Category:Wine news

Winebits 669: Halloween wine, expensive wine, intellectual property

halloween wine

“Trick or wine?”

This week’s wine news: Dress up like a box of wine for Halloween. Plus, Eric Asimov on why we can’t afford the world’s great wines and intellectual property rights vs. the First Amendment.

The right costume? Want to be a box of wine for Halloween? A Detroit radio station reports that Franzia is making that possible. “The Francia boxed wine costume is only $25 and comes in two flavors, Chillable Red and Sunset Blush.” There is also a wine backpack, so you can drink wine while you look like it. No word on how many points the costume gets, though I wouldn’t be surprised if someone, somewhere, gave it a score.

No great wine for us: The New York Times’ Eric Asimov rants about one of the Wine Curmudgeon’s favorite topics: The ridiculous prices of the world’s great wines. “Among the many ways the rich are different from you and me: Only they can afford grand cru Burgundy. That wasn’t always the case. … For example, back in 1994, a bottle of Comte Georges de Vogüé Musigny 1991, a grand cru, retailed for $80 (the equivalent of $141 in 2020, accounting for inflation). Today, that bottle costs about $800.” The piece is well worth reading, and speaks to a post I’m working on for next week about the absurdity — and even obscenity — of expensive wine prices.

Nuts to the First Amendment: Because, of course, there’s money involved. The Libation Law Blog reports that “Beer, wine, and liquor trade groups are coming out of the woodwork” to support an appeal by Jack Daniels whiskey against a parody dog toy called Bad Spaniels, which looks like the Daniels bottle. Their support comes despite long entrenched and well-established First Amendment protection for parody, satire, and the like that made it possible for me to write this. Or this. Or this. But in the second decade of the 21st century, getting rich trumps all. Sadly, this is not the first time we’ve seen the wine business throw its weight around, spouting intellectual property. So nuts to you, beer, wine, and liquor trade groups. I’m going to look for one of these for Churro, the blog’s associate editor. Then he can write a post about playing with it.

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.

New study says we’ll be eating – and drinking – more at home, even after the pandemic ends

restaurant wine

USA Today reports that 2.3 million restaurant jobs have been lost during the pandemic.

As many as one in four say they anticipate forgoing restaurants – and restaurant wine – in the future

A Florida consultancy predicts that restaurant spending could fall by as much as one-half by the time the pandemic ends. Even more surprising, says its study: Consumers seem content to cook and eat at home. If true, this has tremendous implications for the wine business.

That’s because about 40 percent wine sold in the U.S., measured by dollar sales, is sold in restaurants. So if that market goes away, there’s going to be even more wine glutting the market – and there’s already a glut.

And if that happens, we could be looking at lower prices but also more winery failures – and especially on the high end, since that’s where much restaurant wine comes from. This might also lead to more winery consolidation, which means less consumer choice. The biggest wineries have the deepest pockets, and will be better able to survive a massive glut.

The results come from Florida-based Acosta, in a study called “COVID-19: Reinventing How America Eats.” It described what seem to be massive shifts in consumer eating habits: 44 percent report eating breakfast at home daily, compared with 33 percent pre-COVID. Similarly, 31 percent are eating lunch at home every day versus 18 percent pre-COVID, and one-third are eating dinner at home daily versus 21 percent pre-COVID. All of those people eating at home, says Acosta, translates into 31 to 50 percent less spending at midscale, casual and fine dining restaurants.

Don’t panic yet

But let’s look at the caveats:

• Acosta didn’t respond to a couple of requests for an interview. The study is based on “online surveys of Acosta’s proprietary shopper community” in early July, as well as industry data and “proprietary information sources.” Proprietary means the company doesn’t discuss how the survey works, which means it’s OK to be skeptical about the results. We know how Nielsen measures sales; we don’t know how Acosta divines its results.

• On the other hand, Acogta’s pessimism about the future of the restaurant business dovetails with most of the gloom and doom prognosticated elsewhere. USA Today reported in early October that 2.3 million restaurant jobs have been lost during the pandemic, while 12 percent of sit-down restaurant chain units that were open before COVID-19 had closed.

• The 40 percent restaurant wine sales number is misleading, since it’s measured in dollar terms. Given that restaurant wines tend to be more expensive, and that restaurant markups inflate that total, the amount of wine sold in restaurants in actual bottles is probably much less than 40 percent of the U.S. total. Hence, the loss of the restaurant market wouldn’t be quite as devastating, and it would also be mitigated by people buing less expensive wine at the supermarket.

