New World wines, as seen by Italians in 1895

Even now, the average Italian is not very aware of New World wines. Many casual consumers probably did not even tried one in their life and I can’t say I blame them: with such wealth of wines, both local and national, fit to every palate, there are not may reason to watch abroad, let alone to the other side of the World.

Of course the press talks about them from time to time, though it is not exactly the highest topic in the news.

But what did Italian wine experts thought about American wine more than 120 years ago? Giornale Vinicolo vol. 21, collecting the issues from 1895 draws an interesting and contrasting picture toward the issue. The entire text (in Italian) can be found here.

Number 4 of the year starts with a special issue by director Edoardo Ottavi: “Will America compete against us in wine as well?”
Considering the USA, the author acknowledges its enormous potential for quantitative production, due to the extent of land available for grape growing. The most promising states would be California (of course), Georgia, Ohio, Virginia, Florida and Massachusetts.
However at the end of the 19th century a definitive solution to phylloxera was still to be found. For this reason Ottavi also adds that no European vine can grow in North America, and that the only possible wine to be made here is the one from local hybrid, not fit for quality production. Furthermore American market is so big that local wines will never be able to “satiate” its thirst.
He concludes that “There will be no possible competition from North America to european wines, thus the issue won’t be further considered”. Ah the ingenuity! And to think that Cesare Mondavi will emigrate to America only 11 years later!

Then South America wines are considered: here the phylloxera was still to be seen (and in some area never arrived), so the author shows much more concern.(1) We discover that the power of Chile is not a modern development: the Country was already the most productive in South America in 1895, with vineyards covering 100,000 ha (more fragmented in the south around Bio Bio, with the biggest producers located in central Chile) and already exporting its produce. The wines have good quality and are made advanced techniques, the best from French varieties. The biggest problem was the logistics: the Andes barrier was at the time still a big obstacle and even with the development of a trans-Andean railway the length and difficulty of the trip will reverberate their cost to the final price. For this reason the author, with admirable foresight, states that “for now and for not just a few years, this American viticultural region does not need to worry us.”

The issue on American wines continues in Number 6, dated February 10th 1895. Other South American Countries are considerered: Argentina, Uruguay and Paraguay.

Argentina surface under vine is estimated at 22,500 hectares, with a production of 600,000 hectoliters a year. We notice that the main production areas has remain unchanged for more than 120 year: Mendoza (9,000 ha), San Juan (7,500 ha) and Catamarca. La Rioja and Salta were minor regions at this time, still less planted than Buenos Aires and Entre Rios (near the Uruguay Border, not much heard today).
The author concedes a good potential to this Country thanks to propitious climate and soil, but he adds that the road is long and the industry needs to focus on instruction and rationalization both in the vineyard and in the winery. Furthermore, here too vignerons were battling against phylloxera.
In 1895 local wine only satisfied 1/5 of the total demand, so there was not much to worry about. On the contrary fake european wines and imitations were widespread and that was a more serious concern.

For now they tend to replace european wine with liquid that is wine in name only, and that is produced in Buenos Aires.

Few words are spent for Uruguay: the Country is very small and had only 2,595 ha of vines in the departments of Montevideo and Paysandu, some of them still not in production. Phylloxera had landed here as well, thus all considered Uruguay would have remained and importer of european wines for a long time.

Paraguayan and Brazilian wines are a niche even today. The article reports some attempts in Paraguay, but winemaking is practically non-existent and the market very small (13-15,000 hl). Consumption is much higher in Brazil, but viticulture here is still in an embryonic phase. Bolivia, Venezuela and the other South American Countries do not grow grapes for wine.

Edoardo Ottavi concludes that Chile is the most advanced Country for wine production in the area, but even it can’t satisfy the demand of its neighbours. South America would have remained a profitable market for european wines for many decades to come, the only concern being that of falsification and imitations.

The author states that fake wines are the only way these Countries can compete with the Old World. Of course he was wrong, maybe he could not have imagined the technical advancements that would have take place decades after and the “defeat” of phylloxera which would have allowed Argentinian wine as well to become a serious competitor in the world of wine. Now USA, Chile and Argentina makes nice wines and export much, in Europe and in the rest of the World as well.
Anyway he was right in considering these three countries the most promising for wine production, to this I pay tribute.

What about the World of wine in 120 years? Will we see the rise of Asia, maybe Chinese or Japanese wines? For now it seems very difficult, but so it seemed to Edoardo Ottavi the success of American wines back in his days.

