? Barely any growth: U.S. wine sales continued to plateau in 2015, reports Impact Databank — up just .02 percent for the year based on the number of cases, following a 1 percent gain in 2014. The rest of the news is even worse, says the report: The “estimated volume increase represents the smallest rise in [22 years]. And after steadily increasing from 1994-2011, per-capita wine consumption is projected to decline for the fourth consecutive year, as Americans bypass wine in favor of spirits, RTDs and cider.” RTD is an industry term for ready to drink, like flavored beers and spirits. The Wine Curmudgeon, noting the wine industry’s obsession with raising prices and trading up over the past couple of years, isn’t surprised. What’s the most basic rule of economics? If prices increase, demand decreases. But which, obviously, seems to be OK with the wine business.
? No cold beer in Indiana: An early candidate for the 2016 three-tier Curmudgie is the federal appeals court that ruled that Indiana is allowed to forbid grocery and convenience stores from selling cold beer while allowing liquor stores to do so. The Indianapolis Star said that the 7th U.S. Circuit Court of Appeals said there were legitimate differences between selling beer in a liquor store and selling it in a grocery and convenience stores, a point of law which I’m sure I would understand if I were a lawyer. As a wine writer, it’s baffling, and only points to the foolishness of three-tier.
? Big Wine winespeak: The Wine Curmudgeon enjoys noting the public utterances of those in the wine business, particularly when they demonstrate how little so many of them seem to care about wine quality. Because what does quality have to do with profit? The most recent comes from the woman who runs Treasury Wine Estates’ operations in the Americas, in which she used “masstige” twice, said that a marketing deal with the Texas Rangers baseball team would help sell New Zealand sauvignon blanc, and explained why young men will buy wine if it has a convict on the label. Is it any wonder I get so cranky so easily?
? Nevermore! What happens when the state booze cops arrest alcohol vendors at a food and wine event? The event gets canceled, and no one is quite sure what happened. That was the case at one of Sacramento’s most popular festivals, when the 2015 event was canceled after the 2014 arrests. Organizers said wine and beer vendors didn’t want to participate this year, given the threat of arrest. Why were the vendors arrested in 2014? Something to do with what are called tied-house laws, which regulate the relationship between alcohol producers and alcohol retailers and are integral to three-tier. The story is fuzzy about exactly what happened, but tied house enforcement can be capricious and over stupid things — even something as simple as a retailer using a producer logo that he or she got from the producer, and not through the distributor.
? Not just for wine writers: The knock against the push for lower alcohol wines is that it is being powered by elitist wine critics (overlooking the fact that the most elitist of us started the high alcohol thing). The latter insist that consumers either don’t care or like high alcohol wines. Hence the welcome that Australian researchers, working with Treasury Wine Estates and a leading British retailer, are trying to develop lower alcohol wines that consumers will like. Said one researcher: “We would love to produce a wine with zero percent alcohol that tastes like 15 percent, but even if we get a quarter of the way, that would be good. Ten percent or 5 percent is also desirable.”
? Alternative Prosecco: Apparently, there is a Prosecco shortage, though the Wine Curmudgeon has a difficult time believing this when he sees row after row of Prosecco, the Italian sparkling wine, on grocery store shelves. In which case, several leading Prosecco producers will make Prosecco-style wines from other countries, showing just how un-wine the wine business has become in its quest to confuse us to make money. One of the brands, called Provetto, is from Spain, and sounds about as tasty as its name implies. It will also sell for about the same as a quality bottle of cava, the Spanish sparkling wine, which raises all sorts of questions that would make me too cranky if I answered them.
? Ontario does its duty: The Canadian province has made major changes in the way it sells beer, wine, and spirits, something that seemed hard to believe in a province with the Canadian equivalent of state stores. Nevertheless, liquor reform has come, and it will soon be possible to buy beer in a grocery store, buy wine online, and sleect from more interesting win in the province. And pricing will become more consumer friendly, with provincial officials vowing to negotiate better deals with producers. “The days of monopoly are done,” said Premier Kathleen Wynne. Which raises the question: If Ontario can do this, and it has been called one of the last bastions of Prohibition, why do we have such trouble reforming liquor laws in the U.S.?
? Even in Texas: Sort of, anyway. The Texas Legislature is discussing whether to allow Walmart, Costco, Kroger and other publicly-held companies to open liquor stores in the state. Currently, only privately-held companies can get a license to do that, and there is even a provision in the law that forbids people who aren’t related from owning more than five stores. The Lege, as the late Molly Ivins so fondly called it, probably won’t change the law this session, but there is momentum to allow grocery stores to own liquor stores and it could happen sooner rather than later. Why they need to own liquor stores, rather than selling liquor in their existing stores, is a story for another time.
? But probably not in Pennsylvania: The blog has covered liquor reform in Pennsylvania almost since its inception, and nothing ever seems to happen. That has not stopped liquor stores in Delaware, which borders Pennsylvania, from holding panicked meetings to demand reform in Delaware in case Pennsylvania actually changes its state store system. The Wine Curmudgeon has some advice for Delaware: “Chill, dude.” The day Pennsylvania gets rid of state stores is the the day I write an homage to 15 percent chardonnay.
