Vol. 1 No. 8 ….there’s arsenic in the wine! Say it isn’t so, TB…

TB had intended to write more on his trip and has almost completed on segment but this story is too important and also highlights his theme: there are many good wines produced now around the world that are forcing out the bad. Areas that used to just produce a high volume of wine are now making less and at higher quality…a good thing!

It isn’t so! Okay, there is, but an ambulance-chasing law firm in L.A. with the unwitting (?) help of a Denver-based chemical analysis firm (neither shall be mentioned by name so as not to further publicize their heinous actions by creating a scare that is much more insidious than any trace arsenic in wine. Put a stop to it.  Of course they were able to get two couples to file, thus getting class-action status – the Holy Grail of product liability lawyers – but just how have they been harmed? Did anyone suffer injury or die? Wouldn’t it more likely that someone had dies of arsenic poisoning leading regulators to look at wine? Unless the wine industry comes on very strong and proves the suit is without merit, it will probably be settled on the courthouse steps with only the law firm benefiting, and of course, secondarily the chemical analysis firm. I believe there are just four names in the class action. If you have been, or had the opportunity to be, a party to a class-action (most likely through some securities you own(ed), you are well aware of how this works: settled out of court, lawyers and expert witnesses are paid, and in a case against say Ford, for fires in pick-up trucks, the plaintiffs get a $200 coupon to be used on a new…FORD PICK-UP! Why in God’s name would you buy anything from the company knowing that they produced a vehicle that could catch fire (even though the problem was fixed long ago)? In this case, how about if they gave you a coupon for a free case of ‘Two-Buck Chuck’? That’s the ticket.

Enough of the levity, now to the serious side of the issue. The U.S. Food and Drug Agency has decreed that drinking water should not contain more than 10 parts per million of arsenic (this due to a 2013 decree caused by it being in orange juice) that we consume much more water than arsenic…er, wine…a couple of glasses most likely a day, versus a couple of quarts (or liters) of drinking water. The rub is that arsenic stays in your body and eventually builds up (that is the theory of how Napoleon was poisoned, slowly, and without knowing it). How valid is the 10ppm level?

The French drink on average 16.4 gallons of wine per person each year (that’s less than 6 ounces per day or about 9% of their daily intake of water. If the standard there was the 50ppm and assuming their water was right at 50ppm, that would mean the standard for wine could be 500ppm  or higher, with no ill effects. In fact, the results of the lab study here didn’t even exceed the 50ppm level which the lawsuit has labeled.

Yet without saying how many different labels they tasted, they came up with 28 producers and 73 labels, most notably Charles Shaw (Two-Buck Chuck), and some of the others named being sold through Trader Joe’s (talk about defamation!), and other outlets. No one asked them to do this (or so they say), and the wine industry has its own chemical analysis companies that strongly dispute the findings. In their scare campaign they said some of these wines more than 500% of the limit (see they could have said five times which is just 50ppm – hardly worthy of sounding alarms). Even the FDA and EPA said the limit was established for ‘public water systems’ and is not relevant for wine  – how about that?

Back to the 10ppm limit. Canada, conservative Canada (who has to absorb the health costs of their citizens), has a limit of 100ppm. Europe is 200ppm…they too have to pay health costs!

If you aren’t disgusted by our legal system by now, you should be if this case isn’t thrown out of court and the law firm sued for their overblown claims like ‘dangerously high levels’ that are damaging an entire industry.

How did the arsenic get in the wine? It is in all wine and virtually all things including the soil. Diatomacious earth is commonly used to filter wine, with presumably the best filtration methods being used on middle and high-end wines. Sorry, no smoking gun here.

