Monday, November 26, 2012


For anyone, interested in such things, buyers at Hong Kong auctions in November established the relative value of a bottle of 2005 Domaine de la Romanée-Conti. In fact, at around $18,250 or so, it's worth just over a third of the cost of a Damien Hirst-decorated Fender Stratocaster or a fifty-third of that of a 1930 Leica.

Damien Hirst Fender Stratocaster sold for HK$480,000 ($62,000) on Nov. 25 
at Ravenel International Art Group Hong Kong auction

1930 Leica Luxus I 50mm camera with faux lizard skin body covering. 
sold at Bonhams auction in Hong Kong for HK$7.5m ($967,750)

12 bottles Domaine de la Romanee-Conti 2005 
sold for HK$1.7m ($219,353) at Christies, Hong Kong

Friday, November 23, 2012

Time for serious fine wine companies to stand up and be counted?

Sometimes it's all a matter of timing. A scant 24 hours after reading of the collapse of wine investment firm, Vinance, with expected losses of at least £25m, I received an email from Moneyworld promoting a business called Cult Wines, who in their turn, are offering a "free wine investment guide"

Now, as regular readers will know, I'm a fairly naive soul who's easily confused, so maybe other people will have fewer difficulties associating the offer of that guide with the news that Cult Wines, it seems, is not actually "permitted to offer financial or investment advice". 

Looking at the Guide didn't reduce my confusion. A page headed with the words "Why Invest in Fine Wine?" sounds - to my ears - suspiciously like advice. As does ‘Investing in fine wine is a good way to preserve wealth in times of rapidly rising inflation’ (apparently a quotation but not attributed)

I was also interested to see comments like "weaker vintages (‘off -prime’), with substantially lower release prices, can also deliver strong investment potential". Which "off prime" vintage are Cult Wines referring to?

Another unattributed quotation states that ‘Cult Wines do not levy any early redemption charges at any stage or charge any selling commission.’ The explanation for this is that the company charges a hefty 15% at the outset. Presumably on examples of the 2011 Bordeaux that the team (below) bought at the 2011 en primeur tastings. 

So, any mug - sorry, that was a slip of the key; I should have said "investor" - who decides to "invest" in £50,000 of super 2011 Bordeaux (presumably bought at the best possible prices by the Cult team), has to write a cheque for £57,500 to include Cult's 15% charge.

Then, assuming that the wine does not disappear (as has happened in so many other cases) all the "investor" has to do is sit back for "3-5 years" apparently, and watch its value rise. Or not. Cult's claim is that it generously declines to share in any profit an investor might make. Another view is that their business model allows them to make considerable amounts of money from every customer irrespective of the success or failure of the investment. 

Cult Wines' website makes much of the fact that Tom Gearing, one of the principals, was a finalist of the UK TV show The Apprentice. No mention is made of Cult's appearance in Jim Budd's excellent JimBuddinvestdrinks website whose only raison d'etre is to  protect consumers against possibly unwise wine investments.

Anyone tempted by Cult Wines offer, and unworried by the upfront commission, might care to read this exchange between Budd and Cult - and others.

Behind all this, however, lies a more fundamental question. At their current prices, fine wines are, whether one likes it or not, largely the focus of individual investments and investment schemes. The traditional wine world would rather pretend that this were not the case - while happily pocketing the proceeds. Wine, they say, is for drinking. Of course it is, for some people, but not for many of the people who are actually doing the buying. They, I would suggest, would echo rugby player Austin Healey's words on a video on the Vin-X website that the wines are "just a row of figures n the spreadsheet".

A bar that's simply frequented by male customers and female escorts can claim that it's at least one step away from any involvement with prostitution. When the bar provides the female company, however, that claim looks a little less convincing.

It is time to call a spade a spade and for this business t
o be properly regulated. Especially if, as has been claimed, investors in fine wine have lost £100m through dodgy firms over the last few years. Cult Wines may be a perfectly solid business with an upfront commission model that I - and others - happen to dislike. Vinance, on the other hand, had a pedigree that should have frightened off anyone who was aware of it. The UK FSA is currently addressing the issue of Fine WIne Funds, but not the sale of individual cases. Maybe Britain's legitimate companies might care to address the issue rather more forcibly than they have done up until now. It's time for them to publicly admit that investing in wine is a very different business from buying it to drink. That acknowledgment may be hastened quite soon, I suspect,  when the UK tax authorities take a long hard look at the money they are losing from its current ambiguous capitals gains tax status.


