French producers started to return to their estates this week after their annual August holidays. I was on the news desk at Decanter.com and here’s the highlights of this week’s news.
It was a busier week than anticipated with the harvest beginning unusually early in Bordeaux. Sauternes star Chateau d’Yquem and rose producer Chateau de Sours started to pick the first grapes on Wednesday.
On Friday. Champagne producers in a number of villages were also permitted to start the harvest. The only harvest that has ever been earlier was the sweltering 2003 vintage. Grape growers and Champagne houses came to a compromise to allow 12,500kg to be harvested per hectare this year – more than 20% up on 2010, in response to growing demand
Heading to the southern hemisphere, New Zealand was covered in snow. The white stuff even fell in Auckland for the first time since 1939. Unhappily for one winery, it wasn’t just the weather that was gloomy. Gisborne winery Amor Bendall has gone into liquidation. The company has faltered amid the oversupply situation, the strength of the New Zealand dollar, and tough competition. The question is, who’s the next victim?
Over the Tasman, Australia is also struggling with its oversupply problems, and change is not happening fast enough, according to its generic body, Wine Australia. Its chief executive has been brutally honest, admiting many players are still in denial that the problem is long-term and requires major change. The new realities reshaping the industry include depressed trading conditions in its two main export markets: the US and the UK; the continued strength of the Australian dollar, higher production costs and tougher competition in all markets. Bulk wine sales and ‘opportunistic brand trading’ have also eroded margins, said Wine Australia’s Andrew Cheesman.
August is a quiet month for the wine industry – most of France, Italy and Spain go on holiday. Yet, there’s been plenty to write about this week at Decanter.com, where I’m acting as news and commissioning editor. So here’s a digest of the main news stories in the wine industry this week…
Champagne
The Champenois have announced the yield for the 2011 vintage – 12,500kg – which is approximately 20% more than last year due to increased demand for bubbly. The Champagne houses wanted a higher yield with their sales up 13% last year but the growers weren’t so keen, and this was the compromise.
The Champagne region is now recovering from a blip during the economic crash of late 2008 and if sales continue on the upward curve it is now on, they’ll have a shortage. The industry is currently undertaking research to figures out a way to manage supply and demand. With a restricted area that is planted to bursting point, they will struggle to make more, so it will be interesting to see what solution they come up with.
Burgundy
In Burgundy, five grands crus vineyards are banning the use of machine harvesting from the coming vintage. I spoke to president of the Union of Burgundy Grands Crus, Louis-Michel Liger-Belair, during his holiday in Tuscany to ask him why they’d done this. There are 5% of the grands crus that use machines and it gives us a bad image. Hand harvesting does cost a bit more but the quality is much better,’ he said.
At the end of the week, Domaine de l’Arlot’s winemaker of 13 years has also left to establish his own domaine down in the Ardeche. More on that next week, I hope.
USA
Over in the US, there have been acquisitions aplenty. At the start of the week, Fiji water billionaire, Stewart Resnick bought Chardonnay specialist Landmark Vineyards of Sonoma. It’s the second purchase for his company Roll Global in eight months.
Roll Global is one to watch, as is Alejandro Bulgheroni. While most magazines reported his acquisition of Renwood Vineyard from the company’s press release, there seemed to be more to this one. A 20-minute chat with Alejandro, revealed he was not only a charming businessman that has made his millions in oil and gas, he’s also got grand designs for a wine empire, aspiring to run six wineries, including what’s thought to be the world’s southernmost vineyard.
UK
London rioters stormed Michelin-star restaurant The Ledbury at the start of the week, smashing windows and stealing personal items from customers. The Ledbury’s kitchen staff managed to chase away the rioters, armed with a variety of kitchen items. While it must have been terrifying for diners, The Ledbury offered them all Champagne to ease their anxiety.
Further restaurant news in London: Spanish chef Jose Pizarro will be opening a Cava bar at his new restaurant Pizarro. It is in Bermondsey Street – the same road as his newly-opened tapas and sherry bar. It should open in October. Should….
