Tag Archives: Shopping

Can a cheap wine be too good?

I attended a “Spanish Wine on the High Street” tasting recently. The idea was to showcase the best, or most popular, Spanish wines in the ranges of the UK’s top supermarkets and high street wine retailers (or what’s left of them), as selected by their buyers. There were wines of many styles and prices there, including very expensive ones (and lots of Rioja). I have published some of my thoughts from that tasting on my Posterous blog, but I want to explore a separate question here.

What would you expect for 61p?

Supermarket wine shelves UK
Image by casavides via Flickr

We all want a deal. We all love finding a bargain, where the value for money, the “bang for your buck”, is great – especially if we are the ones to discover it and tell our friends and gain ‘kudos’. But sometimes, things might also look, and taste, too good to be true.

One of the wines was from a region already known to make decent, uncomplicated and good value wines. It was not stunning, but it was certainly drinkable, with nice fruit and a clean finish. The surprise was that it was selling for only £2.70 a bottle.**

Normally, if I even tasted a wine that cost this much, I’d expect something virtually undrinkable, simply because it is not possible to make a wine and sell it at this price. So, what does it mean?

I should say I know NOTHING about the deal that got this wine listed in this retailer, but let’s face some basic facts:

In the UK, on a retail price of £2.70 there is £0.40 of VAT and £1.69 of Duty (which is fixed for ALL wine bottles, of any price). That leaves £0.61

That 61p has to cover the cost of:

  • the glass bottle
  • printing the label
  • cork
  • capsule
  • cardboard cases
  • shipping (from the producer to the UK)
  • distribution (within the UK to all the shops)
  • PLUS the retailer’s margin (the supermarket has to make some money!)**

oh, wait …

  • growing the grapes
  • picking the grapes
  • crushing the grapes
  • fermenting the juice and storing it for a period of time
  • all the processes of ‘filtering’ and ‘preparing’ the wine
  • bottling, corking and labelling the wine
  • getting through a great deal of administration and bureaucracy
  • staff to do all this stuff
  • … and maybe leave some money for the winery?

Does that sound likely?

Wineries do their utmost to make a good wine in such a volume that they can make economies of scale and sell it at a reasonable price, but this is extreme. So what are the implications?

These deals are driven by a certain level of desperation. No winery can make money on it, but there are circumstances where “moving” a wine even if it is for almost nothing, is cheaper than the alternative. If your tanks are full of a good wine you have not been able to sell from last year, and you NEED those tanks for this year’s wine, and you can’t simply pour it down the drain … what can you do?

Retailers will gladly take it off your hand if they can make money from it. They’ll sell it cheap and get folks flocking to their shops.

The knock on problem is that we consumers say “Hurrah!” as the value for money is apparently very high, and we love spending so little.

We are then entitled to think, “well, if that wine tastes THAT good for £2.70 then why should I pay £4, £5 or £6, or even £10+?” But it isn’t economic. Wineries and regions will not survive selling wine at that price level.

All the good work by wine lovers to explain the agricultural, artisanal, low-margin, high unique value proposition of wines is lost in a storm of price discounting.

Selling decent wine at throw-away prices changes the expectations about wine as a whole, and particularly the country that it is associated with. It associates it with “cheap” wine, a moniker that is VERY hard to get rid of later (just ask Bulgaria, Portugal, and even Chile).

Too often they become, and remain the “best wines for not a lot of money” instead of the “best value for money” which they aim for.

I totally understand why wineries can end up in this situation in the short term, and that supermarkets are also commercially driven, but it does wine no good. If this becomes the norm (as, arguably, it has), good wineries that have to sell at properly commercial prices will not find space for their wines and are forced to compromise as well, or go out of business.

At the end of the day, cheap wine is usually terrible, undrinkable, nothing more than slightly flavoured, acidic alcohol. You get what you pay for … generally.

But if you buy that wine, and it actually tastes good, then what incentive do you have for spending more? After all, if we keep spending at this level, more wineries will be desperate enough to sell wine at these prices. Until they all close.

How can we change this situation, if retailers don’t care? Whose responsibility is it? Well, the government is poised to create a “law” to stop selling “below cost” … but how do you define that, and where does the money go? A topic for another day.

I think that good wine CAN be too cheap.

Do you agree? Do those who cannot afford more expensive wine ‘deserve’ good wine at cheaper prices despite what it does to the industry – is it just a case of survival-of-the-fittest?

By the way, for a variety of reasons, I am not mentioning the wine, producer or retailer that occasioned this thought. It is a general point I am making.

** I discovered that the £2.70 was a promotional price during a 25% off promotion. However, as this simply removed one aspect (the retailer’s margin), the general point remains although it would have to be taken into account

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On paper, this is not such great value

I should first point out that I have never read any other Robert Parker book, magazine or web forum (beyond a few glimpses). I will readily admit that the part of the wine business that he normally focuses on, and they way he does it, have little allure for me.