Next week sees the opening of a consultancy process regarding the creation of a Wine Investment Association - WIA - spearheaded by Peter Shakeshaft of Vin-X. Mr Shakeshaft proposes that companies offering wine investment should be monitored by an independent body and thus carry the equivalent of a seal of approval. Among the issues to be covered will be cold-calling and the accuracy of information provided to potential customers. Some support from established wine merchants has apparently been received, though it will be interesting to see whether firms like Berry Bros and Corney & Barrow choose to join. I wonder if any will be deterred by Mr Shakeshaft having been described as a "controversial financier" in the London Standard. 

Mr Shakeshaft disagrees with me over my dislike of upfront payments and suggests that regulation of aspects like this would make it difficult for some wine investment companies to survive. (According to a Motley Fool post, he had similar feelings about FSA regulation of stockbrokers).

He does not seem to be a fan of Jim Budd. His view might be explained by some of the comments Budd has made on his site about him.

Thursday, November 22, 2012

More is less... (with thanks to Hugh MacLeod of Gapingvoid)

Hugh MacLeod, the cartoonist and blogger and creator of gapingvoid just posted this...

Very much in line with a couple of my own - less concise - efforts which can be found here and here 
flavors of ice cream.gif
Flavors of Ice Cream Buy This PrintLike Flavors of Ice cream on Facebook   

This is another riff on the Paradox of Choice, Barry Schwartz's great book, he wrote in 2004. It is still easy to forget.

My business partner, Jason Korman, used to go on endlessly about this being the reason why wine marketing is so screwy - he used to say, "who can decide which bottle of wine to buy, when you are staring at 2,000 choices".

Same goes for ice cream.

At some point more is less. 

Wednesday, November 21, 2012

Food & Wine Matching in China. Worth pursuing? Or a waste of time?

Image of Chinese dinner courtesy of

“We like the game...” She had no way of knowing it, but my young Chinese friend had just come up with one of the best and most elegant responses to the question of food-and-wine-matching. Her position at the heart of one of China’s biggest state-owned wine companies had made her an ideal person to ask about the relevance - and more importantly, the likely commercial fruitfulness - of the efforts westerners are making to promote the way their wines go with Chinese food. First, she pointed out, talking about “Chinese” cuisine is as meaningful - and and insulting - as talking about “European” cuisine, lumping, pizza, paella and steak and kidney pie together as one. The use of chilli in Szechuan is far, far more liberal than in Cantonese kitchens, for example. 

Then, of course, there’s the range of different dishes on the table. At a banquet there would rarely be fewer than ten of these and even at home, four or five would not be uncommon. As a rule, there is supposed to be one per person, with some discussion over whether rice or noodles should be seen as being additional to this number. So, which of these deliciously individual plates of food are you going to match with your Volnay, 
Viognier or Vouvray? (When I repeated the suggestion by a western expert that one should aim for the “main” dish, the “piece de resistance”, I received a very withering look: every dish should reflect the cook’s finest efforts).

Then, my friend, continued, there’s a cultural gap between what westerners might think constitutes a perfect combination and marriages that might suit a Chinese palate. “In your countries”, she said, “you have a strange relationship with chilli. It’s like a fire you like to light and then put out. So you ask for hot, spicy dishes and eat them with cold drinks to remove the effect of the chilli. It’s a bit like drinking hot tea with ice cream. We cook with those spices because we like what they do to our food”.

So, I responded, are you saying that everything people are doing - all the books, tastings and dinners that are so painstakingly prepared to prove the food-and-wine case - is a complete waste of tie in China? “No”, she patiently replied. “For several reasons, it may be worthwhile. We like rituals - think of the tea ceremony - and the concept of ‘face’ involves being seen to do things in ‘the right way’. So, there’s an interest in the concept, and in particular we can be fascinated by the way western wines go with western dishes. That’s a game we can understand and it’s a game we like...”

Of course, some Chinese gourmets who’ve been bitten by the wine bug, do develop a fascination with marrying wines of every kind to specific examples of Asian cuisine. I have been lucky enough to have been invited by the Singaporean vinous luminary NK Yong to enjoy brilliant banquets prepared by his wife Melina that are as perfectly orchestrated as any symphony. But these are exceptions to the rule. Realists - and anyone who has talked to many sommeliers in China - would have to respond that eating western food - with or without appropriately chosen wines - is not a daily activity for most wine drinking Chinese. The majority are happy to choose a red to begin the meal and stick with it throughout.

