Tuesday, September 18, 2012

Wine collectors are the scourge of wine lovers

Wine collectors are as bad for wine lovers as irresponsible mortgage brokers were for house buyers.

You'd think there would be considerable overlap between the two groups: wine collectors and wine lovers. All wine lovers have some wines stashed away, and many wine collectors genuinely enjoy drinking, not just bragging about, great wines.

In thought process, though, the overlap is less than you'd think. The wine collector position was perfectly stated in a column for Barron's last weekend by Thomas Ryder, the former head of American Express Publishing.

Ryder's column includes what might be the most arrogant statement about wine I've ever read, yet I believe it encapsulates many collectors' views. That statement is why I don't mind Rudy Kurniawan's crimes.

Ryder starts off by talking about how he fell in love with wine, sitting at the table with Paul Draper and Joe Heitz and the like; taking tasting trips to France. Stuff wine lovers do.

Then, this paragraph:

By the early '80s, I'd say I was a pretty knowledgeable collector and confident that I had the right strategy -- "best wines, best years." So, when Robert Parker created a frenzy by calling the '82 Bordeaux vintage the greatest of his lifetime, I was ahead of the rush. I bought multiple cases of Petrus for $50 per bottle, and multiple cases of First Growths for $30 per bottle. 
After that, he brags about his "oceans of 100 point wines," and laments his investing mistakes in wines that -- damn them -- didn't gain value. Then he wakes up and realizes that he has more wine than he can ever drink, and it's time to divest some.

And then, he writes what might be the most arrogant thing I've ever seen written about wine. I reread it a few times to see if he's kidding. He doesn't seem to be:

Sobering enough, but then came the 2005 Bordeaux vintage. With prices for First Growths starting at more than $600 per bottle and going to well over $1,500, I was offended by the sheer arrogance and greed of it. This was less a moral judgment and more an investment thesis. I believed wealthy French wine makers had taken the profit potential from us poor wine collectors, and it infuriated me that they had finally wised up. I shut my wallet. I have not bought another bottle of Bordeaux since the 2003 vintage, and I don't plan to. I prefer safer investments like pork-belly futures at this stage of my life.
See what bothers him? It's not a lament like mine: I once could afford to drink Chateau Latour on a special occasion, and now I never will again. It's that those damn winemakers took away his profit potential. And he actually calls winemakers* arrogant and greedy. Somebody buy this man a mirror.

* A subtle point: he calls "wine makers" wealthy. It's a poor choice of words; what he means is "winery owners." But this is a man who works in words, and if I were a French winemaker, I'd be righteously pissed off.

Ryder later goes on to talk about some specific wines he enjoys, which he won't sell because the resale value isn't that high. Luckily he still has lots of great wines in his cellar that he actually drinks, and he writes,
Our children seem ever more interested in sharing meals with us. 
Collectors are good for some wineries, no question. However, I question whether they're good for the wine world as a whole.

You can make an argument that by taking the most famous wines out of reach for most of us, they've forced consumers to look elsewhere for quality, thus helping other wineries and widening our available choices. You could also argue that profits from top-end wines allow wineries to invest more in technology, improving wines at all levels.

On the flip side, though, investors throwing their money at a few top-end wines have corrupted Napa Valley Cabernets. If you spend $50 for a Napa Valley-appellation Cab from many wineries today, you're not getting anywhere near their best grapes, which are going into their special reserve picked-by-monkeys-with-golden-fingers wine for $300 to some investor who will monitor its auction value.  As collectors discover more wine regions, this will happen in more places.

This "wine as commodity" mentality -- who needs Bordeaux, pork-belly futures are safer -- is the antithesis of everything that wine lovers believe. Wine goes with dinner. Wine should have a story behind it, not just a rating. You don't have to have the greatest wine in the restaurant, because different wines are appropriate at different times.

Most of all, wine lovers believe wine should be enjoyed by being drunk, not by being sat on by Smaug the dragon. Whose kids didn't want to eat dinner with him either.

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Larry Brooks said...

Sad really when you think about it. I used to believe that wine collectors were different from other collectors as they could only validate the collection by opening bottles and sharing them with others. It seemed in some ways more generous, and because of the limited lifetime of most wines less a hoarding activity. It turns out as usual that I have a naive view if it or that it has changed. Luckily this type of collector tends to stay with the safe and boring like Bordeaux and Napa Cabernet, leaving such gems as German white wines alone at least for the moment.

