Category:Wine news

More wackiness in the three-tier system

by Wine Curmudgeon Posted On

Manufacturer-wholesaler lawsuit shows just how Kafkaesque the whole thing is

Portrait of Franz Kafka
“A producer suing a wholesaler? Not even I would have thought of that.”

The three-tier system, the set of rules regulating how wine is sold in the U.S., has always taken the term Kafkaesque and turned it on its head. Which is saying something, given what Kafkaesque means.

But one recent development is even more Kafkaesque than that.

The second biggest wholesaler in the country and one of the most important spirits manufacturers are locked in a lawsuit, the details of which defy explanation.

On the one hand, the producer, New Orleans’ Sazerac, says the wholesaler, RNDC, is trying to cheat it and is acting illegally. On the other, Texas’ RNDC says Sazerac is trying to cheat it and is acting illegally.

Cue Shakespeare.

Which is weird enough, given that lawsuits like this are rare if only because Sazerac is suing one of the few companies that can legally sell its products in the U.S. But it’s even more rare, as this report notes, because it shows “the acrimonious and unusually public feud between Sazerac and RNDC.”

The entire piece, though difficult to get through (even for those of us who understand what’s going on), is worth reading. The venom and vitriol are mind-boggling; RNDC claims Sazerac is trying to destroy the three-tier system, while Sazerca says RNDC is trying to put it out of business.

The one question that the story doesn’t discuss: Why is Sazerac doing this? Typically, the courts have ruled that the wholesaler is always right, given that its role in the alcohol business is protected by the Constitution. So it almost certainly can’t win.

Perhaps it expects to settle and get most of what it wants, on the theory that RNDC doesn’t want its business practices outlined in open court. There’s precedent for this, though not in booze. Art Buchwald’s 1990s lawsuit against Paramount over who wrote “Coming to America” was supposed to detail Hollywood’s biggest scam: The “net profits’ fraud, that no movie ever makes money. But Buchwald settled before that happened.

Or, perhaps, as three-tier opponent Tom Wark always hopes, Sazerac is trying to strike a blow against three-tier and sees this – as some do – as the opportune time. We, too, can only hope.

Picture: “File:Portrait of a Man sitting (Franz Kafka), Léon Weissberg.jpg” by Lydie Lachenal is licensed under CC BY-SA 4.0.

Winebits 792: Ingredient labels, Wine Industry Insight, Cellar Tracker

by Wine Curmudgeon Posted On

wine nutrition fact box
A $17 wine? Of course there’s room on the back label.

This week’s wine news: Producer finds way for to put nutrition facts on $17 wine, plus Wine Industry Insight is sold, and Cellar Tracker celebrates 10 million tasting notes

• The price is right: Opici Wines & Spirits is making a big deal out of the ingredient labels on its new “healthy” wines: The “label clearly states the calories, macronutrient breakdowns, and ABV per serving size so consumers have complete transparency when choosing their wine.” Shocking news yes, given that many in the wine business continue to insist that labels aren’t necessary and won’t fit on the bottle. The catch? These are $17 wines, as Opici hops on the premiumization bandwagon. And, because the WC is a cranky ex-newspaper reporter: How transparent can anything be when it uses a term like “macronutiret breakdowns,” which no one understands?

• Sale: Wine Industry Insight and its News Fetch wine news service has been sold. Lew Perdue, who started the site 14 years ago (and who has been a friend of the blog for almost that long) sold it to wine industry professional Kevin Merritt (who has even made wine). Perdue says he will focus on his other projects, and he has enough of them that he makes the WC look lazy. Wine Industry Insight is practically indispensable to those of us who want to keep track about what’s going on on the business side, but don’t want to wade through a bunch of sites a day.

• Cellar Tracker: The WC often takes umbrage at Cellar Tracker’s tasting notes, those written by the people who also use the blog’s unofficial wine inventory app. A crummy score for my beloved Tariquet? Shudder. But, having said that, it’s a pleasure to see that the app’s owners announced that its users recently posted the site’s 10 millionth tasting note. The notes, even though they sometimes downgrade cheap wine just because it’s cheap, are one of the last places where wine rating isn’t about the Winestream Media. So, yes, a good thing.

Winebits 791: Premiumization, Sherry-Lehmann, Prosecco

by Wine Curmudgeon Posted On

pushing shopping cart
“Where’s the Prosecco?”