• Some of the results in the survey require a second look. For example, “35 percent of consumers said they’ve discovered a new passion for cooking amid the pandemic.” Which is all well and good, but does it actually mean anything? And one-fifth to one-quarter of the respondents say they anticipate eating out less in the future, which is understandable in July but may not mean much next spring.

So, yes, more not good news for the restaurant and wine businesses. But maybe, given all the bad news we’ve had, not quite as bad as it seems.

Winebits 667: Wine calories, three-tier brouhaha, can shortage

wine caloriesThis week’s wine news: The federal government resets the rules to list calories on wine labels. Plus, more three-tier legal excitement in Michigan and the can shortage continues

How many calories? The federal agency that oversees alcohol regulation is making it easier to put calorie numbers on wine labels and to use them in advertising and marketing. The TTB will change its calorie standards to make them more consistent with those of the federal Food and Drug Administration, which regulates calorie and nutrition labels for most of the food we eat. The new alcohol standards will allow greater flexibility for producers who want to use voluntary nutritional statements. For example, wineries won’t need to do a nutritional analysis for each new vintage; they can use the current analysis unless there are major changes in the wine. How big a deal is this? The Wine America trade group, which has long opposed mandatory nutritional labeling, has endorsed the TTB move. So we might see more calorie and nutrition labels on wine – always a good thing.

Slugging it out in Michigan: The state of Michigan is suing out-of-state retailers for selling wine in the state, in violation of Michigan law. The state has some of the strictest three-tier regulations in the country, which include laws letting the state tell retailers what they can charge for wine, beer, and spirits. This follows a similar Ohio lawsuit this summer against out-of-state retailers, marking an escalation in the legal battle to reform the three-tier system to make it easier to buy alcohol. Michigan officials aren’t buying that, claiming in the suit that the two California retailers selling wine in Michigan harm the “the health, safety and welfare of Michiganders.”

Where are the cans? Remember the pandemic-induced can shortage? It hasn’t gone away, reports the Washington Post. “Ball Corporation, the world’s largest manufacturer of cans, told investors this week that the U.S. market alone is short 10 billion cans in 2020. …” Which doesn’t bode well in the short term for canned wine, one of the biggest trends in wine, as well as hard seltzer and craft beer. The story says the largest beer and soft drink producers saw the shortage coming and stocked up. But smaller producers are struggling; one Maryland brewery says it has run out of cans every week since the end of July.

Winebits 666: Wine ads, wine country fires, expensive wine

wine ads

“Come on. know sex sells wine.. even if it doesn’t.”

This week’s wine news: Wine ads are missing the point by emphasizing sex. Plus, a wine country fire update and expensive wine foolishness

Sex doesn’t sell: A new study, published in the academic journal Sex Roles, casts doubt on whether sex actually sells products. This result should be especially important for wine marketers, who rely on sex almost as often as they do snobbery to sell wine. The Italian study found that women were less likely to find a product attractive and were less likely to purchase it if the product used sexual female models than if the ad was neutral. Men, even more surprisingly, were unaffected by ads’ sexualization. Said the authors: “The present study has practical implications for marketers because it suggests that ‘sex does not sell.’ In addition, considering both the psychological damage and practical inefficacy of sexualized ads, our findings have important implications for public policy.”

Scorched vines: The Wine Spectator does a fine job recapping this fall’s California wine country wild fires, “More than 200 wineries are in evacuation zones. A few vintners have managed to return to their properties to assess damage in recent days. But evacuation orders remain in place for much of the area, keeping many out.” I did a Napa radio show a couple of weeks ago, and it looked like the worst of the fire season was over. But then the Glass Fire sprang up last week.

Betting on wine: We’ve written several times about the Kafka-esque reality of Liv-Ex, a stock exchange for the world’s most expensive wines. I mention it again to show one should drink wine instead of investing in it. A smart investor, according to the Liv-Ex article, would have seen a 20 percent return in a decade by investing in specific Robert Parker-favorited wines. Wow — two percent a year? Can’t I get that with a bank CD and then drink the wine?

Is a wine tariff solution on the horizon?

wine tariffReuters reports possible path to compromise in wine tariff trade war

Oct. 14 update: Reuters is reporting that the European Union has been given permission to impose $4 billion worth of tariffs on U.S. goods as part of the aircraft parts subsidy trade dispute.