(1) Notice Edoardo Ottavi only possesses second hand sources, the words of a friend who visited Chile and the relation of Buenos Aires based Pompeo Trentin for the government.

Corriere vinicolo volume 21

Annunci

Tasting events: are they useful?

I often go to tasting events organized by importers: it is a great way to taste wines that you could not normally have, for lack of time or money. You may meet customers and producers, people you know or new acquaintances, and strengthen your network. Finally, tasting events can also be a great way to intoxicate yourself for free (be aware of who is watching though).

The last is especially true: you need to have a clear plan and the will to stick to it or even the most well intentioned taster risks wasting his composure and his time.

I envy those professional who can taste dozens and dozens of wine (en primeur even) and maintain their mind clear and their palate ready. I know that there are strategies and I try to use them, but the truth is that after 20 wines or, even spitting all the time, my lucidity drops abruptly.

Second, there are wines which perform better during tasting events: some are partly developed, some have a more expressive character, some are peculiar. These are easier to appreciate.

Other wines need more care. In the past I had some unconvincing bottles which suddenly turned to gold the day after, like 2011 Cristom Pinot Noir Mt. Jefferson Cuvée or 2009 Georg Breuer Spätburgunder. Should I have based my judgement on the first glass I would have completely missed their quality.

This is why when I attend these events, staring at that legion of available wines, I always wonder if I am really understanding what the wine has to say, if I am tasting it at the right conditions. It’s like I am speed dating the wines: yeah that girl was prettier, I got her number, but she was nuts. The shy, introverted one would have been better, but alas we’ll never know.

Seminars are way better: having 5-10 wines before you and a producer, importer or ambassador explaining you what has been done to the wine while you taste it is a great way to learn how production choices impact final flavour.

So are tasting events useless? Of course not. As I said, meeting customers, importers and producers is important, but you really need to be focused on what you are doing and why.
At present I am studying the Wine Scholar Guild Masterclass on Burgundy, so I’ll give precedence to Burgundy wines, bearing in mind that my judgement will get less and less reliable. If you are employed in a wine shop take note of what you need, which price band you want to fill, which Countries. Be also aware of overperforming and underperforming bottles, since often you don’t even know what time they have been opened. If you can participate in a seminar, with a limited selection of wines, it is even better.

And if you just want to drink, enjoy. Just please do not throw on the carpet – there are your customers watching.

Ad maiora

And thus it ends. I finally am a proud holder of the WSET Diploma, after two long years of studying (since January 2015). It has been a hell of a ride, even life changing. At least it made me understand the value of time.

Would I recommend it to someone interested in learning wine? Of course, but only if very motivated. At first (the first two or three exams) you have enthusiasm, you have energy, but as you proceed patience, perseverance and pacing become crucial. Someone with a day job and a family (like me) really needs to believe there is a pot of gold at the end of the rainbow to keep fighting.

I took my lessons at the online classroom, while sitting the exams in Tokyo. I learned a lot, but inevitably I missed the warmth of a true class and the interaction with other people, especially during tastings. On the other hand I was there every day, motivated to keep the pace of the lessons. The teachers were good, but some were better, and followed the students more closely.

What I would really love from the WSET would be a proper textbook for each Diploma Unit. I know, the extent of the topics covered makes it quite difficult, but for example instead of guessing the major spirit or sparkling wine producers that could come up at the exam I would have really liked to have a list for reference. I mean they can’t be changing so fast.

My strongest memory of an exam is the question about Smirnoff for Unit 4. Well more than a question it was just a word: “Smirnoff”. And know write about it for ten minutes like there is no tomorrow!
When I saw it my first reaction was probably the same of many other: “Oh shit!”
But then I remembered that I had read a book about the story of this company. It was for personal pleasure (the book is really entertaining), but it also served me well.

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Fantastic book, much recommended.

So did I receive some superpower after passing the last exam? Do I know everything about wine, its production, its regions, its business? Sadly no. However something remains, a base on which starting to build again, to deepen my knowledge of the topic. Better things wait for me, I hope.

Rome was not built in a day.

Of barrels and impressive Japanese wines

On March 15th I went to a tasting organized by Sapporo at the Hankyu International Hotel of Osaka. I was there particularly for the seminar by Juan Munoz Oca of Columbia Crest about the different uses of oak in wine and the different resulting flavour profiles.

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It has been a very interesting seminar, quite unique: I had the chance to taste four wine made from exactly the same grape (Chardonnay), all four of them 100% MLF, but fermented in different containers, stainless steel, French oak, American Oak and 2-3 years old oak.

