Vol 2 No 17…are you a Giffen or Veblen type?

The correct answer to that question should be: neither, and damned proud of it! There is no comparison between buying any wine of similar quality, whereas there is between a Rolex or Prada knock-off. After all it is you, dear reader, that should trust YOUR palette. Me, you ask? Yes, ‘you’ because if you don’t like it who cares what Trader Bill or Robert Parker, or any other critic says about it. Truth, TB does not consider himself an expert, just someone who knows what he likes and trusts his own palette. Of course, this only came after a few years of buying what Parker liked, then serving it at a dinner and no one raving about it. Is he wrong? No, not for him, but the downside of this is to get that coveted 90-point rating, producers are sending samples to labs who tell them what they need to do to make it one. In other words: how can you buy someone’s rating without knowing what she likes in a wine? I believe it was Gerald Boyd, who asked this in a column of his decades ago.

In economics, there are two ‘effects’ that violate the laws of supply and demand. Rationally, as the price rises there should be less demand for a product, yet some goods actually see an increase in demand above a price point. These goods fall into two categories:

Giffen Goods are goods that when the price is raised the demand increases. I would suggest that Apple computers and iPhones are examples of this. It tends to affect the middle class and below as they might see a perceived scarcity value

A Veblen good is similar then that as the price rises more people buy the product because of a belief (rightly or wrongly), that a higher price suggests better quality. This is applicable to wine, and to upwardly mobile people who want to be perceived as better off than they are.

Wine, to TB, would be the latter. In terms of quality, labor, etc. a $20 wine should be better than a $10 wine so people will shun the cheaper one to own the higher priced one. But what about a $50 bottle and a $200 bottle? Is the higher priced one truly better? Let’s say it’s 10% better…or even 20% better. Was it worth paying 400 times more? We aren’t NASA where the success of a mission can depend on quality and for 98% reliability they might pay 400 times more (not talking about those $400 hammers we read about).

So pick your price range: for every day drinking, for when guests are over, or for a really special event. I suspect most of you will be much closer to the $50 wine than the one costing $200. Think about it.

But what causes this to occur? It could be ‘wine snobbery’ (after all we see this with whisky that has no aging potential…a definite Giffen good), or fear of being embarrassed, or any number of things.

There is a blogger (reversewinesnob.com), who says you should never pay more than $20 for a bottle of wine. Really? …and he knows this because? Then of course there is Two Buck Chuck (Charles Shaw), creator Fred Franzia, who says never pay more than TEN dollars for a bottle of wine…does this mean a price increase is coming???

The blogger even devised a tasting scale (although he admits to never having taken a wine course). Let’s say that two wines score an 8 and a 6 respectively. The first is $20 a bottle so he adjusts the rating down to say a ‘7’; the other gets boosted to say a 7 also. Obviously you liked the higher priced one more so your decision should not factor in price but enjoyment (as long as it is in your price range). I will make no further comments on this except to ask if being a ‘reverse’ wine snob is perhaps as being the real thing. You decide.

I suggest going to a good wine shop or liquor store that places a high emphasis on wine. As fellow blogger, Mike Veseth says, there is a ‘wine wall’ that is overwhelming and makes it very difficult to decide. In the wine shop you can get suggestions or perhaps advice on what wine you might like. I believe you will do much better this way than the ‘pig in a poke’ method at the supermarket.

Lastly, so you don’t think I am opposed to paying high prices for wine. Set your budget and work within it. I believe there is much better quality in the $20 range…even the $15, and perhaps that exists up to $30 a bottle. Above that the differences are very hard to detect (usually and for most casual drinkers). One reason is that the big producers know the price points and that keeps them pushing towards lower than higher to maximize sales. At the extreme is Two Buck Chuck which produces more than a million bottles a year (he also owns 40,000 acres of vineyards making Bronco the biggest vineyard owner in the U.S. The grapes are not hand selected, rather, he makes the rows as long as possible so the tractor reduces the number of times it has to turn around. Both ripe and unripe grapes are picked as well as anything else that wanders on to the vines (use your imagination). Also, when the wine goes to the stemmer or crusher further sorting is not done by hand – a necessity in a premium quality wine. If you like it, fine, but you do get what you pay for.

