Cork vs screwcap 2014

June 3, 2014
by Christian
in Opinion & Analysis
with 20 Comments
Cork. Good enough for these guys...

Cork. Good enough for these guys…

The defining moment of my recent visit to Portugal to assess the status of the cork industry was a graph depicting the total closures market for the last 10 years. Cork remains the market leader by far and furthermore it has been regaining market share since 2010 after being in decline from 2004 to 2009. Whereas the switch from “old” to “new” technology when it comes to sectors such as photography and music has been emphatic, it would appear that cork is going to be around a while longer.

Antonio Amorim, president and CEO of Amorim, the world’s largest cork company explains how the market breaks down: there are 28 billion litres of wine produced annually, half of which is not relevant as it doesn’t end up in a bottle. Of the approximately 18 billion bottles of wine produced annually, 12 billion end up under cork, four billion under screw cap and two billion under plastic.

A major problem for the cork industry is that it is hugely fragmented. There are currently 267 members of the Portuguese Cork Association and not all are “equally committed” to quality control to quote Carlos de Jesus, Amorim’s director of marketing and communication.

Amorim sold 4 billion corks in 2013, equivalent to a 32% market share and it is estimated that the nine next biggest producers would have a further 30% market share, which means a myriad of smaller producers fighting over the remaining 40% or so of the market. In this regard, it is curious to me that winemakers feel that they must use multiple cork suppliers in order to “spread their risk” when they could being dealing with the market leader who is ready and willing to be held to account.

How to get the “cowboys” out of the industry remains a perennial headache for Amorim – a code of good practice that producers are supposed to abide by is not as tight as it would like while the Portuguese government is keen to check its power lest it further dominate the market.

According to Joaquim Sá, managing director of Amorim Cork SA, cork has a total market share of 40% and screwcap 60% locally but this changes for reds retailing for over R60 a bottle – 60% bottled under cork. “No single closure works for every wine on the market,” says Sá.

As for the incidence of TCA, Amorim reckon they’ve got this down to approximately 1%. “We can’t deliver perfection but we can put solid risk management policies in place – just like any other industry,” says De Jesus. Amorim spends €6 million a year on R&D relative to €324 million in revenue from wine stoppers and the next innovation in the pipeline are Individual Detection Machines using state-of-the-art gas chromatography technology – 10 million corks each tested as 100% TCA free by March 2015, these destined for the very top end of the market.

When it is suggested that based on experience in the field, the incidence of TCA remains at around 5%, then the stock response from Amorim is to blame other sources, whether these be tainted barrels or even municipal water. Is Amorim being disingenuous here? I think it has to be acknowledged that at least some wines sent back in a competition environment have faults which are not cork related but the result of sloppy winemaking, cork nevertheless ending up the convenient scapegoat.

In terms of making sense of the closure debate, there also a significant political element which tends to get overlooked – it is often argued that Australia and New Zealand’s eagerness to adopt screwcap is proof of how progressive their respective wine industries are but bear in mind Australia is the world’s sixth biggest aluminium producer – it would be naïve to think that the mining companies involved aren’t lobbying the wine industries of the region to choose screwcap over cork, just as Amorim aren’t wining and dining SA wine journalists in Portugal out of the goodness of their hearts.

If you believe in capitalism, then a gain in market share ultimately comes down to the fact that there’s a lot going for cork. Perhaps the most fascinating part of the visit was time with Miguel Cabral, Amorim’s research and development who makes the case that cork is not simply a benign closure (when TCA free) but actually has a positive impact on how wine develops. He quotes research that wine under natural cork develops most favourably relative to screwcap, conglomerate cork and plastic. Of particular interest, it seems that 1) natural cork releases oxygen into the wine from its own cells rather than from outside and 2) wines under screwcap can show increasing levels of reduction post-bottling.

What Cabral now hopes to demonstrate is that cork releases phenolic compounds into wine which have a beneficial effect on the ultimate drinking experience. If he can produce compelling evidence in this regard, then cork might have a meaningful competitive advantage over other closures.

Ultimately, there is no simple answer as to what wine closure should prevail. In pure performance terms, TCA remains cork’s fundamental drawback but we shouldn’t gloss over the problems of reduction associated with screwcap. Then there are social and environmental issues to do with cork farming which might not be of direct concern to the wine enthusiast at the moment of consumption but are hardly irrelevant – I, for one, would prefer not to see two million hectares of cork forest done away with in favour of more aluminium mines.

