The En Primeur Game

Influential wine people have been railing against the Bordeaux en primeur system recently, on the back of record levels of trading for the recently released 2005 vintage. Ex-Petrus winemaker Jean-Claude Berrouet has called the system a "madness" and Jancis Robinson has understatedly lamented the "shortcomings" of the en primeur "game".

The financial argument against en primeur is roughly that "us poor drinkers shouldn't be forced to tie up our money so far in advance of taking delivery of the wine". As wine journalist Stephen Brook puts it, en primeur is a system "designed to transfer large amounts of cash from your pocket into the pockets of wealthy Bordeaux proprietors and merchants at the earliest possible moment". I don't actually think this cuts the mustard as a reason to get rid of en primeur. Any valuable commodity in short supply will give rise to a futures market. Like it or loathe it, the majority of buyers of top flight Bordeaux are primarily investors, not drinkers. The fact that it is not possible to predict exactly how good a bottled wine will be from a barrel sample is simply another variable to take into account if you want to dabble in an investment that is per se something of a lottery.

Economics aside, I believe there is a much better argument against en primeur in Berrouet's observation that wines now have to be "as seductive as possible far earlier, to the detriment of the Bordeaux style". If the crucial tasting moment becomes the moment of purchase, i.e. the time when the barrel samples are tasted by buyers, winemakers may feel pressure to create younger developing wines aimed to drink well at the moment of en primeur purchase (when they should still be in malolactic fermentation) rather than the ultimate moment of drinking. If this were the case, it would be a sad development for the world's top wines.

I am not qualified enough to know whether or not this trend is in fact yet the case but if it is, what can be done to modify the en primeur system? Presumably some sort of regulatory intervention would be required, either by the French government or at EU level. It is hard to imagine such intervention suceeding on economic grounds - as we have seen, there is no real consumer protection issue at stake and futures markets already exist for almost every conceivable commodity. Intervention would have to come from the wine/agricultural authorities and the case would have to be made on the basis of preserving the quality of the wine, for example by imposing minimum timetables for development of a wine before it can be offered for sale and requiring transparency of volumes produced and offered for sale.

We live in capitalist times and we do to an extent have to accept that. If there are people out there prepared to pay £3,000 for a bottle of wine then - at least in financial terms - that is what it is worth. However, regulatory powers can and should be used to safeguard quality, which, after all, should be the main concern of wine drinkers the world over.

Sources: O. Styles, Decanter

Info Mine - Pétrus

The Wine Mine Blagging Toolkit - 5 wine nuggets with which to impress your friends...

1. Pétrus is a red wine made principally from the Merlot grape in the Pomerol appelation in Bordeaux.

2. The vines on the Pétrus estate are only replanted after they reach 70 years of age. The grapes are hand-harvested only in the afternoon, once the morning dew has evaporated, to avoid absolutely any dilution of the grape juice.

3. Demand for Pétrus far outstrips supply. UK agents Corney & Barrow rigourously control primary allocations on the basis of how much dosh customers have spent in the previous year. Secondary market trading then tends to see prices shoot through the roof - for a bottle of the 2005 vintage today don't expect much change out of £3,000.

4. Photographic records are now kept of every bottle stored at the 11.4 hectare property to combat the growing phenomenon of wine fraud.

5. The company refused to allow the makers of cult wine film Sideways to use Pétrus as the wine which protagonist Miles can never find a special enough occasion to drink. Bah pourquoi?

Info Mine - Phylloxera

The Wine Mine Blagging Toolkit - 5 wine nuggets with which to impress your friends...

1. Phylloxera is a louse which feeds on the roots of grapevines.

2. In the late 19th century, Phylloxera destroyed the majority of Europe's vineyards, hitting France especially hard.

3. North American grapevine roots are tolerant of Phylloxera, whereas European roots are not.

4. The best way to evade the ills of Phylloxera is therefore to "graft" North American rootstock onto your vine (i.e. physically stick the roots and the upper part of the vine together).

