The British tabloid The Sun reports on wine fraud at a British supermarket: a wine consumer in Britain says he bought an obviously fake bottle of Louis Jadot Pouilly-Fuissé on closeout at Tesco. The consumer says that the label was so bad that it “looked photocopied” and had a screwcap instead of the normal cork closure. Moreover, he told The Sun, that it didn’t pass his taste test at home: “Instead of a nice French Burgundy, this was a cheap German Hock or Liebfraumilch.” A Tesco spokesperson admitted to finding “a small number of counterfeit bottles” and said that they were investigating the matter. (Click for label photos.)
Most wine counterfeiting seems to happen with supremely expensive wines, where the profits can be great on a very few number of units sold. Also, fewer people are aware of what a ’21 Petrus label should look like let alone what it should taste like. But with a supermarket brands, it seems that fraud could be more easily spotted given the large number of bottles that would need to be sold (thus more eyeballs) and consumer expectations for consistency, either in the label art or the taste. Generally, people want a fake Rolex, not a fake Timex.
But passing off cheap red wine as pinot noir, that’s another story…
The euro hit $1.28 this morning, down from $1.51 in December. Does the lower euro mean that European wines are likely to get cheaper on store shelves soon?
While European travel will definitely be cheaper today than it was six months ago, wine importing doesn’t always work like that. (As a backgrounder, I examined wine and currency hedging when the dollar was headed the other way a few years ago.)
I tweeted about today’s currency situation and importer Jon-David Headrick replied in two tweets, at first joking, “This is our big chance to raise Cour-Cheverny prices by 30%!” (Cour-Cheverny is a tiny Loire appellation making wines from the obscure romorantin grape variety.) He elaborated: “Prices should fall unless importers have made the time-honored “when the euro falls you can raise prices” deals with producers…”
For a longer reaction, I put the question to Victor Owen Schwartz of VOS Selections who has been importing and distributing European wines–including Greek wines–for 23 years.
Yes it is low today but you know it doesn’t make sense to price one’s wines on the lowest spot rate of the day; what happens when it shoots up, do we just raise the prices? the market would love that! The level of volatility in the euro has been terrible, it’s a moving target. As you say, it has been over 1.50 in the not so distant past so if I am buying wines today and paying in 60 days or so, where will the euro be then? All that being said, with everything that is going on in Europe, starting with Greece, I believe that the basic metric of the euro assumption of importers will be decreasing. Now will that translate into lower prices on the shelf? My sense is that the wholesale trade will use the extra margin to make better buying opportunities for their retail and by-the-glass customers (volume deals) but not necessarily lower their prices. In these cases from what I have seen, some restaurants and retailers pass on the savings, some keep it. Don’t forget that #1, we are coming off of some rather lean years and #2, we are all selling less expensive wines so we need to make money somewhere.
As to the Greek situation, he said that “the impetus for exporting will only be that much more important.”
Hit the comments with your thoughts on the situation, especially if you are in the wine trade.
Tom Angove died at the age of 92 last week. Never heard of him? Well, in the 1960s he had the idea of putting wine in plastic bag, placing that in a cardboard box, and tapping it like a keg. His son, then 15 years old, told him he was nuts. Undeterred, Tom Angove commercialized the bag-in-box and forever changed how wine is consumed in Australia, Sweden and college dorm rooms. More recently box wine has crept upscale. Angove joins Robert Mondavi, Peter Mondavi, and Ernest Gallo as having lived well into his nineties. Maybe there’s something to resveratrol after all?
SIPPED: number crunching
Since we all have broken out our green visors and fired up TurboTax this time of year, we can now turn our attention to the economics of wine under $20 again. Jason Haas, general manager at Tablas Creek in Paso Robles, opens his books for us and walks us through his decision-making on whether a vineyard is worth developing to make a wine under $20. He considers the cost of land, labor, planting (dry farmed vs irrigated) to make his conclusion. If you like to wonk out about the business side, this post is a must! [Tablas Creek]
SPIT: Tart (and tact)
A surprising write up of the Mommessin Clos de Tart appeared recently: “The biggest disappointment was the 2006 Clos de Tart. Like so many red Burgundies from 2006 seem to be, it was underripe, excessively acidified, and almost textureless. It’s a sham, and it’s amazing how few people are willing to stand up and admit such stuff exists.” [Hedonist's Gazette]
SPIT: good times
Hard to tell which phrase would strike more fear in the heart of Napa: finances that are “very weak” or “on life support.” Even foreclosure has been the fate of 10 vineyards in the valley that once was called “Eden.” But probably the scariest phrase is this: “High-rollers are discovering that there are lots of drinkable $20 to $40 bottles of wine.” ["Vineyard Defaults Surge as Bargain Wines Hurt Napa"Bloomberg]
SIPPED: gilding the lily
Ah, spring is in the air. And with it come California winery newsletters offering their wines for $74 a case–just the shipping, that is.
SIPPED: Buffett’s billions
Warren Buffett is getting into the wine biz. Not as a producer, but as a distributor. Through his subsidiary McLane, Berkshire Hathaway is buying the Georgia wine and spirits distributor, Empire, reports Wine & Spirits Daily. I guess Buffett knows where the profits are in wine.
SIPPED: spurious variable?
Wine drinking women don’t get fat! But is it wine consumption that explains the slower weight loss among women in a study? Not necessarily. [Globe and Mail]
Tragedy struck Chile overnight on Friday in the form of a massive earthquake that has displaced two million people, severed north-south bridges in the narrow country, and killed hundreds of people (see coverage on nytimes.com).
