GRUNTY PARKERILLAS CRASH WITH DETROIT

Roberto at Wine Expo more gallons per smile

No Fish Eye Merlot At Wine Expo

By PHILIP WHITE – a version of this story appeared in The Independent Weekly 05 DEC 08

Australia’s invasion of the USA wine gullet was always Quixotic as much as chaotic. Other than the $1000 per bottle gobstoppers like those wine shipper Dan Phillips delivers to Robert Parker Jr., who loves them, the bulk of our ordnance has always been industrial plonk lobbing at the price of bottled Italian water. I’ve left a lot of good work out, but you get my drift.

When capitalism fell over the other day, the Australian blokes responsible for both horns of this wine dilemma, and their bank managers, went out and got cactus, were awful to their wives, and contemplated suicide. The smarter ones then took a tablet, begged their wives for forgiveness, hired a lawyer, and sued their American distributors for payment.

“Expensive Wines Rot On LA Shelves”, Jerry Hirsch trumpeted in the LA Times. “Sales of high-end wine are plummeting ... the Wall Street meltdown is rippling across the alluvial fields of Napa Valley to the chalky limestone vineyards of Champagne in France...”

Note: Jerry has to explain that Champagne’s in France. Either the location of Australia is obviously too difficult to explain (so we missed out), we just don’t count, or American distributors owe Australian winemakers so much money they’ve rubbed us off the map.

Ridiculously expensive wines – even Bob Parker’s personal favourites - are certainly taking the biggest hit. Mouton-Rothschild ’05 has slumped 50% to $549 per bottle in a few months.

“People are still drinking wine”, Jerry continued. “They are just spending less”. He listed a few examples of people who have cut their wine budgets from $20-$30 bottles to $10 jobs, and quoted the owner of a posh wine shop who went to a the supermarket and bought a big swag of commercial cheapies from which he selected two dozen to “offer in the store as ‘recession busters’ starting from $5.99 for a Fish Eye Merlot ... he then demanded a price break from his distributors so that he could match supermarket prices and still make a profit”.

Jerry quoted another favourite retailer whose sales “were off 28% in October compared with a year ago. November sales are running 16% below last year's figures, even after factoring in a bump-up around the presidential election earlier this month ...”

Wondering about all this, I called my maestro, Roberto, Wine Director at Wine Expo in Santa Monica, who was introduced to me by his former neighbour, Dan Phillips. (No expensive gobstoppers or River cheapos at Wine Expo, though. Roberto won’t stock them.) The LA Times generally raves about him and his store, which you should visit on www.wineexpo.com.

”They interviewed me for that story but I guess I was not telling the story they wanted to write this time”, he said. “We are selling MORE bottles to MORE people but at lower price points.

“Those in the Carriage Trade are getting to eat the cake they baked themselves and finding it is frosted with rat poison”, Roberto said.

“Those of us that have ALWAYS been about alternatives and value for money, travel the world and buy direct, are down somewhat, but not out by a long shot. We want you to be able to buy twice as much wine but spend half as much money with NO compromise in quality and we believe this is not only possible but that it is a lot more fun as well!

“Curiously, with all that ranting about Champagne being dead, we still sell boatloads of high quality farmer fizz in the $40-60 range”, he added.

Australia would have done better selling water to America.

Just one little desal plant, and we could tip the whole of the Gulf St Vincent into California. For a start, they’re short of fresh water. Then, Vince is the patron of schoolgirls as well as viticulturers, and you don’t strike too many California schoolgirls without their bottle of designer water. Call it Great Southern Ocean water. Great Australian Bight Water. Desert Water. Clean Water. Cool Water. Whalesbreath. Shark Bay. To keep ’em thirsty, we could also sell ’em the designer salt we took out of the water. A marketer’s dream!

All the money we wasted on the wine industry – pipelines, perma pine, wire, petrochemicals and refineries - could have gone into maintaining the River.

But we buggered the River by tipping it on the desert sugar quarries we call River vineyards, added some ground-up American oak, some cream of tartar and concentrate, dressed it up in fake aboriginal art, called it something really bloody stupid, and flogged it to America at the smallest margin possible. Brilliant.

There’s a serious challenge here. If our lads can’t tip our bursting wine lake into the USA before the Aussie dollar returns to equity, then they might as well regroup now for the second mighty wave when we flog America our water, unadulterated. I’ll bet Dan Phillips could sell water at $1000 a bottle.

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POSH DROPS ROT ON LA SHELVERY

FROM THE LA TIMES:

High-end bottles languish on shelves as shoppers opt for cheaper vintages. 'The state of the economy' is nothing to celebrate, a retailer says.