“Hey, kids. Why don’t you try some wine with your smokes?”
Most wine blogs can’t participate in Google’s AdSense network, perhaps the leading on-line ad service. That’s because, as I found out when I applied, we violate its terms of service: “We did not approve your application for the reasons listed below. Issues: Drugs, drug paraphernalia, alcohol, beer or tobacco. … Please remove all drug-related content from your site, then resubmit your application.”
That we’re doing nothing illegal and that we don’t have any drug-related content to remove seems like just another of those wonderful, Google-esque ways the search giant does business: Buying companies to close them, discontinuing popular services, or agreeing with the Chinese government that Internet censorship isn’t such a bad thing.
But Google’s decision to ban wine blogs from AdSense goes deeper than that, speaking to the contradictions inherent in wine and alcohol 80 years after Prohibition, thanks to the NeoDrys, fear of underage drinking, and the three-tier system. Google doesn’t object to wine, as near as I can tell. It just doesn’t want to be responsible for someone buying it who might break the law, because that could lead to nasty publicity, lawsuits, and the besmirching of its good name. More, after the jump:
The wine business in 2014 won’t be so much about varietal or sweet, though both will matter. Rather, wine trends in 2014 will be about the continuing transformation of wine into a truly global business, focusing on:
? Increased retail availability — more wines in more and different kinds of stores, and especially grocery stores. This means attempts to change state laws where that’s illegal
? More consolidation among producers — not just the biggest getting bigger, the trend over the past decade, but consolidation among mid-sized wineries, which will be folded into companies specificially formed for that purpose.
? The growing importance of the consumer, who is beginning to drink what he or she wants and forcing the wine business to adjust, rather than the other way around.
Mixed in with this will be renewed attempts by the neo-Probhibitionists in goverment and medicine to reduce wine consumption. More, after the jump:
? Another view of terroir? Terroir, a French term that has no exact meaning in English, is something wine geeks love to argue about ? does it exist or not? Those of us who believe in terroir believe it lends a sense of place to the best wine, regardless of price. Anti-terroir advocates (yes, just like matter and anti-matter) say we ?re a bunch of old farts and that wine should be made to taste the best it can, regardless of terroir. The eminent Paul Lukacs offers a third view ? that, despite some truth, it ?s mostly a myth perpetuated by French marketers in the first third of the 20th century. That should give us something to discuss the next time Paul and I judge together.
? Another victory for the distributors: It ?s depressing, but someone has to keep track of this stuff. The Illinois legislature, no doubt acting at the behest of some of its biggest campaign contributors, has passed a law that strengthens the state ?s three-tier system. Three-tier are the alcohol regulations left over from Prohibition that prohibit consumers from buying wine almost anywhere but traditional retailers. The legislature passed the law because Anheuser-Busch bought a stake in its biggest Chicago-area distributor. The beer giant will now have to sell its share of the distributor. How silly is this? Like Ford being told by the Michigan legislature that it can ?t own one of its parts suppliers.
? For sale or not? The cyber-ether has been buzzing the past week or so with rumors that Wine.com, the largest Internet wine retailer and a friend of the blog, is for sale. Wine.com ?s boss has denied the rumors, saying the reports exaggerate the company ?s financial woes. Supposedly, Wine.com ?s private equity backer was unhappy with its performance and wanted out. Regular visitors here know the uphill battle legal Internet retailers face, thanks to three-tier, and Wine.com is no exception. It has to become a local retailer in many states in which it does business to comply with state laws, a costly and time-consuming effort. If its financial backers are unhappy, the question is not that they are, but why they expected anything else given the regulatory environment.
? The three-tier system strikes again: How minor a role do on-line sales play in the U.S. wine marketplace? Pretty minor, according to a new French study. One in four Chinese wine sales use the Internet, while as many as one in 10 in Europe are done on-line. In the U.S.? Just two percent, and in one of the more masterly of recent understatements, the study ?s author cited ?legislative constraints ? as the reason. In other words, it ?s mostly illegal in this country, thanks to three-tier and the system that has evolved in the U.S. since the end of Prohibition.
? The Federal Reserve and wine sales: This post, from Silicon Valley Bank ?s Rob McMillan, explains (in English, too!) what ?s going to happen to wine sales now that the Federal Reserve is going to do less to stimulate the economy. The technical term is quantitative easing, and since we ?re going to see less of it, McMillan predicts a stronger U.S. dollar and higher lending costs for wineries who want to expand or make acquisitions. The former is good news for the consumer, since it should lower the cost of imports and keep wine cheap. It may also be bad news for high-end producers, who have higher costs of production and need higher prices to stay in business. And that interest rates will go up probably isn ?t good news for them, either. This post shows why McMillan is one of the really smart people in the wine business, and he deserves to win the Wine Blogging Award for best industry/business blog next year.
? Beware the hype: Steve McIntosh at Winethropology warns us that many of the lower prices we ?re seeing these days have very little do with wine quality and a lot to do with retailers and distributors getting rid of wine that is ?occupying precious warehouse space ? not all of which is worth your hard-earned money – at any price. ? He says he fell for the hype and bought two bottles recently, One of which is nothing more than ?a watered down version of wine. ?