My Chinese friend had not finished, however. “Why, in any case, are you westerners expecting us to do what you don’t actually do yourselves?”. Pointing out that she had spent time in Europe and the US, she asked how often normal people - not wine professionals or enthusiasts, but normal people who buy wine to drink at home and in restaurants - actually pay any real attention to creating perfect food and wine combinations. “Yes”, she said, “you’ll maybe make the effort on special occasions - a few times a year - but from what I’ve seen on a daily basis, most people eat and drink what they like”.
Sometimes it takes an outsider to help one to focus on aspects of one’s own life. Listening to her, I cast my mind back to the many wonderful meals I have had at which Michelin-starred chefs, sommeliers and winemakers had worked together to create the most amazing hedonistic partnerships. Were they all wasting their time (and money)?. Of course not. Those occasions set the wines into fascinating contexts, often bringing out characteristics and qualities I, at least, had never seen before. But they were no more anchored to the real world than a fashion show in which beautiful women with improbably perfect bodies parade successions of garments along a catwalk.

To the designers, models and journalists, those catwalk shows are vitally important, possibly making the difference between a fashion house making a profit or loss. But viewed from the outside, they’re a game. A possibly engaging and, for a tiny number, compulsive game, but a game nonetheless. And we should be grateful that some Chinese at least enjoy playing our games on occasion even if they are never going to become any more part of their daily lives than they are of their neighbors in the west.

Monday, November 12, 2012

Why we haven't got closures right yet... A follow-up

Nomacorks and screwcaps on the same brand...

Given the responses I've had to my previous post, I should perhaps make the point that my interest in this subject is not academic or hypothetical. I have a dog in this race. Or several dogs to be precise. The Le Grand Noir wines of which I am co-owner currently sell - for $8-10 or equivalent - in quantities of over 1m bottles per year in a wide range of countries. They are currently shipped under three different closures. The whites, and the Pinot Noir, are under screwcaps; the reds under Nomacork and shipments of both styles to China have natural corks. 

This less-than-ideal situation (at least in terms of dry-goods inventory) has little to do with the wine, or our personal preferences and a great deal to do with the market. Rightly or wrongly, our business model has been based on listening to consumers and the distributors and retailers who deal with them in each of the over 12 countries to which we are shipping our wines. So, we briefly tried using screwcaps for all styles in the US - our biggest market - but customer resistance forced us back to Nomacork. We tried to get the Chinese importers to accept Nomacork or screwcaps and they insisted - to my chagrin - on naturals. We haven't used Diam (which I see as effectively interchangeable with Noma in many ways) and can't afford Vinoloks on wines retailing at our prices. And that doesn't really leave many other options.

Cork-supporting fans think I should simply use naturals for everything and get over the fact that a proportion of my bottles will taste at least different, and most likely worse, than the others. My screwcap-loving friends propose that I persuade or bully reluctant customers into accepting a closure they find aesthetically unappealing ("I know you wanted chicken sir, but you really should try the roast beef") and the Nomacork brigade can't see what all the fuss is about.

To be blunt, Looking at my bottles and at what is on offer to me in the way of closures, I feel like a diner in a restaurant whose menu has nothing I really want to and/or can afford to eat. Am I really alone in feeling this way?