Says the news service: “However, negotiators on both sides say it could also lead at last to discussions to resolve a 16-year legal battle over subsidies to aircraft manufacturers Boeing and Airbus. … Both the United States and the EU have signaled interest in settling the dispute over plane maker subsidies, while accusing the other of refusing to talk seriously.”

So, perhaps, we do have reason to be cautiously optimistic.

Oct 5: Could bourbon be the key to upending the Trump Administration’s 25 percent wine tariff?

That’s a distinct possibility after a Reuters report last week that said the European Union is considering retaliatory tariffs on U.S. wine and whiskey. The U.S. sends very little wine to Europe; in fact, U.S. wine exports overall are trivial, only about 10 percent of what we produce each year. But we sell a lot of bourbon and Tennessee whiskey to the EU, which accounted for more than half of all American whiskey exports in 2019. In this, it’s U.S. whiskey’s biggest overseas market.

There is already a 25 percent tariff on U.S. whiskey in the EU, dating to a 2018 Trump Administration tariff on European steel and aluminum. Reuters reported that the World Trade Organization will announce this month that the EU can levy another tariff on whiskey and a new tariff on wine as part of the on-going aircraft parts trade dispute that gave us the original 25 percent wine tariff.

(And if you’re confused reading this, given that wine and whiskey are being taxed in disputes about airplanes, steel, and aluminum, think how irritating this is for me. I have to write the same stupid sentences over and over to explain this foolishness.)

In other words, a compromise is more possible than ever. That’s because a hike in the whiskey tariff would devastate the business, already reeling from the first tariff and the pandemic. By one account, U.S. whiskey sales to the EU have fallen by one-third in the past 18 months. Faced with that possibility, says the Reuters story, the EU and the U.S. have more reason than ever to end the trade war. This ties into developments a couple of weeks ago, when Airbus — which got the illegal subsidies that started this mess — apologized and offered to pay the money back.

Plus, given Reuters’ track record record in covering the wine tariff, when it writes that the EU may be more concerned with ending the trade war than with upping the ante, there’s reason to be cautiously optimistic.

Reports the news service: “ ‘Everybody’s been waiting for this. It sets the stage for a negotiation,’ said William Reinsch, a former senior U.S. Commerce Department official and trade expert at the Council on Strategic and International Studies.”

Having said that, there have been stories in the European and U.S. financial media over the past couple of weeks implying just the opposite. There was one especially depressing story in Britain’s Financial Times saying there was almost no hope, and that the trade disagreements were too deeply rooted in mutual animosity for compromise.

Which is too bleak a prospect even for someone as cranky as I am.

$10 Hall of Fame wine Falesco Vitiano cuts distribution in the U.S.

falesco vitiano

No, no, no… . not the Falesco Vitiano.

More bad news for cheap wine: Only the Falesco Vitiano red will be generally available

Italy’s Falesco Vitiano, one of the great cheap wines in the world, has cut its U.S. distribution. Only the red will be generally available; the white is being sold ”by special order” and the rose will no longer be sold in the U.S., according to a spokesman for the importer.

This is a shocking blow to those of us who care about cheap wine. The Vitiano has been in the $10 Hall of Fame since its inception, and the brand won the best cheap wine poll in 2013. Each wine is everything great cheap wine should be – in fact, what great wine at any price should be. That means varietally correct, terroir-driven, and interesting.

The winery didn’t respond to an email asking about the cuts. Reportedly, the brand was still selling some 200,000 cases a year, although not all of that was in the U.S. The spokesman for the importer, Winebow, e-mailed me that “the rosso (red) has been the driver of the Vitiano line.” Which, to the rest of us, seems to mean that the importer and producer didn’t think the white and rose sold enough to make it worth their trouble.

This is yet another blow to anyone who loves wine, but doesn’t want to pay $15 or $20 for focus group plonk aimed at aging baby boomers. The Cotarella brothers, whose family-owned company makes Vitiano, are winemaking legends. One of the great moments in my wine writing career came in 2008, when I interviewed Riccardo Cotarella and we talked about the need for great cheap wine.

One other thing to know: The current vintages are older than usual – the red is 2016 (and there seems to be a lot of 2015 available, too), and the white is 2018. I drank the 2016 red the other night, and it was still enjoyable, though starting to fray around the edges. I haven’t tasted the white since the 2015 vintage, which I had in 2016. I haven’t seen the white or rose in stores since, and now I know why.