Friday, September 26, 2014

Why Tesco's woes are raising a cheer in Germany



A small - or possibly fairly sizeable - bomb may be about to explode in the heart of UK retailing. In the wake of the revelation that Tesco, the country's biggest grocer, had overstated its latest profit warning by a cool £250m and the reported suspension of several of its top executives, there is a strong likelihood that the company may have to face some very tough questioning. And so may some of its competitors.

Adrian Bailey, Chair of the UK parliamentary Business Committee has been quoted - in International Business Timesas saying that "We may well as a committee want to look at this. Not just at Tesco but at what is going on in the retail industry and in the relationship with the suppliers to see if the issues we came across two years ago are still there."

According to 2012 House of Commons documents "In April 2008 the Competition Commission completed an enquiry of the UK grocery market, following long-running concerns that the four major chains exploited their market power to put undue pressure on suppliers and to compete unfairly with smaller retailers. Although, in the Commission’s view, the country’s supermarkets were delivering a ‘good deal for consumers’, it concluded “the transfer of excessive risk and unexpected costs by grocery retailers to their suppliers through various supply chain practices if unchecked will have an adverse effect on investment and innovation in the supply chain, and ultimately on consumers. 


There are very few wine suppliers who would say that Britain's supermarkets no longer apply 'undue pressure' on the companies with whom they deal. Indeed most freely admit that they would greatly prefer to sell to the German discounters 
Aldi and Lidl, than their UK counterparts. As one said to me recently "The discounters drive a hard bargain but you know precisely where you are with them. They buy what they say they are going to buy, for the price they agree to pay".

Consumers also increasingly appreciate the way the discounters do business. Lidl is seeing annual growth of 18% in the UK, while at Aldi, the figure is 30%. Tesco, by contrast, is slipping backwards at a rate of 4.5%

Most analysis of the differences between the discounters and the established UK retailers have reasonably focused on the former chains' smaller outlets, more limited ranges and service levels - and lower margins. What few have mentioned is the fundamental philosophical gap between working practices of the two groups. The discounters, despite their size, are little different from any corner shop or market trader: they buy stuff and then sell what they have bought. Compare this with the model now applied by Britain's biggest supermarket chains - including the middle class darling Waitrose, and you might be looking at two sets of political parties, so wide is the difference between them. Coopbury, Asdrose and Morisco et al rely for part - often a big part - of their income on a wide range of payments that have little or nothing to do with the simple business of buying and selling. Some of these payments are more voluntary than others.

It was to handle the involuntary ones that a Grocery Code was established last year, along with a Grocery Code Adjudicator (CCA) in order, in the words of Farmer's Weekly magazine, 'to tackle unfair supermarket buying practices'. According to a July 2014 report in that same publication, last June's  GCA annual conference revealed that "80% of suppliers had experienced an issue with a retailer, but only 23% would consider giving evidence. Fear of retailer retribution prevented 58% of respondents from raising issues, while 40% worried the GCA would be unable to do anything."

Where the GCA has been involved, it has actually proved to be effective. Tesco apparently 'retracted requests for shelf-positioning payments' after evidence was brought to the GCA, while 'The Co-operative stopped asking suppliers to “compensate” it under joint business agreements' after the adjudicator was informed. Uncovering these practices was not easy, however. It apparently involved 'forensic auditing (retailers trawling communications to find ways to claim money from suppliers)'. Following the recent revelations, it seems fair to imagine that Tesco is about to be the target of rather a lot more forensic auditing.

Successful GCA-mediated cases are rare because, as Graham Ruddick wrote in yesterday's Daily Telegraph, "Many suppliers are too scared to speak out against a larger retailer for fear of being delisted or replaced by a rival, so they suffer in silence and agree to the unreasonable demands being placed on them."