W. Blake Gray said...

Larry: Ssssshhh! German Rieslings, not worth collecting, people. Auction resale value is not as high as pork-belly futures. Stay safe!

Anonymous said...

I believe if you remove the top, say 100 investment wines of the world that these guys fight over at auction, there are 100s of $50-120 wines that in good years are spectacular to drink. Let the 10,000 wine “connoisseurs” who buy for investment purposes have the top end we can drink the good stuff ;)

Anonymous said...

I always had trouble with you not having issues with Rudy K's crimes....largely because you never thought of it as a producer. The producer of the "cult wine" still takes pride in what they do. If someone is faking a label, faking a wine, then there is something false being labeled as something real. The Gray Report isn't Melville or Faulkner (sorry....its actually more understandable than Faulkner, but whatever) but if someone wrote a blog and labeled it as The Gray Report you'd be pissed off. And rightly so...But seemingly you didn't consider that POV.

Adam Lee
Siduri Wines

W. Blake Gray said...

Adam: Rudy wasn't faking wines that producers were trying to sell. He was faking wines that were sold by producers long ago.

People have stolen my work here, and it does royally piss me off. But if there was an auction market for my older work that I'd already been paid for, I'm not sure I can get my head around that as an analogy.

CCDV: I'm with you, though my one taste of DRC Montrachet had that mournful quality of being my one taste ever.

Cabfrancophile said...

On one hand, collectors are driving some wines I'd like to drink out of reach. But on the other hand, my favorite wine shop would not be able to survive just selling a few bottles per month usually around $25 to folks like me. They subsidize my modest consumption with their excessive purchases.

If anything, this is indicative of the larger societal economic disparity. If the 1% wasn't hoarding most of the wealth, then there would be more middle class wine buyers who would be willing and able to buy above the bargain basement prices. As long as the gross wealth disparity is maintained, middle class wine drinkers will have to accept this unpleasant mechanism of subsidization.

Erika Szymanski said...

The collector phenomenon bugs the heck out of me, too, and makes me wonder why collectors can't just play auction ping-pong with pretty bottles full of colored sugar water. Or cranberry juice. It's enough to make me want to take an economics class.

Anonymous said...


That's actually how plagirism works....someone gets paid for work that belongs to someone else, that someone else has (usually) already been paid for. And its a crime, because the work has value to the producer, even if they aren't getting paid for it again.

Adam Lee
Siduri Wines

Man About Wine said...

REgarding plagiarism compared to re-selling odler wine. I don't see the difference. Rudy K. was a thief, fraud, liar, from the get-go it seems. He needs a long time on a road gang in Mississippi. As for the main point, a pox on the lout who thinks he will buy up more wine than he can drink and then is mad at the wineries. I almost want to say I hope he chokes on a piece of cork, but I won't go that far for being a lout, but not a criminal.

Man About Wine said...

Adam, do you think that Blake is OK with stealing from rich people but not from him?

DCJaded said...

I think you are conflating wine collectors and wine investors. They are 2 different things. I mean, if you are buying wine to set down for 10 years, its just common sense to buy extra to auction off later to pay for what you drink.

McSnobbelier said...

Blake, I too read the original article and was a bit shocked at how forward his comments were about the producer taking his profits away from the collectors.

I don't think the producer should be ashamed to take some of the profit off the table... aren't there enough fingers in the "pie" without adding in some investors. The metrics of the wine industry aren't that much of a home run for wine makers in the first place.

Fabio said...

Thankfully, that wine world you describe in your post, inhabited by Collectors and Investors and no doubt other fearsome creatures, orbits a different star from the one I live in! :)

ojsaito said...

Though the man is in the words business, he is a publisher and not a writer, which is good for him. Presumably not intentionally, his smugness is tempered only by some truly cringeworthy lines in the article. "We had enough great wine for several bottles a day for the rest of our lives, an opportunity which, if acted upon, would substantially shorten the time we had left on this earth." WTF!!! I have had the opportunity to taste some wonderful Cote Rotie in my lifetime, but never "Cote Roti." I hope they're from Rhone... Ultimately, though, we have to remember that the audience of Barron's is people focused on financial returns, and the second half of the article focuses on storage, tax, shipping costs which may be useful for whomever may be thinking of wine as an investible asset class. Thankfully for us wine lovers out there, it had a somewhat negative spin.