5. The only countries in the world not to have been affected by Phylloxera are Cyprus and Chile - both of which are geographically isolated (the former is obviously an island and the latter is hemmed in by the Andes, the Pacific and the Atacama desert).

Quality or Quantity: The Chilean Dilemma

A current hot topic is whether Chile is finally getting rid of its boring image as a source of cheap and cheerful wine which, whilst it serves a purpose and hits a price point, does not exactly set the palate racing. Obviously as wine drinkers we would like to see some new and exciting stuff coming from Chile. But I wonder if it really makes sense for Chile to move away from what it does best, i.e. off-trade targeted value-for-money varietals.

It is generally agreed that Chile has been slowly but surely emerging from the doldrums over the past decade and that it now has the potential to be far more than a cheap source of reliable plonk. When I first visited Chile in 1997, the nascent export market was almost entirely dominated by the three big players (Concha y Toro, San Pedro and Santa Rita) and the vast majority of the wines exported were straightforward Bordeaux varietal gluggers.

Quality - develop regionality and introduce premium varieties

A strong image is a prerequisite in order to break into the premium wine arena - think Argentinian Malbec, South African Pinotage, Barossa Valley Shiraz. Chile's image is currently badly defined (indeed, it has been said that more than a problem of bad image, Chile has no image). Its Andean neighbour Argentina, on the other hand, didn't export for many years during the era of dollar equivalency and high export tarifs and so was able to develop "behind the scenes" and present a fully-formed wine industry to the world once the impediments to exports were reduced.

Nonetheless, if Chile gets its act together with the right PR and marketing, it certainly has the ability to establish itself in due course as a producer of premium wines. The keys to this will be increased regionality and more imaginative planting and blending. The emergence of Carmenere as a "signature" premium varietal (a la Malbec) will also be interesting to watch, although Chile should probably not pin all its hopes on it. New up and coming areas include Elqui and Limari for Syrah (see 31 July post below) and Bio Bio for Pinot Noir and aromatics such as Riesling and Gewurztraminer. The main advantage of the south of the country is the cool climate and Pacific fog, although levels of rainfall can be rather high. Jancis Robinson has commented on the lack of fruit concentration in Chile's southern whites, but the vines are still young and if this remains a problem in future years winemakers will have the option to reduce yields (and so increase concentration in the remaining grapes). Importantly, vineyard sites remain relatively cheap in the sparsely populated south.

Quantity - stick to the popular grapes and sell, sell, sell!

The bigger companies in the more established areas are pursuing a different tack by going after the mass market. Concha y Toro and Viña Ventisquero, both based in the Central Valley, have recently thrown down the gauntlet to Italian producers by introducing Pinot Grigio. Casablanca could offer excellent growing conditions for the fashionable grape. Whereas Italy is incredibly reliant on Pinot Grigio, Chile's breadth of wines would allow its larger wineries to take on the Italians without exposing themselves unduly. There are synergies with their existing portfolios too - buyers of Concha y Toro's Sunrise brand are also likely to be in the market for some gluggable Pinot Grigio and will probably be more concerned about its drinkability than its country of origin.

Chile's export volumes are growing. According to market research company Nielsen, it has now overtaken Spain to become the sixth biggest importer to the UK. It is predicted to overtake South Africa by the end of 2008, and is breathing down the neck of Italy. The comparison with South Africa highlights the million dollar question for Chile. Both countries export similar quantities of wine to the UK, but whereas Chile has a strong off-trade offering, largely built around Bordeaux varietals, South Africa also includes the premium end of the market in its portfolio. Should Chile try to compete in this premium arena or stick to pursuing volume by offering discounts to the off-trade? Daniel Hart, senior New World buyer at Enotria, acknowledges that this is a "tough choice in tough market conditions", but notes that if Chile decides to pursue volume in the off-trade market, it could do so at the expense of its drive for regional and premium recognition.

So...

