Vol. 1 No. 7 …a visit to La Rioja

Of the six major wine regions in Spain, La Rioja (from the river Rio Oja, a tributary of the Ebro river that flows through the region), is by far the most important, although many others are developing. As mentioned in the prior blog, there has been improvement in Basque wines, and quality is up throughout the region.

Spain owes its fame and pain in the wine industry to phylloxera, the parasite that destroyed the vines in Bordeaux, causing the winemakers to try to find similar places to grow their wines. These included both the west and east of Spain, and even Portugal, but the most successful was La Rioja. But when grafting the shoots to American rootstock created phylloxera-resistant vines, the French returned to Bordeaux and eventually the bug moved into Spain forcing the growers here to do the same. It was both costly and time-consuming and many growers abandoned business.

The next ‘shockwave’ came when Generalissimo Franco (don’t say that name in Basque Country), ordered the vines to be replaced – with wheat – due to a famine. Somehow, some way, the wines were eventually brought back and while lacking the elegance of French wines they were soon sought out. Just as in other parts of the world, modern techniques improved the quality of the wine and today, the best riojas command high prices.

Rioja’s might never have become popular had it not been for modern tastes that caused a transformation not only in Spain, but Chile, Argentina, and even Portugal. These wines remain less expensive (except the very top lines which can cost as much as $100), and are exceptional value.

As my readers know, TB is, and has for long, been opposed to ‘wine snobbery’. Why should we ‘accept as gospel’ what Robert Parker, or Michel Rolland, or any other wine critic says is best? I asked this question at several of the wineries and was greeted with nods and smiles. At Muga, of all places, Carmen, my host, complained, “Everyone asks me ‘what is your best wine?’ I always tell them this, it is the one that you like best.” No one has ever made that statement to this writer before, yet he feels it is prevalent and it sums up exactly the point of this blog and what wine enjoyment should be about. Would you dare to ask a mother which of her children is her favorite? If you don’t have a wine cellar, why do you want to buy a wine capable of aging for ten years or more? Under improper storage conditions it will likely be ruined by the time you get around to drinking it.

Think of it this way: wine is about pleasure and passion. Passion is not being able to tell your friends, “Parker gave this wine a 90”, it is about offering them a wine that you love and most likely they will be drawn to it as you were. Here is a simple test: try a bottle of wine…in your mind rate it, then visit a winery (or Bodega, or Pazo, or Chateau), and if you are lucky enough to meet the winemaker or someone else who is a full-time employee – not a student with a part-time job –try the wine again. Most likely you will rate the same wine different. See, their passion comes through just as yours does when you talk about wine with your friends. That is the anti-wine snob.

Visiting wineries in Spain as in most countries outside the United States requires a reservation. A tour can cost as much as 25 euros, but a trick to learn, especially if you have visited wineries elsewhere, is to reserve a tasting instead. This will not only save you money but precious time.

I had scheduled a tour of Bodegas Muga in Haro (pronounced ‘arrow’), but when we met the woman in St-Jean-de-Luz, who was an owner of Cune (actually CVNE and pronounced ‘coon-ay’ as it is the initials of the company that also owns other properties in Spain), Sophie Vallejo, she gave us an introduction to Cune, so we were admitted without a reservation and cancelled the tour at Muga which would have been difficult to make as we were coming from two hours away. We tasted six of their wines, including a white wine made from Viura grapes that is high in acid and a very pleasant wine for an aperitif or with fish. In addition, we had five different Rioja wines made primarily from Tempranillo, with varying amounts of Garnacha, Mazuela, and Graciano (one was 100% Graciano, a very temperamental wine of high quality, which I liked best.

The older style wines, like Imperial, which was their most expensive and most highly regarded are aged longer in oak, both French and American, this was a result of the cost of French oak so they bought the wood from America and had their own coopers make the barrels.