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The two other wines to the right were the Grand Estates Chardonnay and the H3 Chardonnay.

The difference was very clear: American oak flavour is much more towards toasted coconut, vanilla, burnt sugar, while French oak is more delicate, with more cinnamon, white flowers, spice and a lighter vanilla tone. The neutral oak differed from the unoaked sample especially in the texture (smoother and richer) while the aromas were less bright, but not really “oaky”.

Of course there are many reason why wines fermented or aged in different barrels may taste different: the size of the container, its age, the age of the tree from which it was made, the degree of toasting, the type of oak. Even the way the staves are bend (by using fire, steam or hot water) has an impact.

But why a French oak would be different from and American oak? The fact is that American oak (Quercus Alba) grows faster than French oak (be it Quercus Robur or Quercus Petraea) and this means that its grains are larger. When used to make barrel larger grained wood will imply an higher oxygen transfer rate to the liquid it contains, resulting in different flavours compared to tighter grained French oak.

After the seminar I joined the Sapporo wine tasting on the same floor.

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Between the others I could taste the 2014 Grande Polaire Pinot Noir from Yoichi, Hokkaido and I must say I finally remained impressed by a Japanese red wine. Compared to the rest of Japan, Hokkaido has a relatively low humidity, an average annual temperature of 8.1℃ and virtually no tsuyu (the rainy season between June and July). Typhoons may struck the island, but being far to the north their strength is often moderate, as they unleash their power before arriving there. The biggest problem may be in finding sufficiently exposed spots because much of it is flat and the cold temperatures require careful screening of the mesoclimate. The present vintage is made with the fruit from a contractor grower, Hirotsu Vineyard, managed by the Hirotsu family. My note on cellartracker:

Actually this is a surprisingly good wine, the best Japanese red I have had so far and worth its 4,000 yen (around 40 dollars).

Pinot Noir 100% from Hokkaido, aged for 12 months in oak (50%). Style is clearly New World, with bright fruit, crushed red berries and vanilla from the oak. Intense both on the nose and in the mouth, it also shows soft tannins and solid body, but it does not lack acidity (after all Hokkaido is not really a warm place).

It is the first time I find such concentration in a Japanese wine (the same applies to the Merlot from the same producer, though Pinot Noir is slightly more balanced). Finally something I can really recommend.

The merlot from the same series, this one from Azuminoikeda vineyard in Yamanashi, was equally good, although slightly less balanced. On the other hand the Sauvignon Blanc did not seemed to justify its price.

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Stocks are low, especially for the Pinot Noir, but if you have the chance this is one that should be tried.

Producer’s profile: Gonzalez Byass

GonzalezByass

Gonzalez Byass traces its roots to 1835, when Manuel María González Angel, at the time still 23 years old, purchased a bodega in Jerez and became a sherry shipper. He started exporting wine to England with the help of Juan Bautista Dubosc and Francisco Gutierrez de Aguera, supported by their London agent Robert Blake Byass. From shipper to producer the distance is short and in 1844 the company acquired its first vines (today the company holds 650 hectares of vineyards and it is the biggest sherry producer). In 1849 famous Tío Pepe fino brand, named after the founder’s uncle, was born and in 1855 Robert Blake Byass became a shareholder in the company (though we will have to wait 1863 to see the birth of Gonzalez & Byass, renamed Gonzalez Byass & Co. 7 years later). For over than a century the two families jointly remained at the helm of the enterprise, until in 1988 Robert Byass heirs sold their share, leaving the firm in the hand of the Gonzalez family.

Gonzalez Byass is a legend and the life of its founder is especially entertaining: the shipwreck of his cargo of potatoes (retrieved thanks to his mother’s wit) in the early years, Manuel’s love for Victorina de Soto, the visit of Queen Isabella II and the birth of El Cristo blend. In the fifth chapter of his book “Sherry”, Julian Jeffs reports these episodes and more, making a very pleasant reading.

Today the company holds a vast portfolio not limited to Jerez: Beronia in the Rioja (and Rueda), Viñas del Vero in Somontano (just south of the Pyrenees), Villarnau in Penedes (the “sparkling arm” of the firm), Finca Moncloa near Cadiz (focused on still wines), Finca Constancia not far from Madrid (D.O. Terra de Castilla, concentrating more on daily wines). Two brandies (Lepanto and Soberano) are also produced in Jerez. All in all a well balanced group with a presence in many of today interesting Spain wine regions. Gonzalez Byass is also directly involved in the distribution, particularly in the UK and the USA, with a portfolio including also Champagne Deutz, Undurraga and Quinta do Noval. 