The debate will no doubt continue because it’s something wine geeks like to get worked up about but really isn’t it time we moved on? The failure rate is way down and while you could argue that it will only be acceptable when it is nil as is the case with brake pads and parachutes, the truth is that unlike brake pads and parachutes, no lives are at stake. Instead, we once again bombard the consumer with scientific jargon and then are disappointed when they stick to beer.

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20 Comments

  1. BernardJune 8, 2014 at 9:48 amReply

    Chaps…. the wine industry is a business. Every serious producer knows and understands his own target market. Trust me when I say that not one serious producer or marketer will be influenced by this debate other than the competition between cork and screw-cap is good for business. If either cork or screw-cap producers slackens on their quality, price points, service or supply chains…. they will loose market share.

    Wether y’all are trying to out-clever one another by arguing about who owns what, or who has an interest in what, is really of no consequence. The producers of wine run this industry, not the “opinionistas” ….

  2. Michael FridjhonJune 6, 2014 at 6:17 amReply

    Christian, just to put your outrageous claim about aluminium producers to bed once and for all: the annual world production of the metal is 47 billion tonnes. According to you, the annual world usage of Stelvin is 4 billion units. That’s over 10 tonnes of aluminium for every single Stelvin sold. Given these proportions, I’m having trouble seeing aluminium executives wasting their time being nice to Australian winemakers.

    • ChristianJune 6, 2014 at 6:45 amReplyAuthor

      Hi Michael, I can’t say for sure how close the relationship between screwcap manufacturers and Aussie winemakers is but it is curious that Rio Tinto Alcan, the global leader in aluminium mining and production, felt compelled at one point to buy the French company that originally came up with Stelvin…

      • Michael FridjhonJune 6, 2014 at 10:28 am

        Christian, you really have your facts screwed up. Rio Tinto Alcan is a Canadian, not Australian, company and it developed Stelvin which it then sold to Amcor, an Australian-listed company. Your new best friends shouldn’t be feeding you this rubbish.

      • ChristianJune 6, 2014 at 11:01 amAuthor

        While Rio Tinto Alcan is nominally Canadian owned, I’d be more inclined to see them as a multinational corporation with significant operations in both Australia and New Zealand. That Australian-based Amcor now owns Stelvin hardly makes them a neutral party in this debate. Amorim’s not feeding me anything – I just think that Portuguese universities are going to get the sort of research grants that compel them to find in favour of cork and Antipodean universities in favour of screwcap. That’s just the way the world works.

      • Michael FridjhonJune 6, 2014 at 1:36 pm

        Christian – you really don’t know when to quit, do you? Alcan has never been Australian owned, nor is Rio Tinto. You can “prefer” all you like but it doesn’t change the facts. If you need to sell 10 tonnes of aluminium for every stelvin capsule that finishes up on a bottle of wine I imagine your sales efforts will be directed elsewhere than the wine industry.

      • JamesJune 6, 2014 at 6:56 pm

        As far as I can see total global aluminium production in 2013 was 49.7 million tonnes. With an “m”. That equates to a little over 12kg of aluminium per stelvin closure i.e. the weight of 8-9 bottles of wine rather than 5 or 6 mid-sized sedans.

    • Michael FridjhonJune 6, 2014 at 9:38 pmReply

      James is correct – 49 billion kgs, 49 million tonnes. Either way, only for a brief period in the life of the Stelvin business has it been owned by an aluminium producer – who actually sold the operation just as Stelvin usage was taking off. That pretty much says it all.

  3. Michael FridjhonJune 5, 2014 at 11:55 pmReply

    It seems, Christian, that Amorim got good value for their 30 silver escudos. When someone as intellectually rigorous as you normally are tries out the line about the Australian aluminium industry driving the case for Stelvin, it’s hard to fault the value in their PR spend. Based on your glib and totally unsubstantiated assumption, it’s only a matter of time before everyone on Australian Masterchef has to use aluminium foil at least once in every programme.

    Amorim believing they have TCA taint down to 1% is like Jacob Zuma believing that the HIV risk evaporates after a shower. Wishful thinking is not reality – on which subject, where is the peer-reviewed hard evidence of Mr Cabral research, or the actual 10m corks tested TCA-free (March 2015 being a date in the future – at least where I live)?

