Browse Tag

price

Benjamin Wallace on the price of happiness

Benjamin Wallace says some stuff we all should know, but either don’t or sometimes forget.

The counterpoint to this, of course, is as the Stanford study he references suggests: some large portion of the pleasure of a luxury good is the simple act of possession or consumption. This is why the question, which any devoted wine geek is asked with great frequency, “yeah, but is your wine X times better than what I buy at Trader Joe’s?” is only marginally relevant. Often, the wines are better by some identifiable measure of the sort of things that wine geeks value (which is, of course, not the same as saying they’re objectively better), but whether or not they’re enough better to justify the price increase becomes less and less likely as the price escalates into the stratosphere. At that point, the lessons of the Stanford study come into play: the experience and/or the “having” are, of themselves, a measurable value. It’s impossible to separate the two.

Bottles made of sand

[mustang & vines]The current state of the wine business is enough to drive anyone to drink. Consider, for instance, this report from France:

French wine and spirits exports fell by almost a quarter in the first half of 2009…Champagne sales plummeted by 45% in value with Bordeaux declining 24%…Burgundy exports fell 30%

That last number might also be slightly elevated by the ongoing, and as yet not convincingly solved, premature oxidation issue affecting some of the region’s whites, but I suspect the majority of it is a simple matter of (over)supply vs. (under)demand.

In Champagne, however, they have a plan:

With sales falling, producers may be ordered to leave up to half their grapes to wither on the vine in an attempt to squeeze the market. Merchants are pushing for an historic reduction in yield as they seek to ensure that champagne remains an expensive luxury. “Everyone agrees that production has to be cut because no one here wants to see prices fall,” an industry insider said.

I suppose some might be moved to a fair bit of offense at the naked avarice of the folks who make Champagne, but I’m afraid I’m too cynical to be upset at this sort of thing anymore. And it is a good business/marketing decision, given what they sell is no longer wine (more on that in a moment).

But the news isn’t all bad. Referring once more to French wine:

The vin de pays category was less badly affected, while vin de table grew by 1.2%.

This matches what I’ve heard from retailers and restaurateurs: people are still buying alcohol, they’re just spending less when they do. But still, those drops in Champagne, Bordeaux, and Burgundy are dramatic. Aren’t these in-demand luxury products, with a worldwide audience and a steady stream of new buyers?

Yes. Therein lies the problem. Champagne, and to a slightly lesser extent Bordeaux, are not – in the market’s imagination – wines any longer. They’re luxury goods. They’re sold on their names and admired for the same reason, probably more than they’re admired for the contents of the bottles. Don’t believe me? Heed the source:

“Champagne is the drink of dreams and of parties,” [Patrick] Le Brun [chairman of the Syndicat Général des Vignerons de la Champagne] wrote in La Champagne Viticole, the trade magazine. “Its image, its universe are endangered when the term ‘crisis’ is associated too often with it.”

Note the absence of any talk of Champagne’s gustatory qualities. It’s all about the image, the prestige, the “event.”

This is a situation certain regions have engineered themselves. In boom times, it helps their sales, and – especially in Champagne – it neatly separates desirability from quality, making the former rather than the latter the driver of popularity (were that not so, people wouldn’t buy so much mediocre Veuve Clicquot). But as we’re now seeing, there’s a downside. People might remain true to a beloved beverage during hard times. But a status symbol? Those can be replaced, or abandoned, with ease.

On the other hand, not everyone suffers in a downturn:

The South African wine industry could face wine shortages within five years if sales continue to rise at the current rate, a leading South African producer has warned. In 2008, total exports increased 12% to a record 405 million liters but vineyard planting has not kept pace with increasing demand. Merwe Botha, financial director at Distell told decanter.com, “We need to look at the demand and supply situation. There are signs that in the next five years the industry could face shortages in supply. Producers have been under severe pressure because of margin and cash flow problems so they have not planted as much as they should have,” he added.