Friday, November 09, 2012

Life in black and white: thoughts on corks, screwcaps and alternatives

I hate corks
   Are you saying that you really want to unscrew a bottle of la Tache?
No, actually I don't think that screwcaps are the answer.
   But you say you don't like corks...
Yes, I hate the unreliability of corks and I don't believe that screwcaps - however reliable - are really appropriate for bottles of fine wine.
   Why not? They've been proven to work brilliantly.
Yes, and so do quartz movements in watches. But I don't want one in my $10,000 Patek Philippe. It's not an efficiency issue, it's a matter of perception. Luxury goods need luxury packaging. Expensive perfumes don't come with basic screwcaps.
   But surely, it's just a matter of time. People will learn how much better screwcaps are than corks.
What evidence do you have for that expectation? There are actually fewer bottles of screwcapped wine on sale in the US than there were two years ago. And no one is seriously succeeding in selling them in China. Even the Australians are using natural corks there. So that's two big markets that aren't heading towards screwcaps. Actually, I'd argue that being sealed with a screwcap has been a major handicap for some Australian super-premium wines in the US.
   Yes, it's frustrating... Why can't consumers there see the logic? Screwcaps are simply more reliable than corks.
Well, consumers won't - in your words - see the logic until the people who produce the wines they like point them in that direction. Most consumers don't read articles about wine; they simply go out and buy a bottle of something they think will taste good or make them look good. And when all the top wines from France, Italy, Spain and California have corks, the screwcapped bottles stand out on the shelf like the guy who's showed up to a smart wedding in jeans and a t-shirt. I know, because we tried using screwcaps for our le Grand Noir reds in the US - and had to switch back within six months. Retailers and consumers simply didn't get it.
   Screwcaps are working in some countries.
 There are only three countries that currently favour screwcaps for quality wines: New Zealand, Australia and - to a lesser extent - Austria. (Switzerland loves screwcaps, but only for its cheaper wines). All three, interestingly, have small populations and a relatively young industry. (And that's true of Austria too). British consumers accept screwcaps - on lower-priced wines, but they don't want them on their Burgundies.
   What about New Zealand Sauvignon and Pinot Noir?
Okay, those are the proverbial exceptions to the rule; they also hit higher price points than other countries, but they are a tiny part of the market.  
Well, most of winemaking Europe is against screwcaps because it's naturally conservative, and the US is against them because US producers like selling highly priced wines and can see the disconnect between the $100 price tag and the Coca Cola-style closure. (However prettied up it might be).
   So, you don't see them changing?
Why should they? Who's pushing them to do so? People are happily shelling out $1000 for top Bordeaux with unreliable corks. On that basis, you could say if it ain't broke, why fix it?
   But you admit that corks are unreliable?
Yes, as I said, I hate the horrible variability - both in terms of TCA, from marginal to blatant, and the far more serious incidence of random oxidation.
  So what about Diam and Nomacork?
I like both of those a lot more than I like natural corks. We use Nomacork for our le Grand Noir wines (apart from the bottles we send to China, unfortunately!) but they are not the answer.
   Why not? Surely they both offer the reliability you're looking for. And Nomacork even offers wineries the choice of how much oxygen permeability they want. Isn't that a perfect solution?
Yes, it's terrific, but I'm sorry, both Diam and Nomacork are still effectively copies of natural corks, And even when a copy is better than the original, it's still a copy. And I still don't really want to pull one from my bottle of la Tache.
   So what's your solution?
Well, I don't actually have one but I do like the notion of the Vino-Lok/Vino-Seal glass stoppers.
   Why are they better than screwcaps or synthetics?
Because they're far more stylish and genuinely innovative, while referring back to the notion of decanter stoppers. They're made of glass, can be branded with the producer's name - and even the vintage - are easy to remove and replace. What's not to like?
   Well, the price for starters!
They cost the same as a top quality cork and applying them is little more difficult than applying a screwcap. Producers like Henschke in Australia and Cusumano in Sicily are using them, pretty happily from what I hear. 
Half of all Hill of Grace is now under Vino-Lok

   But how reliable are they?
Okay, if the bottles aren't perfect, the stoppers won't work properly: they're less forgiving than natural or synthetic corks. But that's just a QC issue at the glass manufacturer. Steven Henschke told Dr Vino that, after five years of testing, he's happy with them. The bigger question is 'how well does wine mature under them?'
   And what's the answer?
Obviously nobody knows, yet, and nobody stands much chance of knowing for the simple reason, that too few proper tests are being carried out. It's the same as it was for screwcaps. The first test on those was conducted at Haut Brion in the late 1960s. And nobody bothered  to follow it up. Everyone says how wonderful the Universities of Bordeaux, Davis and Geisenheim are, but until quite recently, none of them did any proper research in any of these august institutions on quality red wine under screwcaps. It was left to the Australians. So, now we're all getting excited at Chateau Margaux and Davis finally doing some closure research, which is great, but the Margaux tests haven't even included the glass stoppers.Tragically, wine producers across the globe seem to have decided on corks, screwcaps, Nomacorks or Diams, and stopped looking elsewhere. I think many of them are much more likely to have an affair than to explore other ways to seal their bottles. Stephen Henschke is my hero, for saying to Dr Vino that he'd "always viewed screwcap as a transitional closure, poised between cork and, well, we don’t know what,”
   But let me get this straight. Are you saying that you think that glass stoppers are or aren't the answer?
A wise man once gave me an invaluable piece of advice when I was struggling to decide between two options. "In my experience", he said, "the correct choice when you are juggling between A and B, is often C". I don't know whether the C in this instance is the glass stopper or something we haven't seen yet. All I do know in my own mind is that in a decade the debate will have moved on and the cork fascists ("We've always had them so we'll always have them") and the screwcap fascists ("We've proven how well they work over the last decade; everyone will come round to our point of view") will have a real argument on their hands. What I can't understand is how, in an age when we've sent robots to Mars and decoded the genome, the wine industry is still essentially arguing over whether to seal its cherished bottles with unreliable bits of wood or cheap-looking copies, or even cheaper-looking aluminium screwcaps.

If you found this interesting, please do read the comments below; You may also want to read the follow up piece to this