The fundamentals of Chile's wine industry (infrastructure, economy, training) are all in place. The big companies are getting better and better at pursuing volume. Quality winemaking is developing in interesting new directions and the wine map is being stretched both north and south. The greatest impediment to the premium market is image: if Chile wants to play the premium wine game, it will need a combination of the right marketing (both by individual wineries and national trade bodies) and a shift in focus by the big producers towards the upper end of the market. As far as the second of these goes, the need for profitability in the big players may prove to be the sticking-point. What may well develop over the coming decade is a two tier system of big producers of cheap table wine and smaller wineries targeting the premium market. Which is workable in theory but doesn't make solving the image problem any easier.

Sources: (1) Edmundo Bordeau and Gonzalo Vargas, "Prospects for the Fine Wine industry: Competitiveness and development for Chile 2010"; (2) Jancis Robinson, "Hot Spots for Chile's Vineyards"; (3) Mark Lewis, "Chile pins hopes on Pinot Grigio"

The Mondavi Legacy

Three months after the death of "legend", "colossus" and "father of Napa" Robert Mondavi seems a good time for an impartial sift through the eulogies. What did he actually change and is the world of wine a better place for his influence?

The received wisdom is that Mondavi opened the world's eyes to non-European wine by playing an instrumental role in California's emergence as the first serious New World wine region.

The grandson of Italian farmers, Mondavi was the driving presence behind the Robert Mondavi Corporation until well into his 90s (to the frustration of his sons, who left their positions as vice-chairman and winemaker partly due to the overbearing presence of the old man).

The historic 1976 "Judgement of Paris" consisted of a blind tasting in Paris of French and Californian wines by nine French judges, in which the majority of the top prizes went to Californian wines. None of Mondavi's wines won their categories but those of two of his disciples did. Californian wine was on the map.

Mondavi's first landmark achievement was the development in 1978 of Opus One, still in production today, with Baron Philippe de Rothschild. The Robert Mondavi Corporation's initial public offering in 1993 was a disaster and was costly both financially and to Mondavi's credibility. Joint ventures with Errazuriz in Chile and Rosemount in Australia as well as a longtime presence in Italy raised Mondavi's profile. Constellation Brands' acquisition of the Robert Mondavi Corporation in 2004 secured Constellation's place as the biggest wine company in the world (ahead of California's Gallo) but caused further family frictions and was seen by Mondavi as an undignified end to the autonomous company he had nurtured since 1966.

An interesting tension can be seen between the Mondavi style of winemaking and the tastes of omnipotent wine critic Robert Parker. Parker duly praised Mondavi after the latter's death as having had "the single greatest influence" on U.S. quality wine (although for many that epitaph will be reserved for Parker himself). Parker's and Mondavi's approach to wine was fundamentally different however, the Parker preference being big, alcoholic wines. Recurring words of praise in Parker's publication The Advocate are "opulent", "complex", "muscular", "harmonious", "expansive" and "full-bodied". By contrast, the Mondavi style of winemaking is more understated, to the extent that Parker has criticised its wines as "increasingly light and to my way of thinking, indifferent, innocuous wines that err on the side of intellectual vapidness" (Can a wine be intellectually vapid?! Discuss...)

While the lasting Mondavi legacy may be his role in the emergence of Californian wine in the 70s, he played an equally valuable role in providing a Californian alternative to the prosaic Parker Points-driven wines which have sadly become today's norm. Whether this role will be preserved under the Constellation banner is doubtful but only time will tell.

London in the Organic Age

I thought it would be interesting to look at some of the factors affecting London wine merchants in the context of today's market.

Let's (briefly) start with economic factors. The words "credit crunch" are never out of the media at the moment. What practical effect, if any, has this Phrase of Doom had on the London on- and off-trades? The press would have us believe that no one is eating out these days, painting a bleak picture of families huddled behind closed curtains, washing their dinners of bread and cheese down with nothing so extravagant as wine. At least from where I am sitting, this is not borne out at all. At the merest hint of sun, the restaurant and cafe tables in the central London street where I work are filled to capacity with lunchtime covers from the nearby offices.


which is the true picture?



