Tag Archives: winery values

Winebits 668: Fake wine, winery values, money-back guarantee

fake wineThis week’s wine news: Italian police bust up a fake wine ring, plus bad news for high-end winery profits and Hardys money-back wine guarantee

• Phony Sassicaia: Italian police seized almost 350 cases of fakes of one of Italy’s most famous wines, which can cost as much as $400 a bottle. Operation Bad Tuscan, reports Manchester’s Guardian newspaper, uncovered a ring that used cheap wine from Sicily to counterfeit Bolgheri Sassicaia, what the story called a “prestigious Super Tuscan wine.” The wine included fakes from the highly-praised 2010 and 2015 vintages. The wines, sold for two-thirds less than their usual price, were destined for Russia, Korea, and China. So far, 11 people have been arrested. Italy’s wine cops have been busy this year: They raided Sicily’s Feudo Arancio winery as part of a Mafia investigation into money laundering.

• No profit here: The Seeking Alpha financial website details just how difficult it is to make money in the wine business, even – and especially – if the company makes high end wine. Analyst Ian Bezek is frank about Crimson Wine Group, whose brands include $100-plus producers Pine Ridge and Archery Summit: “Simply put, if a company like Crimson can only earn 26 cents a share in the best of times, and outright loses money during industry downturns, the stock isn’t worth a whole lot on a P/E basis.” That an analyst outside the wine business has noticed what’s going on with wine speaks volumes about the problems the industry faces, and that hopefully the industry will address.

• Money-back guarantee: The Australians know how to sell wine: Hardys is offering its Aussie, British, and Irish customers a 100-percent refund if they don’t like the Hardys wine they bought. This is a brilliant idea, which is why (assuming it’s legal in the U.S.) we won’t see it in this country. The guarantee includes all the brand’s wines, from the US$80 Eileen Hardy Shiraz to the US$10 Nottage Hill label. Why brilliant? Because the biggest obstacle most consumers face with trying something new is that they don’t want to waste money on something they aren’t sure about. This promotion eliminates that uncertainty.

Winebits 609: Winery values, rose, Indiana wine

winery valuesThis week’s wine news: Have winery values, once seemingly exempt from the laws economics, started to decline? Plus, rose as a lifestyle and Indiana’s Oliver winery.

• Declining values? Have California winery values, which seemed to be exempt from the laws of economics, started to decline? Silicon Valley Bank’s Rob McMillan thinks so, citing the changing economics around the wine business. “The short answer to the headline question for today is there are still plenty of buyers but overall they are being a little more selective, and your winery and vineyard are probably not worth more than they were last year,” he writes. “Without going into details on a long topic, we are presently oversupplied on grapes and bulk wine from most regions, and the upside to higher sales is for today more limited than the past. …” If McMillan is correct, and he usually is, then the situation is markedly different from almost anything in the past three decades. Napa Valley land prices, for example, didn’t lose value during the recession, even though the rest of the country saw land prices drop by double digits. There’s a lot of math and financial-speak in the post, but the sense is that we’re in a world no one expected to see.

• Rose as a way of life: Who knew that rose instilled a wine culture in the U.S.? That’s the gist of this Forbes blog post, which otherwise seems like a plug for rose from the French region of Provence. Which is not surprising, since the Provence rose trade group has one of wine world’s best marketing programs. It’s a also a plug for high-end rose, including one that costs $190 a bottle. Its producer describes it as “gastronomic rose” — no doubt to differentiate it from the $10 plonk the rest of us drink.

• Only in Indiana: Regional wine scores another victory with the Mainstream Media in this feature about Indiana’s Oliver Winery, “the largest winery in the Midwest, it’s perhaps the largest winery east of the Mississippi – or, at least one of the largest – and it’s the 44th largest winery in the United States.” The Wine Curmudgeon is always happy to see regional wine in the news, showing once again how far ahead of the curve we were with Drink Local Wine.

Photo: “vineyards” by mal.entropy is licensed under CC BY-NC-SA 2.0