Ruddick lists a set of recent instances that serve as an indictment of the way retailing in general is conducted in the UK, and the regularity with which retailers renegociate deals they have already agreed. In 2013, "Debenhams demanded a one-off fee - a rebate - from suppliers worth 2.5pc of its outstanding payments and said it would apply a 2.5pc discount to orders it had already agreed with suppliers" while, general retailers Argos and houseware specialists Homebase "applied a 2pc rebate to future orders". John Lewis, parent to Waitrose and every Briton's model retailer, "told suppliers last year they would be subject to a rebate of up to 5.25pc on annual sales". In May, motoring accessory retailer Halfords sought to fund a £100m turnaround plan with help from one-off payments by its suppliers amounting to up to 10% of the cost of their annual sales to the retailer. In another Farmers Weekly article, readers are warned against retailers tracking their - the farmers' - profits and using them as a basis for rebate demands they want to levy. In another context, this would sound very like the kind of protection racket operated by the Mafia.

The law has a way of dealing with gangs who threaten businesses with violence as a means of exacting cash, but it also sanctions businesses who abuse their employees. A boss can't simply demand that his workers hand over a percentage of their agreed wage in return for a - still uncertain - measure of job security.

Whether or not the world's wine suppliers will ultimately benefit from the fallout from the Great Tesco Profit Warning Scandal of 2014 remains to be seen, but I'll bet that a couple of German retailers are already raising a glass or two of celebratory good-but-very-inexpensive Sekt.








Friday, August 29, 2014

Drinking the Kool Aid


Every so often, somebody gives me a phrase I really can't let go of. UK-born PR person, Louise Hurren, who earns most of her living by helping small Languedoc producers gain some kind of visibility outside their region, did precisely that when she used the expression "I guess I must have drunk the Kool Aid, because I felt utterly enthused about – well, everything" in a nice recent blog post. She was writing about the seventh annual wine bloggers conference in California, and it was the combination of wine bloggers and Kool Aid that really worked for me. For those who have forgotten, or who are too young to recall, Wikipedia helpfully offers this reminder that: 

"Drinking the Kool-Aid" is a figure of speech commonly used in the United States that refers to a person or group holding an unquestioned belief, argument, or philosophy without critical examination... The phrase derives from the November 1978 Jonestown deaths, where members of the Peoples Temple, who were followers of the Reverend Jim Jones committed suicide by drinking a mixture of a powdered soft drink flavoring agent laced with cyanide.

What a perfect description, I thought, of so many wine bloggers and, indeed, other wine writers and enthusiasts: people who have become so enthused about wine in general, or a particular region or style - and quite especially 'natural' wine - that any critical faculties they may ever have possessed, seem to have been totally nullified. 

Almost every wine region covered in Decanter magazine (and most other similar publications) is described in such glowing, uncritical terms that I regularly have to check that I'm not reading a piece of advertorial, paid for by the area concerned.  'Natural' winemakers like Frank Cornlissen, self-taught producer of some pricy but ludicrously faulty wines, are written about indulgently by bloggers who would struggle to find a single positive word to say about a popular commercial brand. 

On one side of the fence, the cork-supporting Kool Aid drinkers applaud the improvement in the quality of natural closures and see no real cause for concern that at least one bottle in every eight or nine cases of £40-per-bottle Burgundy is still spoiled by TCA (and a lot more are randomly oxidised). And on the other, the screwcap gang refuse to understand why the world hasn't seen the logic of their argument and rushed to seal Chateau Margaux with the same closure as San Pelegrino.

Among some of other most obvious cases of Kool Aid consumption are the authors of articles and books about wine and health with titles like "Why Wine is Good For Your Heart" that present a laughably one-sided and fundamentally misleading argument. (For anyone who's interested, wine really is good for us - but only in annoyingly meagre doses of less than a glass per day).

Of course, the Kool Aid drinkers - and some more balanced wine lovers - regularly accuse me of being a one man ice bucket challenge, a glass-half-empty type who's always more than ready to find fault. And I plead guilty as charged: the more fawning the courtiers the greater the need for the monarch to have his jester.


Sackbuts and Sauvignons - why ancient isn't enough


What kind of music do you most enjoy listening to? Do bagpipes, sackbuts and recorders feature heavily? Do you drink much mead? Do you wear wooden clogs? A few of my multitude of readers across the globe may have a positive answer to at least one of these questions, but only a few. A somewhat larger number - including the keenest classical music enthusiasts - may, like me, have recordings of Bach, Mozart or Beethoven by musicians playing 'original' instruments, but I'll bet that most are, again like me, quite happy to hear the Goldberg Variations sound the way it does when performed on a piano rather than a harpsichord.