On the other hand, the strength of the euro against the pound does appear to be having an impact. We saw record price rises in French, Spanish and Italian wines this year (on the back of a particularly punitive budget, which is another story). The effect of this on the shop floor is that customers who would instinctively have headed for the old world sections are now venturing towards the likes of Chile, Argentina and South Africa.

The increasing health-consciousness of the UK means that people are drinking significantly less than in yesteryear (as Giles Coren's recent programme on the gastronomic debauchery of the 1970s showed brilliantly). However, we are also becoming more selective; the increasing education of the wine-drinking masses is being translated into pennies and pounds as decreased volume consumption but an increased average spend per bottle. Out with generic oaked Aussie Chardonnay, in with the boutique wineries of Otago and Priorat.

Which brings me neatly onto the organic wine phenomenon. Although the wine variant of this lags considerably behind the Whole Foods revolution, it has already given rise to some interesting anomalies. Witness the new Hoxton "eco" restaurant Watermark which says it will give preference to organic wine - fair enough - but that it will not consider any non-European wines on "carbon footprint" grounds, a frankly risible attempt to jump on the fuzzy green bandwagon. If Watermark et al actually looked at the detail of wine shipping, they would find that sourcing wine from a landlocked part of Europe such as Rioja entails a lot of to-ing and fro-ing by lorries, which have much less capacity and therefore pollute far more than one (large) sea cargo vessel from say Nelson (coastal New Zealand), which in many cases can deliver almost to the front door of a bonded warehouse in east London.

So in a nutshell, notwithstanding a mild battering by duty rises and exchange rates, the London wine trade in 2008 is struggling on, reluctantly passing on price rises to the consumer and doing its best to be proactive and keep up with the increasing sophistication of the public (even when such sophistication does occasionally sacrifice common sense in the interests of trend-setting).

Wallaby and Condor - Southern Hemisphere Syrah

A touchstone southern hempishere debate is currently being played out between Chilean Syrah and Australian Shiraz. There has been of late - or so the Chileans would have us believe - a consumer trend away from big, powerful Aussie Shiraz a la Barossa Valley, towards “cool-climate” Syrah of the sort currently found in the Chilean Central Valley and emerging in one or two other promising pockets of the long thin country. If such a shift in the consumer palate is indeed on the cards, Chile is currently looking like the most serious pretender to Australia's new world Syrah crown.

All of which could make very good marketing sense for Chile, which is currently trailing Andean neighbour Argentina by a country mile in the premium wine game. Argentinean Malbec is simply more of a selling point than the Chilean alternative - Carmenere - which is currently the only credibly unique Chilean offering. Were Chile to establish itself as a new world source of quality cool-climate Syrah, some of this lost ground could be recovered.

In terms of regions, the north of Chile seems to have the most favourable combination of sun and breeze. To describe areas such as the Elqui Valley (pictured below) and Limari as cool-climate may seem counter-intuitive, being as they are on the fringes of the Atacama desert, but the cooling sea mist rolls in off the Pacific and tempers the heat. Elqui, which lies just inland from La Serena, one of Chile's most popular seaside resorts and also a functioning port, is the traditional Chilean growing area for pisco, the national grape spirit, and has so far largely been overlooked by wine producers. The combination of climate, relative cheapness of land (compared to more established regions such as Maipo and Colchagua) and access to transport could prove a winning formula.

Corporate relations between Chile and Australia appear to be cordial. Witness the recent joint distribution agreement between the UK arm of De Bortoli and Chilean producer Undurraga. Both outfits are long-standing family companies. Undurraga had not previously found a place in the UK market, which made it stand out among Chilean wineries of its size. With its route to the UK market now secured, it will be interesting to watch the development of Undurraga over here and see if the De Bortoli agreement sows the seeds of further southern hempishere couplings.

Whatever the business synergies, just as our palates were wooed away from the Rhone valley by muscular Barossa Shiraz, we may now be seeing a shift back towards a more refined Syrah style. The Next Big Thing in the Syrah story may well be happening in northern Chile. Watch this space...