You decide the facts and hopefully this case won’t even come to trial and be dismissed for lack of merit. But is there an upside to this? There just might be. Perhaps consumers will see that for a little more (Two-Buck Chuck now costs $3.50), and Trader Joe’s and other vendors may be able to get people to pay more…there are many steals at all wine shops for under $10, some for as little as $5 (once TB saw a clerk moving a case of TBC and warned him not to drop even one bottle or the profit would be lost). Did you ever stop to think how much just the bottle, label, cork or screw-cap, cost…let alone the cost of growing and processing the grapes? It is hard for TB to contemplate what the wine sells for that allows it to be profitable at less than $10 (we haven’t even considered the cost of production, except by tremendous volume. Try paying a little more and experiment with several wines not just settling for one because it’s cheap.

Happy tasting!

TB

©Copyright 2015 TBOW, all rights reserved.

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.

Vol.1 No. 6 …oh, Spanish wines…

…ok, so the song was Spanish Eyes…sorry!

Tuesday we went back to St-Jean-de-Luz and had lunch at Brasserie Le Madison and at the next table was a Spanish woman who asked if she could help with our deciphering the menu board. We talked and when I told her I was working on a book on wine she told me that her family owned Cune, one of the top La Rioja producers in Haro (the Napa of La Rioja). She was fascinating and talked about during the war, Franco and the occupation of France. She is 81, eleven years older than TB. (Note, this is why we prefer to travel alone as we get to meet the locals and not get ‘wrapped up’ in ourselves. We enjoy travelling with others but our best experiences have occurred when we are alone.) Her name was Sophie Vallejo and when I told her a city in California had that name she told me she had gone there with Robert Mondavi! She was charming and wrote on my card a letter of introduction to her family’s winery, Cune, for a special tour. An interesting sidelight is that Cune is right next to Muga and years ago sold their grape juice to Muga. These are two of the most famous Rioja producers. She also recommended we visit Marquez de Riscal in Alava.

From there we went back to St-Jean-Pied-a-Port, to explore Basque wines. While not as polished as Riojas or Ribera del Dueros, they are interesting and the better ones (about 12-15€) are pretty good and very good value. The biggest is Irouleguy in St.Ettiene De Baḯgorry. The reds are made primarily from Cabernet Franc, Cabernet Sauvignon, and Tannat. The better ones have more of the Tannat grape making them suitable for aging up to seven years. They also make a Cava in the traditional French manner that is excellent value and very good. To be honest, TB had not been a fan of Cava but the more he learns, the more he sees how well it is made in the traditional manner. My favorites were a 2013 Kattalingorri, a wine made without herbicides (as the Lady Bug on the label indicates). And a 2014 Mignaberry Rose that is an aperitif. The tasting room was very nice and could stand up to ones in California – no appointment needed.

The Basque Country, both Spanish and French, is beautiful…and the people are so proud of their heritage – especially those on the Spanish side (don’t say that in front of them though). It took me back to Northern Ireland…protest signs on barns and rock walls for independence, and road signs in Spanish crossed out so only the Uresqea remains. Warm, friendly people who are hardworking and funloving.

Next stop: La Rioja

TB

©Copyright 2015 TBOW, all rights reserved.

Vol.1 No. 5 …sleepless in San Sebastian

…actually in Hernani, just out of the town. I woke up and couldn’t get back to sleep because I am a week late updating the blog…not that I haven’t been working, but I had planned to describe the trip so readers can share in TB’s great adventure.

We arrived very tired on Wednesday, March 3rd having lost a day traveling. Several things stood out: first, coming from freezing weather in Minneapolis, it has been in the mid to high 60’s here and the last rain was the earlier on the day we arrived. We had expected to be able to navigate easily in San Sebastian and Bilbao but they are good sized cities that are built with narrow streets. It seems there are more cars than people and they are all parked, leaving no spaces for anyone else. You have to park in an underground garage and that can cost 20 Euros a day (originally we found a nice place in the old town but it had no parking and so that 20E’s added up quickly so we found a wonderful (and cheaper) place in Hernani, just 3 miles out of town. It is the perfect base for us as it is on the way to Pamplona, La Rioja, Bilbao, and the French Basque Country (the Spanish Basques consider themselves superior because they have refused to adopt the Spanish language and still fight for independence), and the owners are wonderful as is our ‘uber-modern’ apartment with a deck.