And how about grapes and wine styles? Do you drink a lot of Uva di Troia, Lemnió or Rkatsateli? These are all interesting ancient grape varieties that can and do produce attractive wines. Whether any of them has the crowd-pleasing appeal of Chardonnay, Merlot, Cabernet Sauvignon, Pinot Noir and Pinot Grigio, is another matter. 

So what? You may cry. It doesn't have to be every grape's or wine's vocation to please crowds. Indeed a failure to do so can be very appealing: how many of us have a favourite coffee bar around the corner from the far busier Starbucks? But these are personal opinions, and we should pause before expecting others to share them - especially when their livelihood is at stake.

Every year, hordes of wine 'experts' - aka journalists and bloggers - fly into old wine regions such as Turkey and Georgia and gush over almost everything they see. "Thank God", they cry, "that your vineyards have been unsullied by internationally popular varieties such as Chardonnay and Cabernet Sauvignon... We just love the fact that we can't even pronounce the names of the grapes you use, let alone spell them... As for your amphora... Well you should make all of your wine in them; it's your point of difference after all... And under nocircumstances plant any of those pesky international grapes!"

And then they fly home. Some, I'm sure, settle down to a daily glass or two of ÖküzgözüBoğazkere or Rkatsateli, but most will have moved on - and back - to the Rhônes, Burgundies, Bordeaux and Spanish and Italian reds and whites they were drinking before their flight to Ankara or Tbilisi. It was my Meininger's Wine Business International colleague, Felicity Carter, who first drew my attention to this kind of condescending inverted-colonialism, after finding herself among just such a group of visitors to Georgia. 

As she said, hearing some of her fellow travellers' comments, was rather like listening to visitors to primitive parts of Africa enthusing over the cleverness of the primitive people's sanitary arrangements and the absence of mobile phones. Yes, there is something interesting about anything that has survived over the centuries, from a type of pie to the language historically spoken by the inhabitants of a particular region. And, yes, it would be a pity to see the pie or language disappear completely. But do most of us actually regularly want to eat that particular culinary delicacy or learn to converse in Welsh? I doubt it. And how well could the Welsh survive if none of them spoke any other languages?

Telling a Turkish wine producer that he shouldn't use internationally popular grape varieties is rather like telling the owner of an Ankara gelateria that she shouldn't serve vanilla or chocolate ice cream. When I last flew through Ataturk Airport in Istanbul, roughly half of the Turkish wines on sale in the Duty Free shop were produced exclusively, or partly from non-indigenous grapes. People with time to spend before or between flights, similarly had the choice between a traditional Turkishtantuni,or a chicken or meat döner, or a Burger King Whopper or a Basilico pizza. I don't believe that the people who run that airport are part of an international conspiracy to promote globalisation; they're giving their customers - Turkish or foreign - what they like. Just as Turkish Airlines is doing when it offers its passengers a glass of Turkish Syrah.

The nice people responsible for promoting the wines of Turkey, Georgia or wherever did not, by the same token, spend large sums of money flying in all those experts simply in order to hear them saying complimentary things about the way their winemakers go about producing their wines. They want to sell those wines overseas. No, I'd correct that. They need to sell those wines overseas, and in some quantities. And anyone who suggests that there are lots of consumers in London or Lower Manhattan who are just itching to lay their hands on some Rkatsateli or Öküzgözü is lying - if only to themselves.

Most humans, like most other animals, are creatures of habit. We return to the same places on holiday and the same favourite restaurants, and we buy the same foods and wines: the ones we like, and find easy to buy. It's no accident that vanilla and chocolate ice cream are so popular across the globe, nor that consumers from Manchester to Moscow happily queue to buy Big Macs and drink Starbucks coffee. This is not to say that Rkatsateli or Öküzgözü - under more pronouncable names, most probably - won't ever find a substantial following outside their own markets. But it won't happen by itself, or because a few bloggers and wine writers think it ought to, simply on account of their ancient heritage and 'different-ness'. Or not until most of us somehow discover the delight of wearing clogs and listening to sackbuts.

Sunday, August 24, 2014

Why oh why no WiFi?- an open letter to hotels across the globe

Cartoon from blog.rottenwifi.com. Rottenwifi is an apparently useful
app I discovered after writing this post.

