this mysterious aura that wine-drinking has -- to learn that wine is approachable, that it's OK to experiment, that wine can go with everyday meals," Smiley said.

Those efforts have been helped in recent years by medical studies showing that drinking wine in moderation, particularly red wine, can be protective against heart attacks. Buyers seem to be paying attention. Although chardonnay, a white varietal, is still by far the leading California wine, sales of red wines rose more in the past year than sales of white wines.

Winemakers surveyed said again this year that they are interested in package changes to make wine more accessible, such as closures easier to open than corks; smaller bottles for serving only two people; and improved bag-in-a-box containers. However, Smiley said, limited progress has been made.

In addition to conducting the annual survey, Smiley interviewed 15 industry leaders about their strategies for managing in a recession.

"They all were worried about their midsummer inventories," Smiley said. "They need to move out the product from past years that they have in bottles and barrels to make room for this year's production. Beyond that, they intend to be very careful about expenditures."

That includes postponing new vineyard development. Of 11 winemakers who had planned to expand vineyards in the state's Central Valley, nine said they would postpone that development. On the central coast, nine of 15 said the same. In contrast, only 13 of 57 winemakers planning expansions in the north coast-Napa-Sonoma regions said they would postpone.

The big winemakers offered some survival advice to smaller colleagues, many of whom are new in the business and have never been through a downturn in the wine-sales cycle. "Holding on to inventory, rather than cutting prices to move it out, is particularly risky," Smiley said. "And don't raise prices now, even if you feel very good about your wine quality. This is not the time to antagonize your customers."

Smiley will discuss the survey results in detail at the symposium, where his topic will be "The New Order and How to Survive."

The invitation-only symposium, to be held at the Napa Valley Marriott, began today at 1:30 p.m., with seminars on topics ranging from e-business to the status of the international grape harvest. The program will resume at 8:15 a.m. Wednesday with Smiley's presentation, followed by seven other sessions.

About 350 winery owners and executives, grape growers, financial-service providers and other industry professionals are expected to attend the event, which was organized by the Wine Industry Financial Symposium Group.

Details of the survey results can be seen online on Wednesday, Sept. 26, at http://www.gsm.ucdavis.edu/visitors_center/news/wifs/.