Today, only Muga still makes its own barrels, both French and American. Their more modern wines are sold under the Contina label and are much more forward as most people now prefer. The aging time has been reduced to three to four years in oak (the American imparts vanillin flavors to the wine, while French has more spice), then another three to five in bottle. While there are many wines produced here, it is the Crianza’s, the least aged and less complex, while the Reserva’s and Gran Reservas that are the most sought after for the longevity.

We also visited another top producer, La Rioja, which provided us with a beautiful and complex Albariño (not produced in La Rioja but Rias Biaxas which we were unable to visit due to distance). We also tasted their Rioja’s which also are produced under various labels with their best modern style wines as Torre de Oña. The quality of all the wines we tasted at the various Bodegas was amazing.

Later we returned to Muga, which had been closed and Iasted another eight wines, two impressive Cava’s: a brut and a Rosada, both beautiful, especially the latter. Then six more wines including a white made from Viura grapes, and reds from Crianza to Gran Reserva.

A bit of history on Haro. Due to rail access required by the French vintners it established rail service to Bordeaux and Bilbao in the 1880’s, and two years later it was the first town in northern Spain to have electricity, early in the 1900’s. The town is beautiful with Baroque architecture, the vineyards below, mountains in the background, and winding narrow streets (as in most of the north, the streets are almost all one way which is confusing until you understand the plan, and even more so in the larger towns and cities like San Sebastian and Bilbao). Today, only a handful of the ‘old’ bodegas remain situated in Haro, which is at the northwest corner of La Rioja (Rioja Alta). Most of the others and the new wineries are now near Logrono, primarily in another beautiful hill town, La Guardia. As mentioned previously, the new ones are designed by world-renowned architects, and stand out against the mesas with the mountains in the background

La Rioja is in three parts, with Rioja Alta producing the best wines due to a higher elevation, the best soils, and the breezes that come through the canyons of the Cantabrian Mountains from the Atlantic Ocean. The bottom of this region is Rioja Alvesa, still good but drier, and to the south Rioja Baja, which produces grapes with lower acidity, higher alcohol and are coarser due to the more sandy soils.

The regulations for producing Rioja and other wines are strict under the Denominación de Origen Calcificada (DOC). Among these are the length of time required for aging in the barrel and in the bottle which increases from a Crianza, Reserva, and a Gran Reserva. Historically, wines were aged much longer than required…some for twenty years or more! This aging caused the tannins to build up and lose the fruit characteristics. The three producers discussed here and many others, especially the newer bodegas have shunned these requirements for some or all of their wines. Why? Because they feel, and the public would agree judging from the price, makes them better. This follows in the footsteps of Italy’s Piero Antinori, who in 1971 decided to use smaller barriques instead of the huge barrels required under the DOC for Chianti. Both have have been generously rewarded for this by the buying public. Rioja’s may only be made from three grapes, Tempranillo, the mainstay, Garnacha, known in France as Granache, Graciano, and Mazuelo. Most have at least 70% Tempranillo. Some producers are now making single grape wines from Garnacha. CUNE is making a Graciano that was a favorite of mine (the joke, because it is so difficult to work with is that taking the Spanish word for thanks, gracias, they say “gracias, no gracias” Some single-vineyard Tempranillo’s are now being produced such as Contina’s (CUNE) Viña del Olivo, which is very intense…and expensive!

Only recently have I began to appreciate Cava, a sparkling wine made in the traditional méthode Champenois in the Penedes region south of Barcelona. In the 1860’s they imported French champagne-making equipment, usually a Brut or Rosada. It is now being produced in other areas and I particularly liked the Muga Rosada. The prices for these range from 10-20 euros.

I am taking the time today to write as it is raining out – the first day of the entire trip (10 days), relaxing in our beautiful hacienda just outside Donostrio (San Sebastian). The name comes from the Basque (Don a sign of respect for the saint, and Ostrio, for where he died in Italy). Signs are mostly in Basque (Euskadi) and Spanish, but IF you use the Basque you will do better. As for Spanish’, good luck as in the north it is all Castilian (Catalan), so they don’t understand you except in pigeon. That said, these are warm people, and we have had people spend a lot of time assisting us. Once in the Basque restaurant/Cidery (Sidra), by us and a woman at the post office who stayed for half an hour to help us. The clerks were useless. Imagine over an hour to mail a package home!
Adios, mi amigos…
TB

©Copyright 2015 TBOW, all rights reserved.