I’m currently researching the emergence of sherry bars in London and the current fortunes of the sherry industry. While it means drinking a lot of sherry like Tio Pepe en Rama and a 1968 Oloroso with iberico jamon and other delicious morsels (woe is me), it also involves a lot of staring at statistics.
The UK head of the Sherry Institute of Spain supplied me statistics enough to drive me to drink but also some fun statistics from New Zealand. From the figures, it would seem I am making a fair dent in the Manzanilla sales in the country. I probably drink a couple of litres of the stuff each month, so 12 litres in the first half of the year. In the past six months, just 352 litres of Manzanilla were exported to New Zealand, making my personal consumption almost 3.5% of the country’s total consumption!
Fino exports are thankfully rather higher at more than 6000 litres between January and June.
It might come as no shock to Brits that almost 60% of sherry sales in Aoteroa are sweeter styles like ‘medium’ and ‘cream’. I have moved thousands of miles yet can’t get away from a nation of sweet sherry drinkers. On the other hand, there are a lot of British ex-pats and even a British corner-store selling Branston pickle, Yorkshire tea and I’m sure if I ventured in, there’d be a dusty bottle of Croft or Harvey’s Bristol Cream on a shelf.
So, inspired by the likes of Jose and Pepito I may have to run a Sherry evening upon my return to New Zealand – who knows, it might improve the stats!
The latest figures from the UK show the average price of a bottle of wine from its 10 major wine supplying-countries has risen across the board. Shock horror, even unfashionable Germany has managed a price increase!
Cause for celebration? On the surface, yes. It suggests the consumer is trading up, willing to spend more but look deeper and things aren’t as rosy as they first appear.
The average bottle price of a New Zealand wine is up from £6.01 to £6.07 per bottle in the UK off-trade, Australia has seen a 13 pence increase to £4.72 while the average price of a South African wine is up 40 pence to £4.39.
However, increased duty charges and a weak British pound vs. most currencies suggest that the increased costs in the value chain are not being passed on in full. Customers are paying a bit more for wine but it appears that it is suppliers that have to absorb most of the cost increases. This is a problem for profitability.
In South Africa, Australian and New Zealand, strengthening currencies and duty rises meant existing prices were unsustainable. In some instances average bottle prices have increased but total sales have fallen. South African sales have dropped by 15% in value in the past 12 months and 22% by volume.
Australia and New Zealand have increased sales volumes but how much of that is sold at huge discount, bulk shipped and made into supermarket brands? According to Wine Australia, in the past year 47% of all wine shipments from Australia were bulk not bottled. Is this a sign of Australia’s economic credentials (bulk shipping has a lower carbon footprint than shipping in bottle) or is it a consequence of its massive oversupply problems?
What is clear is that consumers are being forced to pay more for their wine in the UK, producer margins continue to be nibbled away. Profitability has to come before volume sales if wineries are to survive. But, as South Africa has witnessed, there’s only so much people are willing to pay.
Barolo is not a wine for the elderly or terminally ill. It takes a good 20 to 30 years before the tannins become approachable and you’re going to have to stick it in the cellar (or under your bed) until it comes around.
And if you don’t like tannins or acidity, you’d better walk past the Barolo section.
At an Ascheri dinner with Squisito Fine Wines, we were treated to a vertical of Barolos as far back as 1996 and cor blimey, they are still babes in arms. Most wines are dead as dodos by the time they hit 5 or 10 years but not these bad boys.
The likes of Ascheri are from the ‘traditional’ school of Barolo, leaving the wine on its skins for up to 40 days after fermentation completes (that is a loooooong time) and then putting it in oak for 2 ½ years. The modernists take it off the skins much earlier and like plenty of new oak to give more fruit and vanilla flavours.
Wine of the night has to be the 1996 Ascheri Barolo. It’s still as tight as a pair of speedos with lovely mid palate weight, incredible concentration and drawn out, finally-woven tannins. A really elegant wine that’s got lots of life left in it.
I took a moment out from tasting Barolos with MD of Squisito, Alberto Cenci, who tells me about his Italian-Kiwi romance and his love of Aerosmith….!