Think about that for a moment: winemaking is an art, yet we are attempting to turn it into a science just to please the palette of one man, who by the way, likes big, dare a say HUGE, bold wines with heavy tannins and often high alcohol. It is for that reason, he no longer personally rates Burgundy wines, having been demonized by those winemakers for trying to make their wines something they are not (unfortunately, some of our pinot noir growers in Oregon have followed his lead and tried to make a ‘power’ wine from one that is supposed to have subtle nuances). This is furthered by a winery he and his brother own there that did just that. He doesn’t rate his own wine, but does he have to? Isn’t a critic or a buyer going to ‘know’ that simply because he makes it, it must be the benchmark?

Part of the problem is our ‘elevated’ status of winemakers. In France, and Spain, there is no word for winemaker. In France, it is ‘vigneron’ or one who tends to the wines; the spanish use the term elevador, or one who tries to improve (elevate) the wine. That takes much of the ego out of it. I was once told by the pioneer California winemaker, Joe Heitz, that “people romantize wine…it’s farming…agriculture.” Of course, Joe was a farmer, and also one of the finest winemakers in America. He knew, as all people in the industry know, that you can do everything right and still end up with a mediocre or worse wine. If it is a bad year and you are a premium wine producer who cares about quality over profits, wouldn’t you sell the grapes in a bad year or produce them under a second label? Not so, in many regions, particularly Bordeaux where the prices move in one direction – even before the Chinese drove prices to the moon – and sadly they are aided by the critics. Did you know that Parker tastes the wine a week before the rest of the critics, and that in both cases assemblage has not occurred? That is the blending of the various barrels to achieve the best quality wine…note that we are still talking about wine that is just six months old! Furthermore, since Parker likes heavy tannins they provide him with a sample from a heavily oaked barrel, whereas the Europeans like softer tannins. Yet we buy based on these absurd ratings. Also, I believe that the critics fear writing a bad review as they might not be asked back, quel horror! Yet we salivate to find and buy these wines because we don’t trust our own palette…or worse, because we are ‘wine snobs’ who buy based on price and rating, not what appeals to us. Furthermore, the best wine in the world can taste awful, or at least not at its best, when paired with the wrong dishes.

Having returned a month ago from Spain and Portugal, and seeing the values in wines there, I continue to be amazed at how people cherish ‘cult’ wines. Furthermore, how much more you can get by producing fewer bottles. Not only that, why people clamor to buy a 90-point wine by one of the half-dozen or more critics, yet shun an 88 or 89 point wine. It certainly isn’t economically sound given the huge jump in price between those two levels.

Do you honestly believe you can tell the difference between the two? Do you even understand the 100-point rating system that Parker thrust upon us nearly 40 years ago?

Originally, there was the UC Davis scoring system, of 20-points that broke it down in categories where you might award 1-3 points for color, clarity, nose, complexity, and an equal component taste. It was thus a way to determine if a wine is well-made. Parker changed all this with his 100-point system that he saw as mirroring school grades. It actually did it so well that is now suffers from the same affliction: grade inflation!

Originally,  Parker didn’t tell us how he did it but it comes down to this:

Of the 100 points, FIFTY are automatic: no criteria, so it is really a fifty point system. Then, similar to the UC Davis system, it is broken down into categories, but the real clincher is that 25 points are totally subjective, based on your overall opinion (the operative word here), of the wine. So let’s say it ‘aced’ all of the other categories. You add in the 50 points and you are at 75. Now, dependent on how it tastes to me, the critic, I could award 5, 10, 20 or even 25 points to the rating. A sham? No, because I know wine…and it damned well better taste the way I like it!

