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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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