Dear hoteliers,
I know from my own experience of trying to run an office and home that maintaining a WiFi - or indeed any internet - service that works reliably, consistently and at a good speed isn't easy. And I understand the challenges of offering WiFi to unpredictable and potentially large numbers of people.

I grew up in a hotel and well remember breakfast being the hardest meal of the day to deliver satisfactorily, with lots of grumpy, stressed and possibly hungover people expecting precisely the cooked breakfast they have requested (eggs boiled for 4.5 minutes) to be delivered to their rooms at precisely the same time. But good hoteliers understand the breakfast problem and come pretty close to overcoming it.

The parallel with WiFi is quite close. While some of the people who want to go online are tourists casually wanting to check their Facebook, or to browse the lists of local restaurants to decide where to dine tonight, others - principally but far from exclusively business travellers - will have urgent emails to receive and send, Skype calls to make, boarding cards to download... And there's a high chance that they'll be as stressed and grumpy as the man calling reception from room 207 to complain about his overcooked poached eggs.

Of course, a growing number of business travellers and wealthier and/or more organised tourists now rely on global internet roaming services for their smartphones and tablets, but dear hoteliers, these aren't - yet - the mass of your customers. Some of you charge guests an hourly or daily rate to go online; some offer the service for nothing. In my experience, the old notion of getting what you pay for does not necessarily apply here. I seem to have paid for rotten - often non-existent - WiFi almost as often as I've been given it for nothing. But, and here's my point: some hoteliers do seem to have got their WiFi to work as well as their breakfasts.

Unreliable  WiFi is, to a hotel, not unlike faulty natural corks to a wine producer : something over which one has limited control, but which potentially leaves customers with a memorably unsatisfying experience.

So, dear hoteliers, here's my proposal: test your WiFi on a regular basis and ask your guests how happy they are with the service you provide, and if the response is not what you'd wish, blast your provider and go on blasting them until they get it more or less right.

And, dear winemakers, if you are still using natural corks, for goodness sake, test every single batch you are delivered. You won't spot the ones that will allow your wine to oxidize more quickly than you'd like, but you will find some with noticeable TCA. Revealingly, the producers who maintain that they never have any problems with cork taint tend to be the ones who don't have a rigorous testing regime; what they should be saying is "our customers aren't complaining " which is a very different matter. After all, do you always complain about the annoyingly inefficient WiFi in the hotels where you stay?

******************
Since posting this, and discovering Rotten WiFi, I've coma across this review of the app from earlier this year:

I rather like the idea of naming and shaming places with bad WiFi. But maybe we should launch a RottenWine app too.


Saturday, August 23, 2014

When 15% may not even be enough...

The old vine Mallorcan
wine that helped me
make it through the
night.

What do you do when you are alone in foreign land and you're trying to make sense of the fact that, a few hours earlier, you've watched a coffin containing your mother's body slide into a crematorium furnace?

This, as you may have guessed, isn't a hypothetical question. I'm writing this at 10pm in Palma de Mallorca, the island where  my mother lived for three and a half decades before falling victim to Alzheimer's and a cruelly slow descent into death.

To be honest, my first thought was whisky - good Islay malt most probably - and that's almost certainly what I'd have resorted to if I were at home. But I'm in Mallorca and good malt is less readily available. So, I've walked through the town in search of inspiration and happened upon a cafe-restaurant serving Galician diced beef, pimientos del padron  and a local red - Jose Ferret Veritas Vinyes Velles (old vines) 2010 - that boasts both a Mundus VinI gold medal and 15% alcohol. I was offered the choice of a glass or a bottle. I opted for the latter.

The food is fine - everything you might want from beef and pimientos and when I first tasted it, I could easily see how the wine earned its medal. It's rich, fruity, and nicely supported by oak. Now that I'm three quarters of the way through the bottle, I'm not so sure. There's a sweetness I could do without and the oak is a little showy. But - and this is an important 'but' - the thing I'm really appreciating about this rich, fruity red is the alcohol.

To be honest, I'm not 100% convinced by the 15% on the label. The actual strength might actually be a tad higher. But, in the mood I'm in tonight, that's not something I'm going to worry about. (Don't forget that this Mallorcan red is performing as understudy for an absent 40% malt whisky).

