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GP10Dec03: Adventures in the Wine Trade: Chez Noir
Cafe des Artistes. Quite by accident, we find
ourselves immersed in pinot noirs lately. A month ago we dined at Cafe des
In any event, our Persian waiter asked us if we would not like a glass of wine with our entré. We said, “Why not?” He replied, “Let me pick something for you.” He was such a pleasant fellow that we allowed him to bring us what turned out to be a California Pinot Noir, full and very smooth. It happened to be a Melville.
Ron Melville. We were disappointed that this wine has nothing to do with the expansive Herman Melville, whose Moby Dick mirrored the titanic and often frustrated ambitions of 19th century America. Then destiny was a two-edged sword that made some into heroes but splintered the hopes of many more. But we much enjoyed our conversation last week with the versatile, intense Ron Melville. Ron, who collected California wines as a hobby while becoming a successful broker, diversified into vineyards in the 1980s when he realized with horror that all his net worth was bound up in the stock market and that what goes up can come down—in one day. After some growing experiments in Northern California, he found a big enough patch in the Santa Rita Hills near Lompoc and Santa Barbara in the late 1990s.
Today Melville Vineyard (www.melvillewinery.com/index2.html) supplies Melville Winery plus seven other vintners. Running two businesses, Ron now works fourteen hours each day, and, it’s clear to us, has little time to enjoy or reflect on the fruits of his labors. That said, he has built a very profitable second business, gets to see his two sons who left the stock market to work in the business, and turns out a very drinkable pinot noir that sells out each year, to the tune of 10,000 cases, apparently. The locals out there in Santa land have also been bragging about his chardonnay
Pinot Noirs Grapes. There are those who claim that, under the right circumstances, they’re simply the best. These grapes go into France’s burgundies, and if you had your choice, you would be drinking the great $100-plus vintages from the other side of the Atlantic, California be damned. It’s also a major grape for perhaps a third of the champagnes. But if you are not to open your wallet for the very dear burgundies or are simply irritated with the French, then you may go selectively for the pinot noirs from California. You must be careful since they have been known to be watery. Somehow we think Burgundies are to Bordeaux as Pinot Noirs are to the more tannic Cabernets, though we have not had this confirmed by John Mortimer’s great wine critic, Rumpole of the Bailey. The better pinot noirs come from cooler climates with good sun, such as Carneros, the Russian River Valley, or the environs of Santa Barbara. Even under the best conditions, American growers complain that growing the pinot is a tricky business, with uncertain results from year to year—so there are dark sides to the pinot noir. We intend to push into Oregon where pinot noir is now the most widely-planted grape and where the wines seem closest to France’s burgundies.
The Wine Critics. It’s not that easy to find out about pinot noirs or anything else in the wine trade, even if wine books and columns have multiplied over the last 20 years. The present generation of wine writers has proven awfully mortal and probably has done more to popularize wine than to improve it. The ultimate chamber of commerce magazine in the wine business, of course, is the Wine Spectator, which probably has never seen a label it could not serenade. Like food and restaurant pundits, art historians, and many other cultural analysts, the wine journalists often substitute adjectives for meaning, decorating their columns with terms such as “silky,” “complex,” “fruity,” “meaty,” “hints of tobacco,” etc. One longtime wineosseur on a leading newspaper was, in fact, a hopeless alcoholic, imbibing so much that he could hardly taste anything and was hard put to grind out his column. Our most renowned critic, Robert Parker of Monkton, Maryland, who is a refugee from the legal profession, has had a gigantic effect on the wine business worldwide, as we have previously noted in a January 2003 Global Province letter. His reputation is deserved, yet we now need a new group of more broadly cultivated wine thinkers who celebrate more comprehensively what it takes to create excellence in the wine trade. For sure they would be more immune to sundry mass production scams the big wine houses are now trying to put over on us such as plastic corks or metal cap tops.
Restraint of Trade. If you are a boutique vintner of extra fine pinots, your frustrations, like those of Ahab, will soar beyond the vagaries of the vine or the dullness of the critics.
States have erected barriers to interstate trade in wines that much abridge the interstate commerce provisions of the Constitution in which dominion over business between the states is in the hands of Congress. Ken Starr of Monica Lewinsky and Bill Clinton fame is now taking on restrictive states in federal court, and some have redrawn their statutes. Even so, only a handful (13) truly observe the law and completely open up the gates (see www.wineinstitute.org/shipwine/analysis/intro_analysis.htm), while the rest are fighting various rearguard actions against vintner to consumer sale of wines by phone, the Internet, etc. What this trade restriction has done is to boost prices to consumers, as distributors in renegade states offer a narrow selection of mediocre wines at inflated prices within their fiefdoms. These practices virtually prevent boutique vintners from distributing in some states, since it’s not worth the time nor money for them to deal with the bureaucratic maze and distributor impediments associated with some locales.
A few argue that free trade between the states would only enable the big factory vintners and the mass merchandisers at the expense of quality merchants. But the cows are already out of the barn. Gallo, Walmart, and Costco already dominate America’s wine trade and benefit from a system that squeezes quality purveyors all along the supply chain.
Tip of the Iceberg. If this were simply a War of Wine between the States, we might pass it off as a quaint anachronism that is an occasion for a smile rather than a matter of serious concern.
But it matters greatly. Wine is just the tip of the iceberg. All sorts of barriers to trade between the states flourish like weeds to the detriment of all. Commonly they show up as obnoxious regulations or spurious taxes. Banking, insurance, and utility costs are high in a number of states because various instate lobbyists are able to twist legislators and regulators around their ring fingers and stymie broader competition. These inflated costs have inhibited entrepreneurs. Often enough, capital for worthy start-ups is both scarce and overpriced. We know, too, of one southern state that makes out-of-state teachers meet stiffer requirements to teach in its high schools than its homegrown pedagogues. Brains, in other words, are often barred at the border in order to protect local professionals. Cumulatively these impediments to commerce and interchange have stalled the economies of states which formerly added jobs and industries at a speedy clip, but are slow to adapt to the requirements of a knowledge-driven economy.
The Price of Division. Once upon a time, shrewd local barons used protective laws to keep out-of-state businesses away from their briar patch. Up until 1970 or so, this was of little consequence, only hurting the citizens living under such backward legislation.
But now the U.S. is fully part of a tightly integrated global economy, and such local glitches are felt throughout our nation. To do battle with global competitors, we now need all aspects of our national economy to be in harmony with one another. Berlin Walls on our state borders that prevent the free interchange of ideas and bar better cost structures, higher quality products, or a more perfect union do harm to us in the global marketplace. In the 19th century, the nation used canals and railroads to weave together a national market. Now commerce runs along information highways and supply chains that only flourish in the right regulatory climate. It should be far easier to get Ron Melville’s Pinot Noir anywhere in the United States than a Malbec from the Argentine. And it’s not.
Quality and Innovation. Invariably, in any field of endeavor, higher quality and the most interesting innovation come from one-man bands rather than symphonies. Standard, humdrum products and services of almost any kind can now be sourced outside the United States today and delivered tomorrow, so domestic firms need to create product experiences Shanghai can’t deliver. One must ask whether we can better encourage our lonesome doves, creative producers with a quality edge, giving ourselves some sort of edge in the global quest for growth and revenues. For that to happen, we require an internal market that is vastly more sympathetic to one-of-a-kinds (or at least mass customization) than mass production.
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