After resting a bit we ventured into Hernani and found a tapas bar for our dinner. They are excellent and you choose from them sitting on the bar and they are very reasonable (drinks and six tapas cost just 10€).

We spent most of Thursday in San Sebastian and then drove down the awe-inspiring coast to Bilbao where we ate in another tapas bar (the etiquette is that you throw your napkins on the floor while you are eating thus keeping the bar clean and clear). We will return to Bilbao for the Guggenheim and other sights.

On Friday, we returned to San Sebastian and took a great double deck bus tour for orientation and had a wonderful lunch in a beachside restaurant.

Saturday, we were told about a wine festival in Durango, on the way to Bilbao. It featured 44 wineries from all over Spain and local food. That meant a total of over 120 different wines some for casual drinking priced from 4 to 15€ a bottle, but there were also fifty priced above that with fifteen priced from 25 to as high has 76€ (a wonderful brandy from one of the very best sherry producers, Ximénez-Spínola, but my favorites were their two aged sherries…and I spoke at length with the winemaker; since they are produced in Jerez in the south, we wouldn’t have had that experience).  There were Riojas, Albariño’s, wonderful Cava’s, Ribero del Duero’s, and even some Basque wines, like Txakoli (Chocoli), a white. It was a fascinating experience.

On Sunday, we drove into the French Basque country and up to Bayonne, France, where I ended up speaking to an American who tried to help us talk to the owner of a shop. It turned out that he is an ex-Pat, who not only lived in San Francisco and New York before moving to France but was also in the investment business – he had worked for Bank of America when I was buying bonds from them and although we had never met we knew each other and reminisced about mutual friends – it truly is a small, small world! We then drove down the coast to Biarritz and St. Jean de Luz before returning home. It was refreshing spending a day where English was understood.

Today, Monday, we returned to the French Basque Country and drove to St-Jean-de-Pied-a-Port, where the Campostela begins (a nearly 500 mile pilgrimage to Santiago de Compostela, made famous by the Martin Sheen movie, The Way). Hopefully, TB won’t go to hell for getting a passport for the pilgrimage with no intention of making the endurance test. I got the first stamp and will hopefully pick up some more during our travels. I rationalized it that since we only have two more weeks in Spain I couldn’t have completed the journey anyway.

More to follow tomorrow…

TB

©Copyright 2015 TBOW, all rights reserved.

Vol. 1 No. 4…a visit to Schram’s – berg…(updated 2/22)

A little play on words. As it was the writer’s intention to cover more obscure wine regions and their wineries, this seems to be a good time to do so. Since beginning this blog, Schram is the first winery I have interviewed. There will be more, interspersed with other columns. Hope you find it interesting.

Schram Vineyards was started in 2008, as a result of Ashley and Aaron Schram’s passion for wine.
Establishing and operating the vineyard was no easy task with both working full-time. As if that wasn’t enough they soon had a baby, and then a second (she quit her corporate job on that child’s second birthday), and became the full-time manager with the equally important additional task of being a full-time mom. It is their passion that brought me to the winery in 2013, and why they are included in this blog (book?).