But the nucleus of Gonzalez Byass rest in its Tío Pepe brand which of course is not limited to fino production, but holds a full lineup of different sherries, traditional and modern. One of the most interesting is Tío Pepe en Rama which basically is an unfined and unfiltered Sherry fino, bottled straight from the cask. The category had been pioneered by Barbadillo in 1999, but Gonzalez Byass was one of the firsts to follow in 2010: Tío Pepe en Rama was first made in small quantity, but it got good reviews (here the words of Tim Atkin) and attracted market interest, so much that in 2011 production was doubled and this year the wine is going through its sixth release.

As is often the case with companies of such magnitude, the focus of Gonzalez Byass lies in the export market: in a recent article Harpers reports that exports in 2014 represented 66% of its business, an impressive increase from the already high 53% of two years ago. In the words of chairman Mauricio González-Gordon, the firm is concentrating especially on US, UK and Mexico key market, though brands are exported in many countries (let’s not forget Japan, where Mercian, owned by Kirin, retains a tiny portion of Gonzalez Byass share). The challenges that have arisen in late years for sherries and other fortified wines (overall declining in volume if not in value) have been faced with a brand diversification strategy: still and sparkling wines, spirits, direct involvement in distribution, even the sale of sherry casks for whiskey production. While CEO Jorge Grosse declared optimism towards a recovery of sherry (which we all hope), the direction of company seems to be one of expansion in different markets, gin being one of the most closely watched.

From what we see this policy is bearing its fruit: the company enjoys good health, with a 63% rise in net profit in 2014.

Some words on alcohol Minimum Unit Pricing

Another WSET assignment = new post!

This time we were asked to talk about Minimum Unit Pricing on alcohol by taking inspiration from the following articles

It is very difficult to make a research on these topic, because, as long as I could read, many sources will have a vested interest in the topic or an ideological bias, meaning that an author will first determine his position and then search for proof supporting his view.

We can find two different approaches supporting minimum alcohol prices, one theoretical and one practical: one bases its assumptions on the Sheffield Alcohol Policy Model, the other brings examples where some kind of price regulation on alcohol has been applied and successfully reduced alcohol related harm.

The Sheffield Alcohol Policy Model is a mathematical model claiming to be able to precisely evaluate the effects of minimum alcohol price on alcohol consumption and related disease, which is believed to be very tight. In its application on the Scotland case for example the authors maintain that, looking at the overall population, a minimum price of 40p per unit will exactly save 29 lives in the first year, reducing violent crimes by 3000 and days of absence from work by 9.5 days (page 138). The model assumes that heavy drinkers will reduce alcohol consumption when prices rise, for they will always tend to buy the cheapest booze possible (they don’t drink to taste, they just want to get drunk) and that higher prices will reduce consumption. The model has been extensively used by the proponents of minimum alcohol pricing and is more or less the base of Dr. Sarah Wollaston reasoning.

The example of Canada on the other hand look at the experience of this nation: in British Columbia, a 10% increase in average minimum prices in the last 8 years has led to a 3.4% decrease in alcohol consumption and a 9% drop in alcohol related hospitalization. In Saskatchewan the same increase caused a 8.4% fall in consumption and an alleged significant shift to lower alcohol drink.

Science and evidence thus support this kind of policy? Not exactly.

The Sheffield Model has been widely criticized for some of its implied assumptions . This commentary is especially illuminating. First of all there is evidence that a person dependent from alcohol will not stop buying booze when the price rises, but just shift to cheaper drinks. Second, the availability of alcohol on the market is not necessarily related to volume of consumption: the author brings the example of France, where people are drinking less and less, even though quantity on the market has not changed.

Moreover the model does not take into account factors like illegal alcohol production and trade which could thrive if the legal market is limited or the indirect effect that another tax would have on poorer households. Data sources are also questionable, for adjusted figures based on the English market are used to make forecasts in the Scotland society, not very correct for a model which tries to predict the number of lives saved by MUP to the single digit.

Finally, the model does not consider that alcohol consumption in the UK has already decreased from 2006, the year from which the data where sourced, by 17.5%, even though none of its beneficial effects has been reported so far.

The example of Canada on the other hand is not that relevant when applied to other societies because the relation between price, per capita consumption and harmful consumption is far from being clear and uniform over different countries. The I already cited France, but we could look at the case of Denmark, whose decline in alcohol related problems coincided with a reduction by 45% the tax on spirits in 2003. It is also curious to see that, according to WHO statistics, tightly regulated Canada has an higher per capita consumption of alcohol than relaxed Italy and Japan which makes me wonder if the problem lies more on a cultural plane than in the pocket of the consumer.