Much as I love wine, and much as I’d love to drink mature quality wines from Bordeaux, Burgundy, Rhone, Napa, and so on, I am not a collector of wine ‘experiences’ or points, and I have a limited budget I would rather spend on my family than on such wines. My interest in wine is much more cultural and prosaic.

So, when I was offered a copy of a new Robert Parker wine guide to review by the publishers, I almost automatically said “No!” However, I was intrigued by the title (and flattered to be asked), so I accepted on the basis that I wouldn’t guarantee to publish anything, … and I almost didn’t.

The guide arrived very quickly and I immediately started to leaf through it. Robert Parker’s “Great Value Wines” (seriously good wine at remarkably fair prices) does seem to be my sort of book in theory. Imagine having such a resource?! Great wines at reasonable prices (which means under £20). Superb shopping list ideas and a list of wines to recommend to friends looking for advice.

The country introductions are OK (short and generic), details about regions is limited or non-existent, but it immediately became obvious something BIG was wrong.

This book has a major flaw. It is a book.

Robert Parker has made a career, and considerable riches I’m sure, from minute assessment of wines that need to be tasted and retasted for every vintage and at different stages of their development, mainly so a certain part of the market, the investor, can decide on the ‘value’ of the wines without ‘wasting’ them by actually drinking them. Imagine!?

So, how can he possibly publish a book about specific wines that does not contain any vintage information? Each wine, listed by producer by country, sounds great, but has only one tasting note which apparently relates to any year it might have been made.

[update: don’t get me wrong, I think vintage differences in modern and larger volume wines are overstated, but Mr Parker makes his living from this]

The problem, of course, is that this is a book.

It takes months to take a finished manuscript and complete the printing and distribution of a book so as to get it in the hands of consumers. If you are writing a novel that is not much of a problem, but if you are writing about wines that are available now, then it is. Today most wine available is ‘current vintage’ only. Unfortunately for book publishers, this has a tendency to move faster than they do.

Robert Parker is not alone in this as Matt Skinner admitted in November. Skinner was accused of having ‘recommended’ specific wines from vintages he could not possibly have tasted, for the same reason – they would be available when the book was published, not when it was written.

The ‘Great Value Wines’ solution was to include some generic sort of tasting note or description and remove mentions of any vintage, although the results are a little artificial (and peppered with evidence that these were, at one time, notes on specific wines).

If only … this were a website!

This book has the feel of someone’s tasting database, extracted, filtered, with the vintage field removed, and then printed. It lacks cohesion.

Unfortunately it was probably more useful and easier to navigate in a database format.

However, the same data, posted online, could be a great introduction to these wine. What the web could do is link thirsty consumers to pages that offer greater details and differences of each vintage tasted by Mr Parker and his colleagues, updated regularly, and from there to retailers, producers, bloggers, consumer reactions, etc. No need to reprint, just update.

Now THAT would be worth paying for.

Unfortunately I don’t think the paper version is. Sorry!

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A wine buying social experiment

Money coins
Image by CascadeAndSTAN via Flickr

A month ago I mentioned that I have been impressed by the potential of the wine newsletter sent by The Wine Gang. I am excited to say that I have done a deal with them for the Wine Conversation to give away 5 free subscriptions to their newsletter, worth £20 per year.

However, being an inquisitive and social chap, I thought I’d do it in my own way and seeing what we can learn from it.

My contention is that the best wine sites (& newsletters) need to balance learning with buying advice.

I believe that this newsletter, arranging its reviews not by style or region, but by retailer, makes it much easier to use it to buy better wines, and thus encourage subscribers to try new wines and even trade up with confidence. Most importantly, it can be used without making you change where you currently buy your wines (but you can).

So, here’s what I’m thinking (for stage 1): …

At £20 per year, the cost of the subscription works out to £1.67 per month

I’m looking for 5 people who would like to receive the newsletter (and browse the archives) of The Wine Gang (FREE), and all I ask is that you commit to answering this question: “how have you saved £1.67 (or more)“?

  • It could be that you know you spend £6.99 on a decent bottle of wine, but you find two worth £5.99 you really enjoyed drinking
  • It could be that you discover a wine you might have considered buying rated poorly, so you bought something else & saved that money?
  • It could be that you found a wine worthy of giving as a gift that cost less than you expected
  • Maybe it saved you buying another wine book (I hope not too many, they need love too)?
  • Or maybe it is something else … there must be other things worth £1.67
  • Or maybe you didn’t – and I’d like to know that too

I’d like to hear your thoughts (especially as this month they rated the wines of Majestic who just reduced their minimum purchase to 6 bottles). I’d love to know if YOU, wine drinkers, found value in this product. I’d like to share those experiences on this blog and on twitter.

Stage 2 will involve drinking some of your favourites together, maybe sharing the moment online, but I’ll save that for another day – but The Wine Gang are organising a Christmas Wine Tasting event so watch this space

So, who wants to test this out?

Leave me a comment below and I’ll see how many volunteers I get and the decide how to apportion the subscriptions.

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