The point of this post as I'm still unfortunately sufficiently sober to appreciate, is that even those of us who love wine (and whisky) sometimes drink it for reasons that are not directly related to subtlety and complexity. Would I be happier, sitting here  tonight in a Palma restaurant, with a 13% Rioja? I very much doubt it.

To be blunt, whether I knew it or not, what I was looking for when I left my hotel was the slow slide towards oblivion that alcohol can offer more effectively than any other narcotic I've tried. This raises all sorts of questions about alcohol-in-moderation messages that I'm frankly not in the mood to discuss at this precise moment. All I can say, now that the bottle is almost empty and I'm asking for the bill,is that people who cavil at high-strength wine are like the people who cavil at the speeds attainable by Ferarris and Harley Davidson bikes. Sometimes, whether we like to admit it or not, the alcohol is what it's all about.

************************

I did in fact write the above post while sitting at my restaurant table with the bottle in front of me as I drank it. Rereading it now, I think I might change the last line to read "a lot of what it's all about". I do care about what I drink; if alcohol was all I wanted I could simply have lined up and knocked back a few vodkas.I don't actually have a problem with doing that either, but what I appreciated was something that tasted good, and packed the punch I sought. Getting 15% (and stronger) wine right isn't easy, partly because of the apparent sweetness that goes with the territory, but it can be done, and done brilliantly - as the people who dismiss such wines out of hand ignore.. It's worth remembering too that getting lower-strength wine isn't simple either, especially as temperatures rise; I've had plenty of horribly unbalanced 12% wines.

Saturday, August 09, 2014

Who really made money out of Rudy Kurniawan's fake wine?



... A key question for many fine wine collectors now is where the rest of Kurniawan's fakes are lurking.
Some information may yet emerge from billionaire collector Bill Koch, who bought many wines off Kurniawan. The Indonesian has agreed to pay Koch $3m in damages and tell 'everything he knows' as part of an out-of-court litigation settlement.
There are fears the pyschological damage caused to fine wine buyers will be difficult to reverse, but many of the major auction houses have cautioned that counterfeiting still represents a small part of the market and stringent checks are in place. 
'People have been robbed of the joy that is old and rare wines,' said Maureen Downey, of Chai Consulting and who has inspected Kurniawan wines for several clients, including Koch. 'They simply do not trust the system. That is the real tragedy of this debacle.' 
Just read this extract from this Decanter news item and pause over the bit that I've highlighted. Wealthy fine wine buyers have, it seems, been "psychologically damaged" by paying hundreds of thousands of whatever currency they favour on wine that evidently tasted fine but turned out to have been blended in an illegal immigrant's kitchen.

Pull the other one.

Wine has probably been faked and adulterated since man first started pressing grapes. According to Pliny the Elder, 2,000 years ago, Roman nobles were being efficiently fooled by fake Falernian wine. The ancient author unfortunately refrains from informing us whether the aristos in question rushed off to seek psychological treatment.

I can readily imagine that the elderly people who were duped into investing their life savings into fraudulent wine investment schemes may genuinely be feeling some justified pain, but the billionaires who flocked around Mr Kurniawan and his friends and associates were no more or less badly treated than all of the people who, over the years, have bought and hung forged paintings on their walls.

The scandal of the Rudy Kurniawan case about which rather less fuss is being made, is that most of the $20-30m of wines he is believed to have produced, passed through other sets of hands on their way to the final buyer. Lots of people have taken a margin on those sales. Where is all that money now? How many of those experts are lining up to return their share of the rotten gains?

Friday, August 08, 2014

Knowing what's good for you

For the better part of 25 years of my professional life, I firmly believed that my notion of a 'good' and a less good wine mattered rather a lot. I was bolstered in this belief by newspaper, magazine and book publishers who payed me to express my views on paper, and by the astonishing success of the International Wine Challenge of which I was co-founder and co-chairman.

Admittedly my notion of 'good' did not always coincide with other critics' but that's the nature of criticism after all. The arbiters of taste who failed to share my enthusiasm - or lack of it - for a particular wine were quite simply wrong. As of course were the consumers who were sufficiently deluded to follow their advice. As a Brit, I naturally particularly equated this wrongness with some of the top US critics. How could they possibly like the over-alcoholic, over-oaked, over-priced red  monstrosities to which they regularly awarded points in the high 90s?

