Why I read the WSJ

The question "why do I subscribe to the WSJ?" is a legitimate one since I have no money, tend to be slightly to the left and am not smart enough to understand financial markets. But the excitement comes from getting the Friday paper and reading the Gaiter and Breecher wine article over a bowl of Quaker Oat Squares piled high with raisins from Trader Joes. The articles always compare wines with a common theme, rate them with no points but words like delicious, very good or good. They promote wine drinking not wine snobbery. I have on several occasions bought their #1 recommendation as in the time the recommended the '05 Chave Cote du Rhone.

This week's article had a holiday theme. They selected a case of wines as a gift to a friend that drinks white zinfandel but they felt needed to have their palate expanded. The case came in at just under $150 and included 5 whites and 7 reds with no grape being duplicated. Interestingly their were 4 from Italy, 2 from France, 2 from Chile, one Argentia, one US, one German and one Austrian. The most expensive was a $16 Chile cab and the least expensive was a $7 Sauvignon Blanc, the same producer as the $16 cab.

Ineresting observations
1) We complain about the recent decline in the $ to the Euro but 8 of the 12 were from Europe
2) Where is OZ? Have we had enough of animal wines and goofy names?
3) Several low profile wines, malbec, primitivo, nero d'Avola, gruner veltliner and barbara. Sure we know them but the average drinker probably has heard of one at the most.
4) No chardonnay, have we had enough of this oak and butter wine? Disclaimer: my favorite whites are Chablis but hard to find for $12

Great idea for a gift and in fact I gave my "white wine loving" mother who knows nothing but Chardonnay a 2 bottle a month gift package from my cellar.
Walt

Walt, is there a link?

Walt, is there a link?

Bob,
I don't know but maybe our forum historian Bob Ross can help. The issue was not the exact wines selected but the fact that there are many wines that are interesting in the $10 range and many are from Europe and interesting grape varieties.

The wines mentioned were:(probably misspelled some)
Graville-Lacoste '04
Concha y Toro SB '05
Loewen Leiwener Klostergarten Riesling '05
Franz Haas Pinot Grigio '05
Hirsch Gruner Veltliner '04
Concha y Toro Marques de Casa Cab '04
Navarro Correas Malbec '04
Terre Nero d'Avola '03
Cline Syrah
Ch Roquefort '03
Terre Primitivo '03
Michele Chiorlo Barbara '04


Walt

Sound like my kind of people!

[Jenise]

Walt, I'm reading their book "Wine by the Glass" right now. It's totally charming.

[James Roscoe]

The WSJ is a "members only" site if I recall. It costs a fairly hefty subscription to get on the site. Fortunately I have a friend who cts the article out for me every weekend. I love reading thei stuff. They are among the people who have made wine drinking understandable to me. I don't always agree with them, but they are fun to read. It would be fun to see them more visible in the "wine world."

1) We complain about the recent decline in the $ to the Euro but 8 of the 12 were from Europe

Walt:

When the dollar fluctuates against the Euro, the effect on the price of wines in the US is not immediate...well, at least not usually.

The price you are paying for wine on the shelf right now is based on what was imported/purchased months ago.

Here's how it works: Big Ass Importers negotiates to purchase and ship from Winery A in France, based on prices quoted at the time. Shipment arrives a month later. Price is posted to the distributor based on Laid In Cost (cost plus shipping, taxes, etc.). Distributor takes his cut and prices to the buyer. Buyer takes his cut and passes along the price to the consumer.

But the price starts with what the Importer (our friends at Big Ass I.) originally paid for the wine. Not what the wine would cost if BAI bought it right now with a stronger Euro. So when you buy Winery A's great Vin Jaune from BAI and you pay $6.99 for it, you're happy. It's when you go back six months later and find out the very same wine is now $12.99 that you get into rant mode!

Gaiter and Brecher were quoting prices they saw in the market right now...and those are based on what was purchased three to six months ago, not on what they might cost were BAI buying them right now.

Actual case in point: not terribly long ago I was privy to some discussion about some South African wines. When discussions started, prices were very attractive, and the importer figured they could sell them for about $8 retail, which was great QPR. But during negotiations, the money market fluctuated and at the same time there was a price increase on SA Sauv Blanc due to scarcity (the old agricutural thing, plus market demand). By the time the wine actually got purchased and arrive, the price at retail was more like $11.00. Still good, but not breakout good at that price.

So either margins get reduced (and that is almost always at the importer's expense) to keep the volume expectations up, or you lower your expectations of volume and change the focus of your marketing efforts. Or give up and go home with that particular project.

In addition to what Hoke said, many importers will maintain positions in foreign currency to hedge against weakness in the dollar. Again, this only serves to delay the impact, but in short-term it can ameliorate the impact on consumers.
Bill

Good point, Bill.

Most every importer/distributor I know also plays the sometimes profitable/sometimes dangerous game of floating their payments out as long as they can, arranging for up to three months to pay for a container of wine, then watching the market closely, trying to figure out when they can eke out a little more profit out of the deal.

Of course, when they guess wrong, they have to walk into the corner office to tell the big guy how they screwed up and guessed wrong.

When I was in retail I would arrange for an importer/distributor to bring in some exclusive items for me--to clear them, for an agreed upon price. I would pay immediately upon delivery. But then I'd get complaints from the wineries that they weren't being paid, so I'd have to call up the distributor and beat him about the head and shoulders to get him to pay up. Every single time it was a case of the guy floating the payment trying to squeeze a few cents more out of the deal. Which was cool---unless it impacted on my credibility! Then it became an issue.

I'm reading their book "Wine by the Glass" right now. It's totally charming.

Jenise, is that the full title of the book? I've searched for it at Amazon and on Google, and can't find it.

Carl

I read the Journal. The almost complete break between the news side and the editorial side is amusing, but I think it's the best news-paper in this country.

Gaiter and Brecher have a great attitude towards wine, ie they think it should be informal and fun. They used to have a very cavalier attitude towards accuracy (suggesting that Chateauneuf is Syrah-based, for example), but they are getting more careful. I like the fact that they are promoting more unusual wines.

[Jenise]

Carl, it's titled Love By The Glass.

The question "why do I subscribe to the WSJ?"

Because it is the second most liberal rag in the U.S.?

I must confess that I do enjoy the science page of the NYT, the most liberal rag in the U.S.

The almost complete break between the news side and the editorial side

What's funny is how defensive the news-side can be, trying to distance themselves from the neanderthal editorial element.

The question "why do I subscribe to the WSJ?"

Because it is the second most liberal rag in the U.S.?

I must confess that I do enjoy the science page of the NYT, the most liberal rag in the U.S.

You need to forage farther from your cave. You're missing quite a bit.

You need to forage farther from your cave. You're missing quite a bit.

My wine cave and I are quite happy -- no far left wines allowed -- too lean and shrill.

Bill,

I agree with the delay in contract prices reaching market and with a varying exchange rate, hedging is definitely the way to go with large contracts. Either way, somebody along the way is willing to accept a smaller profit in order for the position issuers to either make or lose money.

Also I suspect that if that same box of wines was priced out three years ago, it would have come in well under $150. I'm sure we could all come up with examples of how to do this well with our personal under $10 favorites that would have had the same profile. If the US dollar fell let say 30% versus Euro during these three years, then we just have to fit it under about $105 for the case.

One of the most important effects of the foreign currency exchange on fine wine pricing is that wine bought from Europe five years ago was paid for with a much stronger dollar than wine bought today ($0.9/Euro as opposed to $1.32).

Yet another reason to buy wine with some bottle age.