Tim James: Is a market correction on the way for top-end SA wine?

Last year – 2017 – seemed to me marked by a sudden leap in the prices of upper-end local wines. Or had they been creeping up for a while and suddenly the shift became qualitative rather than quantitative? The result is the same: lots more wine I can’t afford. Late in the year, reviewing a good but not notably distinctive new chenin selling for R240, I felt impelled to wonder “how many expensive Cape chenins the market – both local and international – can bear as yet” (see here).

Not an easy question to answer until we see what the coming years bring (sadly, I predict more failures of the type that saw, for example, Tim Martin Wines folding during the year); but a little basic research seemed opportune, taking chenin as my example. I confess astonishment at what I found.

Approximate retail price: R865 a bottle.

First I looked at the online list of Wine Cellar in Cape Town, a retailer tending to specialise in the new-wave end of business: more Swartland than Stellenbosch, let’s say. My quick survey found little under R100; 17 wines between R100 and R200, eight in the next R100 bracket, and a surely surprising 10 over R300 (from Radford Dale Renaissance of Chenin and Keermont Riverside at R320, up to Reyneke Natural at R865). Interestingly, I thought, the pattern was pretty similar to chardonnay’s.

Then I turned to Caroline’s Fine Wines with, I guess, a slightly more conservative clientèle and probably more tourists. A touch pricier, but a rather similar pattern. Compounding my earlier surprise, there were a number of further wines over R300 – from Botanica Mary Delaney at R313 to Ken Forrester Dirty Little Secret 2015 at R1081.

A quick look at a supermarket in a posh area (Pick n Pay, Constantia) also showed parity between chenin and chardonnay, rather more examples of both on the lower shelves, and fewer – but certainly a handful – over R250.

Given that a few expensive, small-release, quickly-sold chenins – including some Sadie, David and Nadia, Alheit – were not listed on either website, I reckon it would be easy to compile a list of over 20 local chenins selling for over R300, probably half of them over R500. They inevitably cost more, sometimes much more, in foreign markets – Reyneke Natural is nearly 60 quid in London (for this money you could buy a pretty decent bottle of white burgundy).

I don’t venture that many of those are over-priced, but a little caution seems advisable when insisting that Cape wine at the top end is seriously underpriced.

And, despite all the hype, expensive chenin is not an easy sell locally, as Wine Cellar’s James Pietersen confirmed. While he reckons that “the R150ish space … will continue to bring SA its best value wines from purely a quality perspective”, he does say that wine “quickly stands still on the shelf” once you start moving towards R300, “especially if there is not enough hype, scarcity, quality/perceived quality etc”.

What’s more, I’ve been talking only of straight chenin blancs, not including chenin-based blends. If you want a local index of how difficult it can be to sell very expensive whites, you could start at the continuing availability of excellent Mullineux single terroir chenins (R535 at Wine Cellar). And what about cultish Cartology? Plenty of it still on the shelves at a mere R305. Even the chenin blend with the grandest pedigree of all, Palladius, is available (2015 an even merer R725, given its magnificence and limited quantity). That ultra-pricey Ken Forrester Dirty Little Secret 2015 has been at Caroline’s for about 18 months now; no sign yet of a 2016 follow-up.

Let’s see what happens to prices this year. One interesting twist might come with the release of top-label dryland chenins from the drought-stricken 2017 harvest. Will there be market resistance if quality proves somewhat lower (though quantities might well also be down)? Will prices for such wines continue to rise at the rate they have been in recent years? How many more smart new chenins will emerge and will they sell in viable quantities? Interesting wine-times indeed.

• Tim James is founder of Grape.co.za and contributes to various local and international wine publications. He is a taster (and associate editor) for Platter’s. His book Wines of South Africa – Tradition and Revolution appeared in 2013.