Tumult (anarchy?) is the current state of the main political parties in Britain after the Brexit referendum. Will the vote to exit the EU leave the British wine trade in any better shape than the political parties?
By way of background, the UK was, pre-Brexit vote, one of the bright stars in the wine world. While consumption has been slowing in the main producing countries of France, Italy and Spain for some time now, the UK was heading in the opposite direction: the wine market is vibrant, diverse, growing and by some measures, the second still wine market to the US. Somewhat astonishingly, a recent survey by the wine trade group WSTA showed wine as “the most popular alcoholic drink in the country.”
Post-referendum, the pound Sterling has fallen to 35 year lows against the dollar and tumbled nine percent against the euro (and even more as jitters about Brexit gripped the currency market earlier in the year). Historically, wine was one of the things par excellence that the British traded for: Adam Smith observed this in his example of “wine for wool” highlighting the comparative advantage of nations. (More recently, England has seen a domestic wine industry emerge but it is still not enough quantity at low enough prices to slake the thirst of British.) So the quick take is that Riojas, Burgundies, Baroli, and all other euro-denominated wines just got nine percent more expensive. (The currency-related price increases may take several months to filter through until existing inventories need to be refreshed at the new currency levels but preliminary reports indicate it is already being felt in France.) With 80% of wine in the UK sold at retail and much of that at thin margins, the consumer will feel the brunt of the currency impacts.
Over half of the price of the average bottle of wine in the UK is tax, so the government could conceivably cut the wine tax to offset the currency effect. But since HM Treasury is as desperate for revenue as most treasuries, that is highly unlikely especially since wine brings in £8.6 billion to the public purse.
There is, of course, the human element too and many non-British EU citizens live in Britain and work in the wine trade. London is a hotbed for restaurants and there are many non-British EU citizens who work as sommeliers. Their futures are all up in the air now.
The uncertainty following the referendum has sent the pound plummeting and many economic forecasters now see a recession looming for Britain. In the end, since the referendum was only advisory, and there’s been a wave of resignations among the political class, there’s a fair chance that no politician will actually trigger Article 50, which starts the clock and makes inevitable Britain’s departure from the EU. And if, in the delay, the economy suffers, British unity itself is under risk, new leadership emerges that can better articulate the cause for “remain,” there could be calls to rethink and “Bremain.”
With all the uncertainty, the Brits could certainly use a glass or two of wine. But whether they will continue to reach for it with such enthusiasm remains to be seen.
Late on Friday, Governor Andrew Cuomo vetoed a bill that would have made wine shipping easier for New York wine retailers. The bill protects wine retailers from being penalized by the NY State Liquor Authority for potentially violating the laws of other states. That’s right: other states.
In vetoing the bill, Cuomo said that he did not want to make New York a “haven for entities intent on breaking other states’ laws, avoiding other states’ legitimately imposed taxes and regulations and selling to minors with impunity.” (see full text of the statement)
Why would the Governor veto a bill that both houses passed by 90% last summer? Your guess is as good as mine. But that language about selling to minors is usually the hallmark of wholesalers’ argument against liberalizing wine shipping–technology exists to collect taxes and provide age verification. Now it remains to be seen if the legislature will override the veto with a two-thirds majority.
The Governor also called on the SLA to hold “a series of roundtables” on how to modernize the industry starting next March. We shall see if these roundtables include any consumer representatives but since a recent SLA ad hoc committee did not, I will not hold my breath.
The bill stems from a long-running case of Empire Wine, a retailer in the Albany area that is active in internet sales. The SLA had sanctioned Empire for violating other states’ laws and the legislature saw that as overreach, thus passing the bill.
New York City is arguably the best place on the planet to be a wine consumer. A crucial contributing factor to this status is the abundance of wines available. While breadth of that bounty, from Assyrtiko to Xinomavro, and talented people making wise selections can be found in many places throughout the US, what really places New York at the apogee of the wine world is the depth of older vintage and rare wines available. These quicken the vinous pulse of the city and if you have not tried some, consider a splurge (while back-vintage Burgundies are pricey, it doesn’t always cost an arm and a leg to uncork a time capsule from the Loire, Germany or Northern Italy). Whether these flow through shops as well as onto restaurant wine lists their source remains the same: private collections.
A new proposal threatens to restrict that flow. A proposal currently before the regulatory body for wine in New York aims to effectively shut down this trove of exciting wines. Private collectors would be barred from selling wines from five (for whites or rosés) to ten years (reds) from the vintage they were made. Moreover, they could not sell any wine within two years of purchasing it. Oh, and if you don’t have the original purchase receipt then you can’t resell it.
Recent changes in the way super high-end wines are allocated by NY wine distributors mean that shops and restaurants receive and ever-smaller amount of top wines. Thus buying some younger wines as well as older can help round out a wine list or a shop’s offerings, making them the objects of a wine geek’s eye.
Levi Dalton has a good piece on Eater about the effect of this on restaurants. Check it out.
Most other states prevent shops and restaurants from buying directly from consumers. So New York will still have wine even if this goes through. But it is a big step in the wrong direction; no wine consumer anywhere in America wants to see fewer choices in the marketplace.
What’s particularly galling to consumers in New York is that there is no consumer representative on the working group that put together the proposal. (Full list follows below–note there are no retailers present either). And the new Chairman of the State Liquor Authority, Vincent Bradley, applauded Governor Cuomo for his selections. So make your voice heard by writing the SLA about private collections at: Secretarys.Office@sla.ny.gov January 14 is the next date for discussion.