It is great fun to own a vineyard and winery (more so if you are a millionaire or more likely a billionaire). Sexy, romantic, and you establish yourself as an esthetic. After all, you can hire people, most of them fairly inexpensively…with the exception of a winemaker. However, you get to take the bows. Still the Schram’s are having fun. TB could name a few gentlemen vintners but instead would rather focus on those who put ‘sweat equity’ as well as real money into their endeavor. The obvious places are California, Oregon, and Washington. Since wine is produced to some degree in all 50 states), and living in Minnesota I decided to look at wineries here, in Wisconsin, and also in New York. TB even had a bottle of wine once from New Mexico, La Bombe, the winemaker being a scientist at Los Alamos who made the wine in his garage. The label showed a mushroom cloud…and the wine was pretty good too!
I took note of the Schram name because of the similarity to Schramsburg ( founded by Jacob Schram in 1862), the California producer of sparkling wine. Although Schramsburg is made to closely match French Champagne, the French sued and now the appellation can only be used for those wines made in the Champagne region.  Considering some of the ‘plonk’ that was passed off with ‘champagne’ on the label, who can blame them? Schramsburg became world-famous when then-President Nixon decreed that all wine served at the White House would be American-produced (this did not stop him from having a bottle of Chateau Margaux on the floor beside him…what did you expect from the man? It’s good to be president!

The Minnesota Schram’s first harvest was in 2011 but they sold all the grapes to other local producers. Their wines are now produced with about one-third of the grapes from the ‘estate’; other Minnesota growers; and from Yakima, Washington.

They use screw cap bottles, which some of you may be surprised to learn, are as expensive as bottling with corks. The Kiwi’s and Aussie’s were the first to do this with Randall Grahm (Bonny Doon), being the first well-known producer to adopt it. Take the romance out of it, and screw caps are more reliable. Ah, but what about the aging, you say? Did you know that if you store the wine long enough the bottles will probably have to be re-corked (Mouton Rothschild does this for its wine for free when they come to the U.S.). There is also the possibility of a ‘corked’ bottle (not a pleasant taste), not to mention some people saying they don’t like a wine and declaring it corked. Either way it is expensive for the winery.

They were assisted in the beginning by enologist Nick Smith, who teaches Enology at the University of Minnesota, where many varietals have been improved or created. Aaron, who has been making wine since he turned 21, learned well and fine-tuned his winemaking skills.

The Schrams have ten acres of land suitable for vineyards, of which six are gently sloping, southerly facing, and have plans to plant the other four acres soon. Their sales (increasing them for a young winery is always difficult) gradually grew and last year expanded by 200%, quite a feat and made possible by adding beer last year!

Schram produces wine from eight different Minnesota varieties — Marquette, Frontenac Gris, Sabrevois, Petit Pearl, Prairie Star, Brianna.  In addition, they use Chardonnay, Pinot Gris, and Cabernet from Washington.  From these they produce seven wines including their signature wine Marquette also available as a Reserve wine that is barrel-aged for 14 months. In December, they released their first sparkling wine, moving them somewhat in the direction of the California Schramsburg.

All is going well with Schram’s new community room (tasting room), and as if that was not enough they added a brewery. That is not as far-fetched as it may sound because you use much of the same equipment that is idle after the harvest is completed. There are a few other wineries in the U.S. doing this but Schram may be the first to do so in Minnesota. The advantage is that if one person in a couple only likes to drink craft beers, and the other only wine, they can provide both and make the thought of a visit more attractive to them. As TB has found over the years, it is not a far stretch to transform a beer drinker to a wine drinker, especially when there are several wines, both red, white, and a sparkler, as well as eight craft beers on tap!

From Spring through Fall they have wine tasting and fun events, making use of their beautiful outdoor space. Beginning this Valentine’s Day, they are offering dancing lessons one Saturday night a month; Case Club activities, ‘Paint and Sip’ nights, and many other events. They also serve as a venue for parties, weddings, etc., but Ashley made it clear this will not be their focus, as it is at some wineries.

If you are in the Twin Cities region, TB highly recommends taking the drive out Hwy 5 to Waconia and visiting the Schrams as well as some of the other vintners in the area. You might be surprised and you won’t be disappointed.

TB

©Copyright 2015 TBOW, all rights reserved.