It seems thus that not much is supporting the minimum unit pricing position: a flawed model and contrasting evidence are not enough to back such policy.

For all these reasons, if asked by Japanese government on the topic, I will not encourage any additional price policy: besides the highly unpredictable effects it could have, the timing could not be worse because, as I reported above, alcohol consumption is already decreasing and sales tax, which jumped up from 5% to 8% in April 2014, is already destined to rise again in 2017 to 10%. Adding further burden to already worn out consumers will mean pulling the rope too much.

Moreover alcoholic drinks are not that cheap in Japan when compared to countries where MUP has been introduced, primarily because of sustained levels of existing liquor excises and custom tariffs.

My thoughts on taxation in UK, France and India

I wrote a brief article as an activity for the Wset diploma course. I am publishing it here, hoping that you will find it useful. The assignment was as follows.

Have a look at the following tables on wine taxes in the USA and EU:

Wine-Searcher: USA Sales Taxes on WineWine-Searcher: EU Excise Rates and VAT on Wine

Read through the following articles which discuss wine taxes in France, UK and India:

France 24: French wine tax plans will ‘cork the industry’Bauduc Blog: Where the money goes on a bottle of wine in the UKBusiness Standard: India offers to slash import duty on wines, spirits to 40%

How do the levels of tax compare between these 3 markets?  What impact do you feel these have on the local wine markets here?  What impact are they intended to have?

How do the levels of taxation compare where you live/where you are taking your examinations?  How does this affect the prices of wine local to you?

The levels of tax in the 3 markets of UK, France and India are different and try to answer to peculiar issues in the respective markets. 

UK and France are both members of the European Union, their VAT on wine is identical (20%), but the excise rate is much lower in the latter (0.33/0.83 euros for still/sparkling wines in France and 30.07/38.52 for the same category in UK). Given that the excise rate is a tax applied on production of a good (vs sales tax which is applied to sale), a state will tend to lower it for a particular product when promoting the sector producing that specific commodity. This is what happens in France. 

India situation in this case is much more complicated because, being a federation, VAT and excise will greatly vary between the governments. A report by the USDA Foreign Agricultural Service (page 5 and 6) brings the example of Maharashtra, India’s main wine producing state, where a series of taxes have been put in place to artificially rise the cost of imported wines, exempting local producers. 

A very similar point can be made if we look at customs duty, which are the focus of the the article from Business Standard. UK and France (and the rest of EU as well) have reasonably low custom taxes on wine, up to euros 32.00/hl, when special agreements are not in place. This may be basically because Europe has a strong wine producing sector and does not have much to fear from non-EU producing regions. Even though Australia, Chile, USA or New Zealand can offer good value, the custom duty will always be lower (that is, zero) for french, italian or spanish wine and the transport much cheaper. On the other hand India’s custom rate is still at 150% and will decrease to 30% at best. The unwillingness to lower this barrier is easily understandable in the words of Indian wine academy Subhash Arora who, quoting the article, said: “A reduction of duties to 40 per cent across the board means opening the gate for cheap imports. This way, the Indian wine industry will perish and this will also impact the farming community”. Indian wine as much to fear from Europe, in terms of quality, price and fame. Resistance is understandable.

In Japan, where I live, the levels of taxation for wine are as follows:

8% sales tax (will become 10% next year).
For still wines, a custom tariff of 15% or 125 yen/l whichever is less, with a minimum of 67 yen/l.
For sparkling wines , a custom tariff of 182 yen/l.
For fortified wines , a custom tariff of 112 yen/l.
A liquor tax of 80.000 yen/kl for both sparkling and still not fortified wines 
A liquor tax of 120.000 yen/kl for fortified wines (which are considered liqueur) +10.000 yen/kl per degrees by volume when alcoholic degree exceeds 12% (so a 15% alcohol port will be at 150.000 yen/kl). 

If you think this is complicated you should give a look at the taxation for beer, which is calculated taking into account the malt percentage in the brew.

If you consider that Japan does not produce much wine by itself, this means that even a barely drinkable bottle of wine will be at 500 yen (at the moment 3.89 euros/4.21 dollars/2.81 pounds), though the majority of the wine sold will be between 500 and 1000 yen, as reported by the latest issue of Shuhan News. Compared to my home country, Italy, where for 3 euros you can by a very honest bottle, it is a very hard life for wine lovers in Japan.