Chile has a large, export-oriented wine industry. Some of infrastructure, particularly in the regions of Maule and Rapel (including Colchagua), has been damaged or destroyed. Contacted via email, Lori Tieszen, executive director of Wines of Chile USA, says that Jose Manuel Ortega reports “devastation” in Maule and that his winery sustained some damage; Julio Bouchon of J. Bouchon, “is safe but his beautiful old winery is leveled,” Tieszen writes. In 2006, the Oxford Companion to Wine described Maule as “slowly changing its reputation of growing only bulk wine.”
“One can smell wine along the roads in front of the wineries. Tanks laying, collapsed buildings, barrels and glass everywhere,” winemaker Sven Bruchfeld told James Molesworth, wine critic for Chilean wine at Wine Spectator magazine.
Molesworth has been tweeting what he hears from wineries (follow his feed for the latest). Another source told him, “Big damage to the industry. Millions of liters on the floor.” He also tweeted that Montes and Lapostolle were hit hard in Colchagua, an area that had seen lots of investment in the wine indsutry. Feel free to add news in the comments if you have updates.
Depending on the region and grape variety, the harvest has already started or was scheduled to start soon in the country.
A French court found 12 executives guilty of selling the equivalent of 18 million bottles of cheaper wine as pinot noir. The buyer was California’s E&J Gallo for their Red Bicyclette brand, which sells for about $9 a bottle.
AFP reports that generic red wines fetched 45 euros (about $62) per one hundred liters while the premium pinot noir fetched 97 euros. One of the firms involved had been paying 58 euros for the wines it sold to Gallo. The accused made seven million euros ($9.5 million) in the scheme.
The defendants, from two firms, received suspended jail sentences and fines between 3,000 and 45,000 euros. Reuters reports that one firm, Sieur D’Arques, had to pay a fine of 180,000 euros.
Gallo issued a statement saying that they were “deeply disappointed” to learn of the fraud at one of their suppliers. The statement continued: “We believe that the only French Pinot Noir that was potentially misrepresented to us would have been the 2006 vintage and prior.” They also added that there was no health risk and that they would be withdrawing the wine from the market.
On the Red Bicyclette website, they tout the pinot noir as “world acclaimed” and point out that the 2006 vintage received a score of 83 points from Wine Spectator and the 2005 received various medals at wine competitions, including a bronze San Francisco International Wine Competition and a silver at both the Taster’s Guild International Wine Competition and Finger Lakes International Wine Competition.
“If Americans lose confidence in French wine production, particularly the Languedoc region, which is already going through a serious crisis, the consequences could be terrible,” Francis Battut, the prosecutor, told AFP.
A lawyer for one defendant told AFP “Not a single American consumer complained.” Another defense lawyer said that the wine had delivered “Pinot Noir characteristics.” On Marketplace Morning Report this morning, a commentator said that consumers don’t even know what pinot noir tastes like.
But it hardly seems like consumers’ fault. Does $9 pinot really taste like pinot noir? It’s worth noting that federal regulations allow blending of up to 25 percent other varieties into a wine labeled by its grape variety.
What does this faux pinot ruling mean for you? What with counterfeits on the high end and Brunello blending, rule-breaking and fraud seem to be making the rounds in the wine world.
“We have to upgrade everything! Get me Facebook and Twitter!” So says renowned Napa winemaker, Mike Grigich, age 87, in a story in today’s NYT dining section. The story elaborates on the difficult times of selling expensive wines from Napa and how wineries are struggling to adopt new sales techniques, including social media.
It’s hard to know from that quote if a presence on Facebook and Twitter is a part or all of Grgich’s social media strategy. But, as we’ve discussed before, social media are no panacea for wineries, especially since they are too often a regurgitation of marketing pabulum. At best, social media are a part of (Napa) wineries’ new efforts to reach out to consumers directly and bypass the distributor tier, which can lead to increased profits for the winery. The NYT story cites a “meager” 10 percent of average winery sales in Napa are direct to consumer, via tasting rooms and mailing lists.
One thing that businesses can do well via social media, particularly since the demographic skews younger, is to alert consumers to deals. Unfortunately, deals are in scarce supply from wineries directly. The story cites the 2006 Stag’s Leap Wine Cellars merlot available at the tasting room for $45 when it is available at Target in the Bay Area for $31.99. Will Stag’s Leap be tweeting about this? Doubtful.
The article alludes to a “curious time warp” with winery tasting room practices and pricing. More evidence of the pricing time warp came last week when a Napa cab from Stephane Derenoncourt launched at $220. While the pricing showed a tin ear to the current economy, the press release contained something unusual that may have been a sign of the times: a plea to write about the new wine.
If Derenoncourt were releasing a $20 Napa cab, that would be worth tweeting.
“Try the Red: Napa Learns to Sell” by Katrina Heron.
New York legislators are considering a shift to allow wine to be sold in supermarkets–and wine stores to sell gourmet cheese, cigars, beer and even have ATMs. To find out how small shops can even exist in such an environment, we turn to three “mom & pop” shops in three of the 35 states that currently allow such competition. Click through for tales from The Bottle Shop in Wilmette, IL, Wine Authorities in Durham, NC, and Wine Expo in Santa Monica, CA. To their thoughts, after the jump! Read more…