This week’s wine news: Chile’s Concha y Toro wants to go upscale, plus legendary wine retailer Sherry-Lehmann has more problems and Prosecco sales climb

• Posh wine? The Financial Times looks at Chile’s Concha y Toro, best known for this $7 wine, and its plans to sell wine costing as much as 10 times more. The story is an intriguing look at how premiumization works from a producer perspective, as well as how the English write about wine. How about the terms posh and upmarket, as well as a football reference?

• More Sherry-Lehmann woes: The New York Post, continuing its relentless reporting of the famed New York retailer, says that Con Edison, the city’s electric company, gave “gave staff a ‘thirty minute warning’ to gather their personal belongings before the power was shut off over unpaid bills” late last month. The power wasn’t turned off after part of the bill was paid, the paper says, but many employees have not been paid since the end of February. This is the latest in the struggles at the 88-year-old wine shop, one of the best in the world. Among the other problems: a $2.7 million state tax bill that hans’t been paid.

• Popping Prosecco: Much of the wine business may be ailing, but Prosecco — the Italian sparkling wine — isn’t, and that includes the U.S. Shanken News Daily reports that shipments to the U.S. grew six percent last year, making this country the largest Prosecco market in the world – even bigger than its native Italy. Not surprisingly, the biggest brand in the U.S. is E&J Gallo’s La Marca, It grew 11 percent, selling some 3 million cases. That’s more than one-quarter of all U.S. Prosecco sales.

SVB collapse: What’s next for the wine business?

by Wine Curmudgeon Posted On

People waiting in line outside SVB
It’s wait and see whether — and how — the SVB failure affects the wine business.

Uncertainty in the short term – and probably even more uncertainty after that

The Silicon Valley Bank failure on Friday sent shock waves through the wine industry – not just because a powerful bank collapsed, but because the bank played such a prominent role in the wine business, both as a lender and for its annual SVB wine report,

I’ve spend the past three days talking and emailing a couple of dozen people to try and to make sense of what happened; how a bank that was more or less healthy one week could be taken over by state and federal regulators the next. I wrote a trade piece you can find here. What’s below are my thoughts after a weekend of reporting:

• How painful to the wine industry? It depends on the size of the bank’s wine loan portfolio and what kind of shape it’s in. SVB’s demise was triggered by its tech business, and several people suggested it may not have been as important a wine lender as Bank of the West, Wells Fargo, or several farm-specialized lenders.

• That means we won’t know what the failure will do to wine country land values, as well as grape and bulk wine prices, until the FDIC sorts everything out. Lots of bad loans may force down land and grape prices, though land values have been remarkably resilient. Even the 2008 crisis didn’t send them slumping.

• Several people told me that SVB was well-known for its aggressive banking practices, and, as a state-chartered bank, didn’t have quite as strict regulations as a federally-chartered bank. In fact, it faced similar — though not as serious — troubles in 1992, during the S&L crisis, when banks folded around the country (it lost $2.2 million), and in 2008, when it got $235 million from the Treasury (though it paid all that back).

• Reynolds told me he hopes the wine industry report finds a new home, calling it perhaps the best in the wine business. Rob McMillan, the report’s author and the head of the wine division, wrote on his blog on Saturday that its future is problematic, given the cost of producing the report, the legal questions about who owns the data involved, and where he will be working next.

The other thing no one can predict: Whether SVB’s failure will have a ripple effect and more banks will close. I saw first-hand the damage caused by the S&L crisis in the late 1980s and early 1990s; a good friend was working for a bank that folded. No one should want that to happen to wine.

Winebits 790: Winespeak, screwcaps, wine history

by Wine Curmudgeon Posted On

Students study an equation on a chalk board
“You think this is bad? Did you see the tasting notes for that new 98-point wine?”

This week’s wine news: Winespeak isn’t inclusive (shocking, right?), plus another call for screwcaps and wine may be older than we think

• Not inclusive? Nat Sellers, writing in Wine-Searcher, argues that winespeak isn’t inclusive for a new generation of wine drinkers. Which is all well and good, but overlooks the biggest problem with winespeak. It has never been inclusive, catering mostly to wine geeks and confusing almost anyone else who came into contact with it. Even the simple stuff was baffling: I never did a tasting, wine class or seminar when someone didn’t ask, “If the wine tastes like grapefruit, does that mean there is grapefruit juice in it?” And why was winespeak confusing? Because the wine business wanted it that way – it’s easier to sell product to people who are confused, yes?

• Bring on the screwcaps: The Robb Report, whose audience would never be mistaken for mine, doesn’t mince words: “Why It’s Time for Fine Wine to Ditch the Cork and Embrace Screw Caps.” Excuse the WC if he does a double take; the wines in the piece cost three figures, and bear no resemblance to my beloved Gascon whites and $10 roses. That a magazine catering to the uber-wealthy is advocating for screwcaps like I do is another sign that it’s time for the cork to go.