By Jerry Hirsch
November 22, 2008

In most years, store manager Diana Hirst considers herself lucky if she can snag six bottles of $265 Araujo Napa Valley cult Cabernet Sauvignon to stock in her Costa Mesa wine shop.

This year she can get dozens -- a sign of how the Wall Street meltdown is rippling across the alluvial fields of Napa Valley to the chalky limestone vineyards of Champagne in France.

Sales of high-end wine are plummeting, wine merchants say, and once-rationed top California Cabernets are in ample supply. The coveted 2005 Chateau Mouton-Rothschild from Bordeaux is languishing on store shelves for $549. That's an astronomical price for less than a liter of fermented grape juice but only half of what it sold for just a few months ago.

And Champagne -- that universal symbol of largess? Sales have plunged because "the state of the economy" is nothing to celebrate, said Randy Kemner, owner of Wine Country in Signal Hill.

People are still drinking wine. They are just spending less.

"I still drink wine with my wife every night, but before I might have bought Santa Barbara County Pinot Noirs for $20 to $30; now I am paying $9.99 for a Castle Rock Pinot from Mendocino County," said Pablo Urquiza, a freelance television producer who lives in Marina del Rey.

He's not alone.

Sales of wine for $9 or less make up the fastest-growing segment of the wine market and sales above that price are starting to trend down, said Jon Fredrikson, a Woodside, Calif., industry analyst.

Consumers are trading down to wine they consider "values," Fredrikson said.

Kemner of Wine Country is trying to get ahead of that trend. Last month he went on a supermarket shopping spree, buying about 50 bottles of mass-market "corporate wines of the type we usually don't sell."

The wine merchant and his staff tasted the wines and selected two dozen to offer in the store as "recession busters" starting from $5.99 for a FishEye Merlot to $14.99 for a La Crema Chardonnay. Armed with his sales receipts, Kemner demanded a price break from his distributors so that he could match supermarket prices and still make a profit.

Kemner hopes the less expensive selection will take off as the holidays approach. Sales at Wine Country were off 28% in October compared with a year ago. November sales are running 16% below last year's figures, even after factoring in a bump-up around the presidential election earlier this month.

"We are working leaner and we are still profitable but we understand that we have to dig around for wines that overachieve," Kemner said.

Hirst also is pushing bargain wines at her Hi-Time Wine Cellars in Costa Mesa. She's looking for lower-priced wines from Spain, Argentina and Chile to fight off the slump in costlier selections.

"Every time the stock market takes a dive we see a few slow days," Hirst said.

Champagne and signature California reds such as the 2005 vintages of Robert Mondavi Reserve Cabernet Sauvignon and Joseph Phelps Bordeaux-style blend are particularly slow even though they are well-regarded wines, she said.

Hi-Time Wine has cut its inventory by about 10%, "and we have not hired for the holidays; we are all just going to work more hours," Hirst said.

Wine retailers aren't the only ones feeling the pain: Consumers are dining out less, slashing wine sales by as much as 15% in restaurants, Fredrikson said. All of this translates to lower sales for California's wineries, which sell wine with a retail value of $19 billion annually. Americans drink $30 billion worth of wine each year.

"Our sales are down about 10%, and I am surprised they are only down by that amount," said Ron Melville, owner of Melville Vineyards and Winery in the Santa Rita Hills in Santa Barbara County.

At Charles Krug, visitors to Napa Valley's oldest winery are spending less, said Peter Mondavi Jr., whose family owns the business. Tasting room sales have held up compared with last year only because the winery has undergone a major renovation and more people are visiting, he said.

As retailers and dining establishments cut back, many small wineries -- which don't produce enough to have a large presence in grocery or other chain stores -- are seeing their inventories bloat. Distributors and wholesalers are cutting orders because they don't want to purchase wine that could take months to sell.

"This creates a real question with tight credit now about whether some of these wineries will have the credit lines available to wait this out," Fredrikson said.

And there are more ominous signs for smaller wineries that sell directly to consumers. Oenophile Urquiza cut back on his membership in wine clubs -- where customers sign up for discounted shipments of wine -- to just one from three.

Still, if you have the cash, the slump has created a unique opportunity to invest in First Growth Bordeaux and Burgundy Grand Cru vintages -- among the elite of the wine world -- said Steve Wallace, owner of Wally's Wine & Spirits in Westwood.

While the price of that '05 Mouton-Rothschild has fallen by half this year, the 2007 vintage sells for less, $383. Both vintages are highly rated by Bordeaux wine guru Robert Parker.

"These prices are from back in the 1980s," Wallace said. "I never thought I would see that."

Hirsch is a Times staff writer.

jerry.hirsch@latimes.com
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