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traderbill

How did Trader Bill originate? It was conceived by me as a way of providing information summaries of global financial markets so that friends and associates could bring themselves up to speed on events and changing market conditions upon their arrival at work. In addition, it provides information on speakers and economic releases that day with consensus estimates and level of last release so that the reader is prepared to react, or knows how the market might react upon the release of information. Who is Trader Bill? Initially any reference to me was as ‘i’. This is to remove the aura of ego and to suggest that i am but a humble reporter, albeit with 35 years of investment experience. Investments are demanding of ego, however, or one would not feel that he was qualified to manage someone else’s money in the first instance. Therefore i needed an ‘alter-ego’. Like Winchell and Mahoney, Edgar Bergen and Charlie McCarthy and especially Trader Vic and Mai Tai’s! Why Trader Vic? Because he was a likeable man who delivered pleasure to his customers and knew exactly what their desires were. The reason for the alter ego became obvious once I introduced Trader Bill into my commentaries: people started asking what Trader Bill thought. They had never asked me what I thought before, but suddenly they wanted to know what TB thought! Now mind you they KNEW that I was Trader Bill but for some reason he became bigger than life. Maybe it was the small ‘I’? What does Trader Bill try to do?His goal is to educate from his years of experience. Consider that most of the traders and people managing investments weren’t even around in 1987 for the crash! Consider that Graham and Dodd, and even Warren Buffet are not relevant to them, too old hat. Their historical perceptions of markets and fundamentals (earnings, price/earnings ratios, bonds, debt service coverage) are irrelevant in this fast moving world. This is the NEW ECONOMY, or is it? How did your style originate?Years ago i found that i had a knack and talent for writing. In addition, i developed an ability to analyze market news about 15 years ago. It took the Crash of ‘87. Prior to that i was just listening to what others said about the economy. But bond yields had been soaring in ‘87 yet the stock market just kept hitting new highs. That was when i began to learn about markets. i have both a dry and witty sense of humor (some call it inane!). Therefore i attempt to make even the worst news somewhat amusing: whether it is the absurdity of an economic release, or the comments of a CEO. This is trading desk humor (or gallows humor). It isn’t politically correct but it does ease tension. Ironically, it is seeing the light at the end of the tunnel (in the Navy they say: it’s always darkest before it’s pitch black!), that allows you to be more objective in your analysis, as bad as a situation is there will still be a tomorrow! You will see that i practice three-dot journalism, a style made famous by San Francisco reporter Herb Caen, whom i idolized. At least to me it is effective. What is so special about your analysis?Frankly, i don’t know that it is special, but at least it beats “the market closed down today on profit taking.” What i do know is that most of what you read is spat out without considering whether or not it is rational, like the above statement. Is it right? Sometimes yes and sometimes no, and that is the key to what is different about my analysis: it is meant to make you think. Is Dan Rather right or is Trader Bill right? If it causes you to stop and think about it, regardless of whether you agree, i win! Because THAT is my goal…not to have you think i am a guru, got that? Bet you never heard that ANYWHERE before in my business! Instead they want you to think just how smart they are but remember in this business if you are right 60% of the time you ARE a genius! Another thing that is different is when i am wrong on an analysis i will tell you, not hope you forget what i said. So now you have the tools to do what the speculators and hedge funds do: challenge authority, and if you make money it is because YOU did it not me. i was just a tool, your flunky to do the grunt work and let you decide…course you could be wrong too but at least you looked at the big picture. But the goal is also to have fun! This shouldn’t be a business of hushed tones and grim faces. It is a living, breathing thing and nowhere else in the world do you have the odds as much in your favor as here. Just beware of the guy who wants to put his arm around you and tell you he is your friend. So there you have it. I hope you select me as one of your sources for market information. If you do I promise to work my best for your financial success. Trader Bill

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