The Albany Times Union has a detailed account of the wrangling that has led to the suspension (indeed, on the NYT wine club site, New York is not even an option for sign-ups–the wine club continues in other states). The NYT wine club is run by a group called Global Wine Company and does not, as the Club’s web site states, make selections with the NYT wine critic or members of the newsroom. The Club offers six-bottle shipments for $90 or $180 on various monthly schedules. Global Wine Co also fulfills the club shipments for the Williams-Sonoma, the Washington Post and Food & Wine.
The Times Wine Club told its New York subscribers last week that it would have to suspend shipments until July because of uncertainty over New York’s rules and regs about shipping. However, the State Liquor Authority spokesperson told the Times Union that the Club’s local retailer had stopped doing business with them since Global Wine Co, based in California, had received cease-and-desist letters.
I’m not a huge fan of wine clubs in general–I’d opt for spending a monthly budget at a local store where the wine discussion is free and you have more choices to get exactly what you want. But there’s no reason that New York consumers should not be allowed to subscribe.
While this particular incident revolves around the Gray Lady, what consumers and businesses need is to get out of a gray area: hopefully the new head of the NY SLA will clear the air and issue understandable guidelines for businesses to ship into and out of the state.
Sanctions and the declining price of oil have slowed Russia’s economy, which is forecast to fall into recession next year. (A real bear market–rimshot.) And, in a nasty triple whammy, the ruble has declined precipitously as well, which is forcing up the price of imports. Consider the case of Apple, which just boosted the price of iPhones for sale in Russia by 25%. (But, apparently, even some, erm, domestic industries have also been compelled raise prices).
So what about wine? President Vladimir Putin has banned some food imports in retaliation for Western sanctions imposed over the Ukraine crisis. Notably, foreign wine and spirits weren’t on the banned list as they are (were?) popular with middle class Russians despite high taxes and markups. But Putin has wielded wine tariffs as a cudgel before against Moldova and Georgia so it may just be a matter of time until wine tariffs arrive too. In any event, the slowdown and inflation have put many imported wines out of reach.
In 2012, according to OIV, the International Wine office, Russia was the ninth largest importer in the world by value bringing in 911 million euros of wine. And they were growing at 11% reaching 7.9 liters per person (compare that with 9.1 liters per person in the US, using the OIV data for 2011). But with the current malaise, those numbers are likely to fall off a cliff. Which is too bad because in the Jeffersonian ideal, wine is a drink of moderation and the antidote to spirits and, perhaps in this case, an attractive alternative to bare-chested vodka drinking.
Which countries have the most at stake in the Russian wine market? Thanks to this handy graphic from the folks at RBTH.com, we know that French wines dominated Russian wine imports in 2012 with 20% market share but Italian wines are catching up as moscato has gained in popularity. Spain is third. The US had a 1.37% market share.
Here’s today’s bit of wine law crazee: back in June, the Sacramento Visitor and Convention Center tweeted a link to a local supermarket’s annual consumer tasting, which has over 300 local wineries (and many breweries) pouring their wares. One participating winery’s account on Twitter retweeted that tweet. And now, they are getting rapped on the knuckles by the Cal ABC, the state’s liquor regulatory authority.
A chill has since frozen the fingers tapping out winery tweets across the Golden State. If a winery’s license could be jeopardized by a generic retweet to a huge tasting, wineries may fear what right to freedom of speech they have. Read more…
This week, Olivier Cousin went before a judge. The heinous crime of the pony-tailed vigneron? Truth in labeling.
Here’s the story (which we’ve mentioned before but it’s worth a recap): Cousin farms 12 acres organically–neigh, biodynamically for Cousin who tills his vineyards with horse-drawn plows. In those vineyards in the town of Anjou, he has a lot of cabernet franc, known locally as Breton. So he labeled his 100% cabernet franc wine grown in Anjou as “Anjou Pur Breton.” So far so good, right?
The only catch is that the appellation retains the right to the term Anjou on wine labels and wines bearing the term must meet their criteria, including a blind tasting by committee. And Cousin quit the AOC in 2005 telling journo-blogger Jim Budd, “I stopped because the AOC is for industrial wines as the rules permit everything: weedkillers, huge yields, additives etc.” So the appellation authorities have dropped the legal hammer (gavel?) on Cousin and brought him to court. Read more…
Domaine de l’Ecu, a conscientious estate in Muscadet that makes some of the region’s best wines, has had one of their wines rejected by an approval committee.
To have the right to bear the appellation, a French wine must meet all the rules, which pertain to things like which vines can be planted in a delimited zone, maximum yields and so on. The final aspect of approval is a blind tasting by a committee, allegedly to assure “typicité” or that the wine tastes typical of the region. Usually this is a rubber stamp. But tasting committees, particularly in the Loire Valley where Muscadet lies on the western edge, have been showing a tendency to reject some wines. Paradoxically, those are often singular wines that strive for excellence. In so doing, the AOC system becomes more of an obstruction to quality than an institution to undergird it as it reinforces middling or bland wines.
The estate was founded by Guy Bossard. But it was Frédéric Niger Van Herck, a partner and the winemaker at Domaine de l’Ecu, posted the news that their “Expression de Granite” 2012, one of three bottlings that express the different soil types, has been denied the approval of the tasting committee. Here what he said on FB:
News of the day: Granite 2012 has just been rejected by the AOC tasting committee–and unanimously, no less… Promised for next year, full-on chemistry, mechanical harvesting, commercial yeasts, full use of enzymes, and sulphur galore… It should pass that way. 🙂
The worst thing is that everything is sold out and have nothing left… When will these official tastings end that turn the beautiful into standardized products? [my translation]
Long live the French wine!
He elaborated that the panel of five tasters judged his wine to be oxidized, adding “what a bunch of…”
Clearly the AOC has a problem: by rejecting wines from quality producers, they risk becoming a laughingstock by enshrining mediocrity. Read more…