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August 28, 2001—Wine
at C and Winding Down
Red Mountain Gang. In the 1960s, the newspaper that
set the world on fire was the Berkeley Barb, a counterculture affair
published by somebody named Max that kept you up-to-date on protest and
wackiness. As I remember, it was put to bed by the Red Mountain Gang on
Thursday night, so named because the staffers, who sewed the pieces
together, put down liters of Red Mountain wine, which went for $2.50 to
$4.00 a gallon.
That captures the spirit of California wine, past and present. Always
plentiful. And it used to be cheap, though this is not the case any more.
Now it has expensive pretensions to quality, even though we find that it
never rises above the merely average.
Decline of the French. This week's Business Week has a cover
article--"Wine War: How American and Australian Wines are Stomping the
French" (September 3, 20001)--that does a pretty good job of showing how
corporate consolidation outside France and heavy marketing budgets are
overwhelming the French wine industry, which is seeing big erosion in its
market share. The story, of course, is more complicated: there has been some
decline in the quality of many French houses, which have been selling
commodity wine at princely prices. They have been called to account,
incidentally, by Robert Parker.
All the World Gets a C-Plus. What we find is that everything is
compressing towards the middle, a general tendency in product quality and
performance these days. What's happening in wine is symbolic of business at
large. There are very few "As" and "Bs," but also fewer "Ds" and "Fs." Cost
control has pushed quality down, but technology has put a floor under wine
in most nations, generating "Cs" all over the place. The imperative,
therefore, is to pay "C" prices if that is what you are going to get. You
must move away from not only the French but from the Australians and
Americans as well; they're all pricing too high. As in the stock market, you
must hunt and peck a little to find value.
High Tech. A finer article about the wine business appeared in The
New York Times, August 26, 2001. By Alice Feiring, it is titled "For
Better or Worse, Winemakers Go High Tech" (Business Section, p. 4). With oak
chips, microoxygenation, and other such tricks, California wine magnates
have found easier, more predictable ways to produce average wines they can
peddle at inflated prices. Watch out: this is yet another California bubble,
waiting to burst when common sense asserts itself.
Harris Helps. As the industry changes and quality sinks, we will
stick by Mr. Harris and his 20-point wine scale. His chart is available on
the Global Province (www.globalprovince.
com/winechart.htm),
and we recommend you keep it at the ready. He's not recommending plastic
corks or wine enhancement, to the best of our knowledge.
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