Vol. 1 No. 3 …French Laundry update; Wine ‘Investment’ Clubs

According to the Napa Valley Register and other sources, most of the wine stolen from the French Laundry on Christmas Day was recovered in…of all places…Greensboro, North Carolina? Don’t have the details on how, or why it was there, OR how they located it. Those of you who have had property stolen know the frustration of having the property held pending trial – which in this case may or may not occur since they have no suspects in custody, or even identified. So where is the wine now? In the ‘safest’ place the authorities could find: the French Laundry’s OWN wine cellar. Wait…wasn’t that where it was stolen from? Worse, they cannot sell it until the investigation is complete. (Why does the evidence have to be held when there are so many ways of authenticating evidence today…and it is not ‘unknown’ for evidence to disappear even while in police custody (aren’t you shocked?)

Unanswered:

First and foremost: was the wine damaged? How was it cared for after the theft and AFTER the police recovered it? Would you buy the wine if you were dining there? Not TB, no way! Keller most likely would have done better had he been able to collect the insurance and buy more wine like it!

Next item on the agenda: According to the January 23, 2015 issue of Financial Advisor magazine, “more than half a dozen firms peddling wine investments, in the U.K. alone went belly up last year. “Why have there been so many flops?” There are lots of reasons…the article cites one fund, The Wine Trust, in the U.S., where investors put their money for eight years, but here’s the rub (at least to TB): they have $15-20 million in assets. When something goes wrong what can they do? Sell? To whom?

Another fund, Belgium-based, had wine assets worth 102 million Euros ($115 million in today’s market – $125 million according to the article which illustrates yet another risk: currency – at the end of 2012, then someone questioned their valuation methods! Like a fire in a theater, investors headed for that small ‘doorway’, and the fund could not meet ‘net redemptions’ (a not uncommon problem of any mutual fund – stocks, bonds, options, etc.

Besides ‘questionable’ appraisal methods (remember they use last price at auction…and there could be just one fool…or there could be trading among several holders…it happens in small stocks…and especially penny stocks, so why not wine? This is not to imply that the fund managers are dishonest (talking about wine), but they wouldn’t know why the price was being bid up if the ‘group’ consisted of several high-profile members.

Why would they do that? Why would a known billionaire and expert on wine have created counterfeit bottles and attested to their authenticity? Why did Cruse, a famous French wine negociant (not to be confused with a California firm with the same name), would risk, and eventually destroy the firm’s long-established  reputation by bottling cheaper wine as Pouilly-Fuisse? They were eventually charged, convicted and heavily fined. There have been several scandals, the worst being when methanol was put in Italian wine, killing six and injuring at least 30. The point is that wine prices are especially susceptible to scandal. To TB it is like people who don’t trust the U.S. Dollar, so they are investing in Bitcoins!

Back to investment clubs and the FA article. They discuss a 2009 bottle of Chateau Smith Haut Lafitte which rose by 143 percent between June 2010 and December of the same year! Meanwhile, French first-growth wines rose by 345 percent between 2005 and 2011 before falling 41 percent through November 2014. Let TB clarify this for you: that 41% decline is off the 345% which would reduce the gain to 203% – which means you had better have gotten in very early! Conversely, to get back to the high would require a 70% increase (something even stock investors fail to understand!).

But the real catalyst for price escalation was the Chinese, who shifted their attention from first growth Bordeaux to premier cru Burgundy, causing a reversal of fortune. Worse yet, the Chinese government cracked down on bribes of public officials (TB is SHOCKED), thus slashing demand. Recall TB’s comments in the first blog, citing Red Obsession, which stated that all of the great wine would be bought by the Chinese? TB’s response was: the same was said in 1988 – the year before the Japanese economy imploded and hasn’t recovered since then. Even diamonds aren’t forever, right Mr. Bond?

So TB will close with the same advice that he began this blog with: drink what you like, and buy what you like…not what some industry-anointed expert says you should…you will be happier and you will have more money in your pocket.

Until next time: don’t ‘stay thirsty my friends’ – drink up! This ain’t no library! (said by the bartender at an enlisted men’s club when TB was in the Navy).

TB

©Copyright 2015 TBOW, all rights reserved.