So what we have is a system that rewards the winemaker for ‘standardizing’ to my specifications the wine. In Europe, aka the old world, there is much more emphasis on terroir, the characteristics of the soils, site situation, micro-climes, and more in deciding how good the wine is. Well, in Bordeaux not so much, thanks to the 1855 classification that delineated the regions ‘based on quality’. Uh, not exactly, they took the five most expensive wines and determined that they must be the pinnacle, really. Then they built the appellations (St. Estephe, St. Emilion, Pomerol, etc.) around those vineyards. Beyond those first growths came 2nd’s, 3rd’s, 4th’s, etc. Beyond those you were outside the appellation. But is that meaningful? Not when Lafite Rothschild can buy an ‘adjoining’ vineyard ‘outside’ the appellation and blend it with their production. Furthermore, the big chateaux are mainly owned by corporations or billionaires now, and what do they want? To force out their neighbors, especially since 2008 when the Chinese got on board. Did you know that to be a ‘classified’ growth now you have to have a large parking lot, among other things, which has resulted in some formerly classified growths becoming losing their status. Some are irate, some say their customers know the quality of the wine so they won’t fight it…if they could, that is because the fix is in.

But it gets worse: at those prices they don’t want to lose a single grape. So they spray, from helicopters, pesticides and overuse herbicides, to insure a good yield, So, samples of all the classified cru’s were sent to a lab. Guess what? They had traces of chemicals – including a couple that are on the banned list! So much for quality, but if that was all, it wouldn’t be so bad. But their flagrant use of spraying is contaminating water supplies and more making children and others sick, but that is not their problem. Ever hear of Flint?

Don’t take TB’s word, instead read Vino Business, by Isabelle Sapporta, a French investigative reporter who for some strange reason hasn’t had a ‘hit’ taken out on her. Critics: why are you ‘outing’ this obscene behavior. Should we have to take a bottle for chemical analysis to insure it is something we want in our bodies? You decide.

In closing, my favorite quote is by famed winemaker Heidi Peterson Barrett, who when told a Jeroboam of her famed Screaming Eagle Cabernet sold for $500,000 at the Napa Valley Wine Auction, said she was pleased but added this: “it’s wine, you drink it, it’s gone.” Think about that and also the number of well-known people who end up auctioning off their wines because they realize they will never be able to drink them all (or even make a dent), in their lifetime (TB’s wife is known to accuse him of this and his cellar isn’t that big!).

Hope you enjoyed this…comments are welcomed!

TB

Vol. 1 No. 26 …not what I want to write about!

…BUT, I must. This website is about a passion for wine: winemakers, wine shops, wine enthusiasts, and of course, TB.

I read a blog yesterday that bothered me. Won’t go into who it was, but it was praising someone who runs completely counter to what we are about here. I will continue to read the blog because it is of interest to me, but have stopped reading another one that says you should never pay more than $20 for a bottle of wine, and developed a rating system (although the writer/author admits he has never taken a wine course, never participated in a wine tasting, which he is critical of, and to TB’s way of thinking is comparing apples to oranges – or should I say ‘wine’ to ‘plonk’).

While there are many good wines at less than $20, and some ‘passable’ ones (but lacking character), below $10, that is not what we are about here. Instead, we are about learning more about wine by trying new wines and most importantly, trusting your own palette as you are your own best wine judge. If you don’t like it, so what if Parker or some other wine writer gives it a 90? To do otherwise makes you a wine snob, not an aficionado.

The last three updates have been on, in order of appearance:

  1. the buyout of SAB Miller by ImBev, creating a global monopoly in Beer, and the corporate giants that are absorbing smaller, high quality wineries, which will ultimately result in lowering the quality of the wine due to the emphasis on ‘the bottom line’. The top three of these are Constellation Brands (virtually unheard of and with no quality label before acquiring Mondavi), Gallo, which is another of the top three globally, and Bronco Wines, maker of Two-Buck Chuck;
  2. a book, Tangled Vines by Frances Dinkelspiel, which covers the dark side of the wine ‘industry’ (don’t you hate that word?), and also the first California wines which were in Los Angeles in the 1800’s; and
  3. Dr. Konstantin Frank and the winery bearing his name. A true innovator, as was his friend Andre Tcheleschieff (the great California legend who trained so many well-known winemakers), and who collaborated with Doctor Frank.

TB hasn’t said boycott the brands of those big wine companies (although he did suggest doing so with the breweries), especially Two-Buck Chuck. Instead, he took a positive approach: drink your ‘Chuck’ or other inexpensive wine during the week but experiment on the weekends with at least one new, quality wine.

