Price Rises for Margalit Wines in the USA

[Daniel Rogov]

One of the necessary albeit not always pleasant tasks of the critic is being called upon to call to order various wineries, importers, stores and distributrors and to question the prices of various of their wines. The following is excerpted from an email just receivedf from forum member Richard Shafer of Israeli Wine Direct in the USA

One of our flagship brands - and in fact the first boutique winery in Israel - is Margalit winery, headed by father-and-son team Yair and Assaf Margalit. The grapes in Margalit wine come from the Judean Hills (the mountains surrounding Jerusalem) and the Upper Galillee - the best grape-growing areas in Israel today.

Margalit is widely viewed by wine critics and consumers as among the top wineries not only in Israel but in the entire region.
There are very few bottles remaining in the US from our first shipment. We imported less than 15 cases of each of 2 wines from them....there remain less than 10 cases of the Cabernet Franc 2005 (Margalit is the first great Cab Franc producer in Israel) and 6 cases of the Enigma 2005 red blend.

Given the high demand and small supply of the wine, prices of Margalit wines will rise significantly in our portfolio before the end of the year.

I will not disagree that the Margalit wines have consistently been among the very best of Israel since the winery first opened and that the two wines in question are no exception to that rule. Nor will I disagree that the wines compete comfortably in quality, complexity and aging potential with many truly excellent wines of France and North America. What I will question, however, is the wisdom of raising prices at this point in time.

As discussed earlier on the forum, many were shocked at the 35% increase of prices of the Margalit wines from the 2005 to the 2006 vintages. I was not among the shocked and that because (a) the winery had not raised prices in quite some years and (b) I felt that the wines were good enough to demand the prices being asked.

Considering the feedback received, however, and taking that together with the comments of many critics abroad that despite their excellence, Israeli wines tend to be overpriced, I do question the wisdom of any significant rise in prices of these wines in the USA. Considering that the two wines being offered …..the 2005 Enigma and the 2005 Cabernet Sauvignon are already priced in the USA at US$ 55 and US$60 respectively, I dread seeing to what level those significant increases will take them.

Opposing views (including those from Richard) will be appreciated.

Best
Rogov

[RShaffer]

Thanks for the note!

I'm off to an Israeli wine party in Cleveland with the head of the Cleveland Wine School providing commentary as well to the wines in our portfolio we'll be tasting so I'll be brief for now!

First, I have worked VERY hard at the portfolio level (and so have the winemakers) to keep wine prices in our portfolio reasonable. For instance with brands like Pelter and Flam, we initially ONLY imported their more value-oriented lines. We should not look at wine prices in total isolation I think - I know I do not - we are trying to build a full portfolio of wines that will be accessible for various audiences.

(The restaurant in NYC who just purchased Pelter and Flam wines from us (Barbounia) called me two times to question me on the pricing, telling me it was too low, couldn't be right, as compared to other Israeli brands he was finding. I really got a great kick out of this!)

Second, we don't know yet what the new Margalit prices will be - not settled yet and may not match the price increases you have seen in Israel given my pricing philosophy above. The price of the wines already here will NOT change - we are talking about future orders. (I wish now I had not used the word "significant" in the email since I do not yet know where the prices will land). Also keep in mind we are talking about a VERY few number of cases in the US market - I ordered 15 cases each of the Cab Franc and Enigma 2005 - and a fair amount is already gone in less than 3 months sold to private consumers and a Chicago restaurant so far. We have barely begun to market these wines to the trades. The Chicago restaurant buyer of the Cab Franc bought the wine on SMELL alone - and only tasted it after I asked him to! Candidly, the market will bear for these exclusive allocations our current prices and even somewhat higher - some customers tell me these wines are a STEAL.

Third - and here's the secret sauce behind our team effort which I insist on with wineries I work with...Yair and Assaf and I have agreed that from any additional revenue THEY make will come funding for them to both seperately visit the US market every year to tell their story and introduce Americans not only to Margalit wines but to other Israeli wines in our portfolio! Golan Flam has already done this - he presented his own and other Israeli brands publicly with me.

(As an aside, a set of our core wineries are meeting TOGETHER with me to build marketing plans for the entire portfolio and to calendar activities for the next 24 months as a team! Has this ever happened before and been acted on?) We cannot wait for the Israeli Govt or anyone else to do ANYTHING around making wine a positive entry for outsiders into the real Israel - we have to make it so! This is our time.

Gotta run or I will be late - but I welcome comments/questions/suggestions. I really do want to hear from people on this...and on everything really.

Richard

[Menach N]

Rogov hi,
can you please post your TN on the Margalit wines mentioned above ?
Please and Thank you !

Menach

[Daniel Rogov]

Menach, Hi....

Following are my most recent tasting notes for the wines in question.

Best
Rogov

Margalit, Cabernet Sauvignon, 2005: Deep garnet towards royal-purple, medium to full-bodied, with soft but gripping tannins and fine balance and structure. Opens with red currant, raspberry and red plum fruits, those yielding to blueberries and appealing earthy-herbal overtones with gentle spicy wood on the long finish. Best 2009–2015. Score 93.

Margalit, Enigma, 2005: This medium to full-bodied blend of Cabernet Sauvignon, Cabernet Franc and Merlot (60%, 22% and 18% respectively) shows generous cassis, raspberry, and cherry fruits, those matched nicely by caressingly soft tannins, lightly spicy oak and chocolate, all coming together elegantly on a long and mouth-filling finish. Drink now–2013. Score 93.

[Menach N]

Thank you !!
can you pls add the cab franc 05 as well ?
pls & thnx
Ciao
Menach

[Daniel Rogov]

Menach, Hi....

Following is my most recent tasting note for the wine in question.

Best
Rogov

Margalit, Cabernet Franc, 2005: Dark cherry towards garnet and full-bodied, this round and polished wine shows abundant blackberry, currant and black cherry fruits, those matched nicely by hints of spices and cedarwood, all leading to a long, generously tannic finish. Elegant and faithful to the variety. Drink now–2013. Score 92.

[Menach N]

Thank you Rogov !

[Michael Greenberg]

I have already posted that the MARGALIT ENIGMA 2006 made the Vintages Classics Collection catalogue for September 2008 here in Ontario (Canada) ...Vinatages is charging $98 cdn a bottle--of course when you order from these special Classics Collection offerings you don't know if you will get your entire order-I ordered 7 different wines (1 bottle each) from this offering--going by past results i'll probably end up with 5 --maybe 6 of them if I'm lucky---I'd be shocked if the Margalit Enigma 2006 was not one they send me because I don't think that at $98 there willbe much over demand for the limited supply--but we shall find that out by late September when they confirm what I willbe getting...