• New theory: It has been accepted historical fact that grape cultivation and winemaking started in what is modern day Georgia in Eurasia  some 6,000 to 8,000 years ago. Now, new research has found that wine may be even older than that, originating in the Near East as well as the Caucasus about 3,000 years before then. In fact, says the study, published in Science, the origin of wine in Western Europe is associated with cross-fertilization between native wild grapes and domesticated grapes originating from the Near East that were initially used as food sources. If this is true, and the study makes a good case, will change the way archeologists look at how wine influenced the growth of civilization.

Photo: “Students study an equation on a chalk board” by simpleinsomnia is licensed under CC BY 2.0.

Rose season 2023 preview

by Wine Curmudgeon Posted On

woman with wine glass
“Yes! Maybe more rose for rose season.”

This year’s rose supply still may be slightly foozled, but prices could be stable – so, all in all, not entirely bad news

The pink wine supply situation as we approach the 2023 rose season may be better than it has been the last couple of years. Prices, if nothing else, should be more or less what they were last year. The catch? That even though the shipping situation is much improved over the past couple of years, producers in Europe and the U.S. are still having difficulty finding bottles, closures, and even labels, thanks to entirely different supply chain problems.

“It’s always a wild card with importing,” says Andrew Stover of Siema Wines & Vino50 Selections, a long-time friend of the blog. “It’s getting the stock, and getting it in a timely manner that is the issue.”

The catch this year, after talking to a variety of retailers, producers, and importers, is glass for bottles. The war in Ukraine and its squeeze on Europe’s energy supply has raised prices for glass there and in the U.S., not only making bottles more expensive but harder to find. This may limit the supply of rose, since there won’t be enough bottles for all of it.

Says Stover: “Last year we saw 2021 roses coming in May, and usually it’s March. And so far this year, none of our imported 2022 roses are here yet. Maybe April.”

And prices? Probably more or less stable after a variety of increases last year. On the one hand, there is still lots and lots of rose on store shelves from the past couple of vintages, even though demand for rose is one of the few bright spots for wine sales in the U.S. For example, a host of retailers are still selling 2019 and 2020 roses; this includes the 2020 Campuget, a fine $10 pink that would have almost certainly have sold out in years past.

I’ll update this post if the situation changes. Until then, know that the blog’s 16th annual rose previews – featuring lots and lots of roses that most of us can afford to buy – will post on May 25.

Winebits 788: Blood alcohol, trading down, wine thefts

by Wine Curmudgeon Posted On

family eating dinner
“No. no, no — no wine with dinner.”

This week’s wine news: Washington state wants to criminalize wine with dinner, plus restaurant diners are trading down and wine thieves strike again

• Two glasses is too many: The Washington state legislation will consider a bill to cut the state’s legal blood alcohol limit from .08 to .05. The change, following a similar bill in Utah, pretty much makes anyone who drinks a couple of glasses of wine with dinner legally drunk. The bill will also cut limits for marijuana and other drugs. We’ve discussed this subject on the blog many times before, and there is no easy way to parse the argument. Yes, we want to cut drunk driving deaths. But will cutting the limit do it? The results from Utah are inconclusive. And do we want to criminalize what is otherwise legal behavior? Reporter Renee Diaz does a fine job of outlining just that conundrum.

• Cheaper restaurants: Consumers are opting for less expensive restaurants, says a new report, and that’s not good news for the wine business. Consumers “have begun trading down, nonetheless – illustrating they have some simmering anxiety about what is happening or what’s to come. At least, that’s the gist from the first two weeks of public restaurant earnings calls – a solid indicator of consumer confidence given the industry’s ubiquity and discretionary position.” The downside is twofold for wine: first, even though we’re still eating out, we’ve switched to less expensive restaurants and which don’t necessarily serve wine; and second, that if we’re not eating at wine restaurants, how will that sector recover from the pandemic?

• More wine thefts: The Wine Spectator notes that wine thieves have been busy in Europe over the past several months, hitting cellars of wine-focused restaurants in Norway and Spain, as well as at retailer-grower in Austria. The magazine says there is no evidence the crimes are related, but that the thieves knew what they wanted. The stolen wines included some of the greatest names in the business, such as Harlan, Haut-Brion, Lafite Rothschild, Latour, Margaux, Mouton-Rothschild, Pétrus, Pingus, Sine Qua Non, Solaia and Yquem. All told, the value could have exceeded a quarter of a million dollars.