So what made TB feel the urge to crusade today? the blog mentioned at the top of this edition which was about a wine event to be held in January, the Unified Wine and Grape Industry Symposium, the largest wine industry trade show in the U.S. Bet you won’t see a lot of the small wineries represented there, and if you do it will be to keep their presence known, perhaps looking for a buyer?

Now to the meat: the blogger noted that Fred Franzia, CEO of Bronco Wine Company will be the keynote speaker. Franzia is a super-salesman and innovator, having bought Charles Shaw, and turning it into Two-Buck Chuck with the help of Trader Joe’s (no relation to Trader Bill but along with Trader Vic part of the inspiration for his pseudonym). This winery produces 20 million cases (240 million bottles!) a year and has produce over 6 billion, yes billion bottles since inception in the 1970’s. It no longer sells for $2 but more like the $4-5 range, but Franzia has said “never pay more than $10 for a bottle of wine”. Is the fact that he didn’t say $5 a warning of a price hike ahead? Time will tell…always does.

The blogger had visited Bronco’s operations in Napa (distribution center), Lodi (some vineyards of the 40,000 total in their portfolio), and Ceres in the San Joaquin Valley where the bulk of the grapes come from. He commented on the cleanliness and attention to detail. That however, is disputed at http://www.snopes.com/business/market/shawwine.asp

In addition, as I pointed out to the blogger, Franzia was convicted of a felony for blending inferior grapes with zinfandel and others, resulting in a huge fine of $4 million, but allowing Franzia (no longer associated with the box wine company of the same name), to not go to prison as several others did. Don’t just trust Snopes on this, Tangled Vines, talks about it in length including comments by the investigator and the prosecutor.

Having the distribution center in Napa, Bronco called it Napa Valley wine, until the AVA objected but they can still say, Napa, California. Does that sound like a high quality wine to you?…or one that is out to make money on volume? Sadly, I find people, mostly seniors, that only drink, Two-Buck Chuck. As reported everywhere: good wine is forcing out bad all over the world. That, however, does not mean all wines are high quality, just no serious defects, i.e. you get what you pay for.

To TB, despite all the efforts by those truly interested in making high quality wine, not simply making money, these wines thrive but people are reaching ‘up’ according to a wine industry study which saw the most growth in sales in the $10-20 range instead of stagnating in the <$10 range.

Now let’s look at the profit: Gallo Hearty Burgundy, once a darling the late Robert Lawrence Balzer, the pioneer wine writer, who seemed to equate it with the best California Cabs, in his reviews, is sold in magnums, 1.5 liters, instead of the normal 750 ml bottles. The price of a magnum is considerably less than two bottles of TBC. Also, there are wines sold by the gallon or in boxes of 2 liters or more, that are as good or better and cheaper.

Trader Joe’s acts as distributor and retailer (except in New York which prohibits it). This may have been the impetus for Total Wines to do likewise. A normal discount to a distributor is 30%, so Trader Joe’s is making a nice profit, as Total does with its ‘bin’ wines where it too buys direct from the winery resulting in profits of 30% or more, while making small profits on high quality wines – which are actually the best value to you, the consumer. Keep that in mind when you are looking for ‘bargains’.

Now let’s look at this from an environmental standpoint. The San Joaquin aquifer is the second largest in the U.S. Believe or not in climate change, that aquifer has been largely depleted by well-drilling by farmers, largely grape growers in an area that was and is not a natural agricultural area (oldies like TB will recall the 1986 book, Cadillac Desert by Marc Reisner, and last revised in 1993, one of the first ‘green’ books, as was the documentary movie, The Sea Around Us by Rachel Carson written in 1951, and we didn’t learn from that either).

The depletion by wells deeper than the height of the Empire State Building, is causing the land to sink, and arsenic levels to rise; not a good combination. In fact, there has been at least one class-action lawsuit over arsenic levels in wine from the valley. To TB’s knowledge, all have been dismissed as the levels, while high were not serious in wine do to the low consumption relative to water. The valley is very heavy in Almond trees and grape production, both of which consume large amounts of water, and in the case of wine, for what? To enrich the winery owners?

That is now off TB’s chest so he will get back to the New York and California wine pieces discussed far too long ago.

Best,

TB

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