Today, my views have changed pretty radically. I still am clear in my mind about a good and a bad wine but I'm far readier to try to understand why others think differently. It's rather like no longer saying about apparently mismatched couples that "I can't imagine what he/she sees in her/him", but trying to understand the attraction. I personally don't choose to spend my money on Starbucks coffee or Big Macs or Krispy Kreme donuts but I can see why so many people do so - in preference to what I might have chosen.

Sometimes it is simply a matter of what they are used to, culturally or socially; we all inherit and adopt tastes. Sometimes the appeal lies in something other than the flavour. I'm writing this in rural France where non-Frenchmen and women who regularly holiday and quite possibly have houses here, attune themselves to happily consume rustic wine they'd complain about if it were offered to them in their own countries. People wanting to embrace 'natural' wine also recalibrate their palates to accept smells and tastes they would previously have rejected. When in Rome...

The brain can also find a reward in consuming something that is said to be 'good' or 'expensive'. I'll bet that many of the less well-off people who apparently relish the occasional opportunity to eat Foie Gras or caviar would not choose to make either a regular part of their diet if they won the lottery. I know of plenty who'll drink Champagne when offered it, but actually prefer Prosecco and, to return to my point about Starbucks, there are those who unashamedly admit to liking Nescafé more than a freshly brewed 'real' coffee.

To the critics, it's all a matter of education. Of teaching the misguided and unsophisticated what they should appreciate. That principle can work very well, of course. Even today, I'm occasionally surprised and heartened by someone saying that their journey into the higher levels of wine enthusiasm was helped at an early stage by something I may have written or said 20 years ago. And those moments reassure me that I wasn't wasting my time - and that the critics writing today aren't wasting theirs either. But I've shifted my perspective.

I still use my knowledge and experience - and personal opinion - of what's good and bad when judging at competitions like the IWC or Mundus Vini, when working with consultancy clients or when benchmarking our Le Grand Noir wines against competitors'. But I'm increasingly intolerant of intolerant critics. I know when I'm right, but I'm far less confident of saying that others are wrong. After all, those Big Californian wines I thought so little of are still selling well at the prices I laughed at, and the critics who praised them still have their audiences. And the art critics who mocked their colleagues for supporting - what they thought to be - meretricious artists like Jeff Koons and Damien Hirst are still waiting for time to prove them right.


Monday, July 21, 2014

The N Word


I love words and the way they can behave differently depending on the context in which they are used. So, if a middle-aged white TV presenter recites an old nursery rhyme that used to contain the N-word, he has to 'beg forgiveness', while a black musician who calls himself 'Handsome Ass Nigga' has attracted over a million followers without creating even a ripple of controversy. 


There's another N-word with a divisive quality of its own. People who make, sell and like to drink wine fermented with wild yeasts and produced with little or no SO2 happily describe it as 'natural' and can see no reason why anyone should object to them doing so. As someone who has been drinking wine for rather a long time and feel as strongly about it as I do about language, I however take offence at the suggestion that the Burgundies, Rhônes, Mosels, Barolos and Aussie Shirazes that I've enjoyed over the years are all, by implication unnatural. 

On the other hand, I relish the way that those who favour the use of 'natural' with reference to wine are so ready to align themselves with some of the cleverest flavour chemists and industrial food manufacturers on the planet. 


When I teasingly raise this issue, some N-word fans happily propose 'authentic' as an alternative. But that doesn't work for me either, because, as far as I'm concerned, there's nothing inauthentic about any of my favourite wines.

The people who choose to use these terms clearly care about language too. None of them have embraced my proposal that a wine made without any additives be called 'primitive'. Apparently, they find the term distasteful and 'negative'. So I'm relieved that they know how I feel.

Anyway, this post is merely to say that I not only vow to continue not to use the N-word that got Mr Clarkson into such trouble; I'm also giving up on the other N-word that - rationally or irrationally - offends me when applied to wine. From now on, I'll happily talk about zero-SO2 and low-SO2 wines, whenever it's appropriate.