Question: Rapel Valley in Chile is renowned for its ability to produce high quality wine at a fraction of the cost of many other vineyards around the world. Rapel Valley produces over 20 million bottles of wine annually, of which 5 million are exported to the US . Each bottle entering the US is subjected to a $0.50 per bottle excise tax, which generates about $2.5 million in tax revenues. Strong La Nina weather patterns have caused unusually cold temperatures, devastating many of the wine producers in that region of Chile . How will La Nina affect the price of Chilean wine? Assuming La Nina does not impact the California wine-producing region, how will La Nina impact the market for Californian wines?
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