This was a topic of much angst last year when I visited South Africa. The ten-rand-to-the-dollar exchange rate that made the trip a ridiculous bargain has, for a while now, helped the wines make significant inroads into territory that once belonged to Australia, New Zealand, and California. But the too-cheap prices received by the producers have a significant downside, one that’s been plaguing South American countries as well: the money to plant (or replant, a significant issue facing a good number of South African growers), the money to upgrade facilities, and the money to work the market simply doesn’t materialize, even though the bottles themselves might be flying out the cellar door.

Separate wines, worlds apart

[upended bottle]I just got back from a trip to Norway and Denmark, and other than a fun night with some wine geeks in Bergen, wine was only occasionally on the menu. Not that it wasn’t available. In fact, many of the restaurants at which I dined had wine lists astonishing for their breadth and depth. Unfortunately, there was another astonishing thing about them: price.

The way wine is monopolized and, more importantly, taxed in the Scandinavian countries means that “everyday wine” doesn’t really exist as a category. Sure, the wines that would fit the bill elsewhere are technically available, but at shocking markups. $85 for Trimbach’s yellow-label riesling. $82 for the Hugel “Gentil.” And so forth. Naturally, the weak dollar doesn’t help, but even a strong dollar wouldn’t put much of a dent in these prices, and neither country is exactly cheap to begin with.

There’s a pair of silver linings on the edge of this gilt cloud, however, and one is that more expensive wines are not priced by demand, as they are in most competitive markets. Thus, the $75 Burgundy that shoots up to $300 in the States after a high score from some critic not only stays at its release price (albeit one higher than $75), but isn’t impossible to source, either. (Though there are limits to this; even in the monopoly systems, there are favored customers and “off-list” wines that end up in the hands of a chosen few.) The other is that restaurants seem fairly willing to cellar wines for a time, which means that while a 2005 version of a $20 wine may be a ridiculous $110 on a wine list, the 1990 version of that same wine may be only a few dollars more, making it commensurate – or even a value – compared to a similar wine on an American wine list.

The Bergen winos’ response to all this was to claim, only half-jokingly, that they “can’t afford to drink anything but the best.” I lived there, I’d be forced to do the same; anything else would be economically foolhardy. And it’s not like drinking really good wines is something to be upset about.

But I admit that I would miss the other kind of wine. The kind of everyday, non-intellectualized stuff that has, historically, formed the foundation of traditional wine-drinking cultures. I’m not just talking about the increasingly anecdotal jugs of local Côtes-du-Rhône that lubricated the equally anecdotal French peasantry, but about the wines both artisanal and industrial that form the bulk of what most people buy and drink on a daily basis.

I would miss this sort of wine because a daily glass (or two…or sometimes three) is, for me, a fundamental part of my enjoyment of a meal. Not all food embraces wine, and not all meals allow consumption, but its presence is always to be preferred to its absence.

Perhaps more importantly, I would miss these wines because I firmly believe they put the better bottles in their proper context. Yes, it’s possible to drink only great wines, and I know people outside Norway who do. In fact, I know people who refuse to drink anything other than the best of the best. I can’t fault them for doing so, but this behavior just isn’t for me. Not only do I enjoy the simple pleasures of humble food and wine in their proper context, but I find that I appreciate the qualities of better wine more keenly when those experiences have a broad and deep foundational perspective. The components and interweavings that make great wines great are all the more obvious when the alternatives have been internalized. And those who drink only the superstars can, occasionally, lose perspective on what they drink, fixating on the niggling details but losing sight of the fact that they are quibbling over degrees of greatness.

I don’t know if there’s much impetus to change, as both countries seem to have well-entrenched beer cultures that satisfy the needs of the lower end (and in Denmark, at least, some really extraordinary things are happening with that beer; watch this space, eventually, for information on one of them). But I do know that I was happy to uncork a bottle of something uncomplicated and moderately priced when I returned home. I’d actually drank better wines on the rare occasions I’d imbibed in Scandinavia. But there’s such a thing as comfort wine, you know.