Price and value adequation

WINE TALK
#1

The subject about the GJE tasting in Paris brings me to an other aspect of the wine market.

I think we all agree that in many regions (Jura, Alsace, Loire) the value of a wine is in fair to excellent adequation to its quality. In other words, it is usual in Alsace that a wine at $ 20 is superior in quality to a wine at $ 10.

In Burgundy, this adequation seems also to be from fair to good.

What about California ? Rhône ? Tuscany ? Mosel ?

And now, the big question : is this “sought-for” adequation a reality in Bordeaux or Bordeaux is, on earth, the wine region where you will find the largest discrepancies betwwen the quality of the product and its price ?

If yes, then something must be explained. Why such difference ?

#2

A fair analogy can probably be drawn with champagne and Kolleen Guy’s monograph,
When champagne became French, provides a thorough historical analysis IMO.

http://books.google.com/books?id=Ar5M-DhfHegC&dq=“when+champagne+became+french”&printsec=frontcover&source=bl&ots=2XRHV4Qk3H&sig=x8ADqesdtMwdwwLqzwGo7ATdfYk&hl=en&ei=5RdTSqjNMJLItgfjzfypCA&sa=X&oi=book_result&ct=result&resnum=2" onclick="window.open(this.href);return false;

For instance, on pp. 144-5:

…Others saw the issue of delimitizations as little more than a destruction of the nation, a potential civil war. In one mocking article in the pages of > Le Figaro> , the delimitations discussion was titled “La Guerre des Deux Haricots,” or “The War of the Two Beans” and depicted as a national calamity. The satire began with a description of the hostilities in the provinces of France, dubbed the Kingdom of Little Peas. Two Beans, each originating from a different region, confronted each other in the market. One Bean argued that he was the superior vegetable, representative of the refined riches of the kingdom, endowed with “unique qualities” and heir to a rich historical legacy. His opposing legume, in the outlandish dialogue that followed, attacked these assertions by laying claim to very similar “unique qualities”.
Mounting anger turned the Beans an unnatural shade of green. On the verge of violence, the seething Beans called out to the Peas, who legislated the kingdom from their seats in the National Pod. Each Bean demanded special status within the kingdom derived from intrinsic superiority. The Peas, for their part, found themselves sharply divided over the claims of the recalcitrant Beans. Incensed by the rival’s claims and frustrated by the inactions of the Peas, the two Beans savagely attacked each other.
Fighting quickly spread. The noisy battle between the two Beans attracted attention of other members of the Kingdom of the Little Peas. A truffle from Perigueux, a stick of butter from Isigny, an asparagus stalk from Argenteuil, and a wedge of cheese from Brie vaulted into the raging conflict. Amid the cacaphony of competing claims, other vegetables, cheeses, and > wines > joined in demanding special legislation to acknowledge their distinctive qualities. War escalated. As they oozed and bruised, splattered and spewed, each belligerent clamoured louder for state intervention on its behalf. The Peas, paralyzed in their Pod, watched in horror as the “The War of the Two Beans” tragically engulfed the kingdom.

Bdx was no different. Historically, Bdx used its geographic chokehold on maritime commerce to give itself a step up over its competition in the hinterlands. Thank you Kolleen Guy !

#3

Absolutly great story !

And quite true when you know the past history of Bordeaux which, by some outrageous laws, prohibit the wines from south-west to arrive in the port of Bordeaux before the producers of Aquitaine has sold their annual harvest !

Thanks a lot for this text : real great and so funny !

#4

Francois,
Kolleen’s book appears to be a labor of love and an academic landmark. She must have spent years in various archives. Its really worth seeking out if one wishes to understand how and why many commodities have now become luxury goods.

Cheers !

#5

François

As you well know, there are wonderful opportunities to find undervalued wine in Bordeaux or depending on ones view, there are also some risks purchasing overpriced, underperformers. With the speed of the internet, I think it is getting more difficult to take advantage of market inefficiencies and to find gems such as the 2004 Quinault l’Enclos that I purchased EP for a song or Puygueraud or many others.

In California, the exclusivity and hype of cult wines always lead to poor value in my opinion and I’ll go further and say that there are few good values in good cabernet coming out of California.

It seems to me that when the wine of a region is considered as a beverage by producers and consumers, prices are reasonably proportional to quality. When wine is marketed as a luxury good and attains a degree of exclusivity, that is when price and quality can diverge because people are just buying a label.

#6

Ed, you see that in CdP in recent years with many more luxury cuvees being produced and sold for somewhat cult-like prices. In many cases, what is in the bottle isn’t worth the extra cost for me. But they get big RP points and sell.

#7

This is the big thing about wine critics when they are followed by readers : they want, by principle, to be on the side of the amateurs but in fact they work basically for the Producers even if they do not want to.

