Archive for the 'business of wine' Category

Is Pennsylvania finally taking aim at the PLCB?

PLCB wine store penn Blend $4 billion in deficits with a new Tea Party governor. Squeeze in a full Republican legislature. Shake and garnish with consumer bitters.

Will this stiff drink, now on the table in Harrisburg, lead to the end of the PLCB? The state-run system that bestows such snappy names on its wine stores as #5801 is in a rough patch. As seen in the picture at right (and the accompanying Times story details), the opening hours of this store are limited and the prices, selection and knowledge of the staff may not be all that great either at some state-owned stores. The new kiosks have bombed. Consumer dissatisfaction may be growing as is chatter about privatization. Even though previous governors have floated the idea only to meet with failure, the stars seem to be aligning for reform. While this is something most Pennsylvania wine consumer would likely raise a glass of hard-to-find wine to, the logic that will carry the day for public officials is about money. Read more…

Spitting, India, Wal-Mart, millennials, Champagne – sipped & spit

streams
SIPPED: spitting!
“The length and precision of the stream are just unbelievable.” No, this is not something from Urology. They actually have a wine spitting contest in France! [France24]

SIPPED: tariffs
Will India develop a thirst for wine? Maybe after it reduces its thirst for 150+% tariffs & taxes. [WSJ]

SPIT: human interaction
Remember those wine vending machines in PA? WalMart wants in. Redbox DVD? Check. Wine from kiosk? Check. Humans? Nil. [The Consumerist]

SPIT: 7-eleven wine
Millennial “would rather die” than drink wine sold at 7-Eleven. [Thomson Family Vineyards]

SIPPED: bankruptcy
A&P grocery stores, which purchased Best Cellars in 2007, filed for bankruptcy yesterday. Given that Royal Ahold (owner of Stop & Shop) is already circling, the new, merged company could be called Stop & P. [Bloomberg]

SIPPED: foreign ownership?
Speaking of distress sales, a French blogger wonders if a Chinese bidder may emerge for Heidsieck Champagnes. Sure, one may come forward, but it will have to do better than India’s United Breweries, which received a “frosty reception” bidding on Taittinger in 2006.

Supreme Court, FIJI, Lafite, boats and dragons — sipped & spit

water into wine SIPPED: miracles?
FIJI water LLC, which recently shut down production in a showdown with Fiji’s (military) government but then caved, will be turning their water profits into wine. In a merger of all caps, FIJI will be acquiring JUSTIN vineyard in Paso Robles. The FIJI CEO noted that JUSTIN has “fantastic products” and is “not a distressed asset.” According to Bloomberg, the Resnicks, the billionaire owners of FIJI, are the biggest growers of citrus, pomegranate, almonds and pistachios in the U.S.

SIPPED: another round
Will the Supreme Court extend to wine retailers their previous decision that liberalized winery shipping? We may find out since the Specialty Wine Retailers’ Association has appealed. [AFP]

SPIT: bubble pricing
An economist has some advice to wine collectors: Sell your Lafite. Now. [WSJ]

SIPPED: boats and dragons
And you thought our Cuvée 88888888 was brazen! File under: “How to succeed in China: get personal and put a boat or a dragon on your label.” [decanter.com]

SIPPED: end of an era?
“I think we’ve just come out of 15 years of wine criticism where there was really only one point of view.” SF mag tracks the evolution in California wine styles.

SPIT: inoculated discussion
If you’ve ever had a question about yeasts in wine, it’s likely been discussed on this epic thread on Wine Disorder.

James Bond, champagne houses for sale, spooky vines – sipped & spit

bond angelus wine

SIPPED: sizzle
Chateau Angelus will be James Bond’s choice of red wine, reports decanter.com. The movie had an “unbelievable” impact on sales of the St. Emilion wine, says owner Hubert de Bouard. No word of how much, if anything, the tie-up cost. Just think what it would have done if he picked a cabernet franc from the Loire!

SIPPED: more sizzle
After recent successes in Hong Kong, auction houses Sotheby’s and Christie’s graced New York with sales this past weekend. The Sotheby’s sale grossed $5,403,527, blowing away the estimate, and the Christie’s topline was $3,652,140, a high for them for this year. Absentee bidders from Asia featured prominently.

SIPPED: fizzle (not fizz)
While Napoleon Bonaparte could always find a reason to have Champagne, whether in victory or in defeat, Remy Cointreau has found a reason not to: lack of profits. The cognac and spirits maker has engaged a bank to find a buyer for its unprofitable Champagne businesses, which include Charles Heidsieck and Piper-Heidsieck. Interested in their margins? Poke around their helpful web site where they lay bare the financials of their divisions, including €96.7mln sales for Champagne with a €4.0mln loss. [Bloomberg]

SIPPED: spooky vines
NBC is developing a series (not yet even a pilot) revolving around a “troubled family desperate for a fresh start that takes over a Napa Valley winery whose ancient vines possess dangerous mystical powers.” Aha! All those ancient vines in Napa… [deadline.com]

Chateau Razorwire? Grape thefts in three countries

vineyard fence Vineyards have their pests: consider the baboons, rattlesnakes and bears we have discussed before as well as birds, deer and other vermin. But the latest threat is a human one: roving bandits.

Across three countries in recent weeks, grapes have been illicitly picked off the vines. In Washington State, 2,000 pounds of mourvedre grapes were stolen in what the vineyard manager described as “a professional job – a complete and clean illegal harvest.” In Germany, grapes destined for a small production wine called Sintfang-Cuvée were found missing a day before the scheduled harvest. And in the Languedoc, according to the Telegraph, one farmer had 35 tons picked clean, wiping out his annual crop.

Are these incidents related? It seems a far-fetched that there’s an international grape heist gang in operation. But that’s what an unnamed French detective told the Telegraph that “a wine mafia gang” targeting “some of the best grapes.” He elaborated: “We are undoubtedly dealing with the kind of upmarket criminals who steal old master paintings and antiques to order.”

Really? There was the attempted vine poisoning/extortion at Domaine de la Romanée Conti earlier this year and that surely qualifies as one of the best vineyards in the world. But 35 tons of grape with a value of $20,000 as was the case in Languedoc? A German wine that is not even commercially available but rather given to the town councillors? These hardly sound like “some of the best grapes” in the world. At any rate, it is sad to see the fruit illegally plucked from the vine.

Will this outburst lead to the rise of Chateau Razorwire, a fenced vineyard with a panopticon in the center? Of course, back in the day, some of the best vineyards in Burgundy were “clos,” or walled vineyards. Chateau Razorwire would have a tad less charm.

Counterfeiting wine: low-end edition

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…

Lower euro = lower wine bill? Guess again

eur usd 5yr

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.

Inventor of box wine, wineonomics, “sham” — sipped and spit

Screen shot 2010 04 06 at 10.26.14 AM 150x150 SIPPED: longevity
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]


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