    I have no problem in your accepting Amorim’s hospitality, just as I remain open to the prospect of taint-free, oxidation-free cork closures. Your compromising on verification and assuming that aluminium producers (for whom Stelvin is an incidental beneficiation whereas cork closures are a key product for Amorim) are wining and dining Antipodean winemakers – without a shred of evidence to support the allegation – suggests to me that you’ve paid too much for your free trip.

  4. EmileJune 5, 2014 at 6:31 pmReply

    Christian re your declaration to Tim: Besides the Frankfurt beers, are you sure it was not you who paid for my prego outside the night-club in Mealhada? Just checking. It was a long night.

  5. KwispedoorJune 4, 2014 at 12:15 amReply

    Hi, Christian
    Where does Diam feature in the stats that you’ve provided in the second paragraph?

    • ChristianJune 4, 2014 at 7:18 pmReplyAuthor

      Hi Kwispedoor, According to Amorim, out of the 12 billion wine stoppers made from cork sold per year, Diam (French) and Neutrocork (Amorim’s answer to Diam) are estimated at 700 million each.

      • KwispedoorJune 4, 2014 at 10:03 pm

        Thanks!

  6. Tim JamesJune 3, 2014 at 9:27 pmReply

    At least no-one could argue that the cork industry’s PR spending is not effective. Surely, Christian, in the interests of transparency, you should explicitly acknowledge in your fulsome article that your “recent visit to Portugal to assess the status of the cork industry” was hardly funded by Stelvin, nor bombarded by pro-screwcap propaganda?

    • ChristianJune 3, 2014 at 10:04 pmReplyAuthor

      To make it utterly explicit, all travel, accommodation, meals and drink were courtesy of Amorim. Bar the beers at Frankfurt Airport while waiting for Flight LH 572 back to Johannesburg – 5.50 Euro (approximately R80) per 500ml.

  7. Anton PispekiJune 3, 2014 at 7:43 pmReply

    Opening a 20/30 year old bottle of wine with a screwcap on, is like watching Mona Lisa at McDonald’s.

    • KwispedoorJune 4, 2014 at 12:13 amReply

      I think we’re all with you there, Anton. But what if the 20/30 year old bottle’s cork crumbles completely upon opening after decades of saturation? Or let in some air (for whatever reason and for whatever time span) over the years to produce a flat, oxidated wine? Or provides the presence of TBA or TCA, rendering the bottle spoiled? Is it better to take a peek at the Mona Lisa through muddy glasses or after someone spilled thinners all over it? Or would you rather have an untainted look at it in a McDonald’s? The loss of a treasured old bottle of wine is almost unbearable to me. I’ll forfeit a few seconds of a romantic extraction procedure for the multitude of beauty and romance a well-matured wine in good nick offers, any day of the week. That’s not to say I ultimately support a particular closure absolutely (though I really don’t like the plastic closures) and the closure issue is to a certain degree moot – but I just wanted to offer the other side of your analogy.

    • Grant DoddJune 5, 2014 at 3:15 amReply

      Surely the drinking part is of more importance than the opening? I don’t have a dog in this fight, I’m just tired of prematurely oxidized bottles of expensive wine when I have no hope of recouping the cost. All power to the cork industry if they can correct this inefficiency, but I’d like to see the evidence first.

  8. GrantJune 3, 2014 at 1:43 pmReply

    I probably open 300+ bottles ( conservatively) of Australian wine sealed with Stelvin closure each year. I can’t recall the last time I found one that was reductive. Reduction is a wine making issue, not one caused by stelvin closure.

    In 2016, the AWRI will release its twenty year study into closures, opening and analysing multiple bottles of 1996 vintage wine closed under every closure available to the market. The key point that I took out of the 10 year preliminary testing ( conducted in 2006) was the variation and inconsistency that cork showed in controlling the amount of air that was allowed into individual bottles. In fact, a 1000 time variance from the best cork to the worst in this particular study. It’s a subject that needs more attention, and one that is rarely addressed by the cork companies.

  9. Melvyn MinnaarJune 3, 2014 at 12:42 pmReply

    Well summarised, and pretty much my take too on the experience. Call mine ‘enlightened’.
    I think the point here is that ‘fragmented industry’, applicable both to cork and, locally, wine. The ‘cowboys’ here who buy the cheapies and don’t care are as much to blame as those that sell them.
    We should, indeed, move from absolutes as far as closures are concerned, and engage in those more interesting discussions.

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