#8

I never thought of RMP as a Consumer Advocate, rather I see him as a neutral Wine Advocate irrespective of recent criticism in various camps, I think he is objective in his wine evaluations.

Paul,
Good point about the luxury cuvee CDP, I am not sure they are worth the extra expenditure. I am a boring regular Beaucastel kind of guy, I love the Mourvèdre component.

#9

Thread drift alert… Parker functionally segued from consumer advocate to trade advocate the moment he started publishing reviews of wines before they went on sale. There is no situation in which a consumer could benefit from that but many opportunities for producers and middlemen to profit handsomely.

#10

Originally posted by Francois Mauss

This is the big thing about wine critics when they are followed by readers : they want, by principle, to be on the side of the amateurs but in fact they work basically for the Producers even if they do not want to.

You could argue that the Bordeaux market in particular is distorted by two things:
Firstly, where there is a significant investment component to the market, buyers will seek wines that have investment value and can be re-sold, which means a reputation and brand sanctified by history. If you buy for investment you want a name that will be recognised worldwide, and you don’t care about relative value. Secondly, there is the 1855 classification.
However, one of the functions of wine critics should be to identify value anomalies.

#11

The other thing in Bordeaux is vintage. I don’t buy the reds very much, but I loves me a good Sauternes. And while I can’t afford Yquem very often I find
that the other major producers do a damn good job. As a result, while Yquen in a top vintage may well be a religious experience, in an off vintage it’s not.
I’m sure the same applies across the board.

So why pay big money for a top name from a less than stellar vintage when you can get any number of good - if not better - wines from a better vintage for less?

#12

I think that for the most part, US wines are better priced to quality than are European wines. There are a lot of European wines that are totally mispriced because pricing in European wines, particularly French wines are based in part on how they were classified a 100 years ago, rather than on how good they are. Thus, there are some horribly overpriced wines and some wonderfully underpriced wines. With European wines, therefore, there are bargains for people who know what they are doing. Some of this is breaking down – with wine writers and the internet, quality is becoming better known. So, the village Burgundies that are better than some producers’ grand crus are going up in price, although generally they are still good values. And, Bordeauxs that are good are getting better prices, although not as much as they should be getting in many cases.

In California, there is no historical order and a wine that is good will go up in price. For example, look what happened at Chateau St. Jean when the WS named its Cab wine of the year. The good thing in California wine is that lots of people go for fruit bombs and the newest thing so that older classics are actually in many cases well priced for the quality.

German wines are a land of mispriced wines. Still, today, in most cases there is little price difference between good and great producers. A few producers like Donnhoff are going up, but there still are the Selbach’s of the German wine world.

For Alsace, I tend to agree, but what is as good for the price anywhere in the world as Trimbach’s Cuvee Fred?

#13

Wow, I’m not sure there are many statements about wine that I disagree with more than this. I think the US market is wildly inefficient.

#14

I wouldn’t disagree with this…but Wine Spectator gets grief, justifiably, for posting reviews of wines that are no longer available (smaller production wines typically). Not sure what the answer to this is…tho publishing reviews, with the retail price, before hand is a reasonable option (you can always choose not to do business with wineries/shops that don’t sell it for the reviewed price). Or buy wines from the Jura :slight_smile:. Doesn’t address Bordeaux, but that’s a bizarre situation all its own.

#15

Great post, and the worst crime has been Bordeaux over the past few years. As a retailer, I went and tasted, decided what I liked, but could not make a purchase and pass the “savings” on to my clients until the Parker score came out. Do you think Parker waits for the scores of some of these wines to make purchases? (Bordeaux aside).

#16

François –

To return to your question (oh, no! let’s keep drifting!)… Whether or not the quality/price correlation is good depends a lot on your palate, I think.

To me, there is a somewhat better correlation between price and quality in Bordeaux and Burgundy than many other regions, though there were certainly many old, established producers in both areas that rode on their reputation for too many years. And the Right Bank garagistes charge a fortune for wines I don’t particularly like. But, overall, prices tend to (you can see I’m hedging) reflect a long-term assessment by the trade and experienced consumers.

In the New World, and in newly developed areas of Europe, price is a less good indicator for me, but that is a reflection of my palate: The most expensive wines from places like the Central Coast of California, Australia and Priorat tend to be made in a huge, ripe style that I don’t like. I therefore often find that there is an inverse correlation and that the I far prefer the moderately priced wines.

Personally, I find the same thing is often true with Barolo. I prefer the traditional producers, who are often cheaper (yes, yes, Giacosa is an exception). Barriques are expensive, after all.

(The size and weight of the bottle is highly correlated with this style, too. I won’t buy, say, a Languedoc if the bottle weighs more than the wine inside. I know it will be a super ripe, extracted, oaky wine that won’t be recognizable.)

However, if you like that bigger style of wine, I think you will find the price/correlation is better in all these areas.