Marthélize Tredoux: Picking apart price
By Marthelize Tredoux, 22 November 2017
Let’s face it: it was inevitable that I would sit down and hurl my R0.02 at the latest wine industry windup. Two local winemakers (pick your own adjective here: creative/ambitious/cheeky/gutsy/ridiculous/insane) just released “the.” – a 2014 Cabernet Franc at a cool R5 000 a bottle. Oh and you can only purchase it in packs of three – so that’s essentially R15K a pop. “One to keep, one to drink and one for a friend” or something like that.
Oh my. What a kerfuffle. Outrage. Excitement. Disbelief. More outrage. Hints of delight. Visions of a utopian new world – ushered in overnight – where all South African wines reach their deserved price and our industry soars to greater heights than ever.
Ok, ok. I’m being dramatic.
But damn. So is that price tag.
Already the industry has chosen sides in the battle of opinion, with some declaring this the way forward to getting South African wines fetching longed for higher prices and the rest expressing various levels of indignation.
Before we delve, it is worth a quick glance at what typically contributes to the high prices of super-premium wines. For the uninitiated, this is not an exact science by any means. The laws of supply and demand are at play, mixed in with marketing and profits and clever maneuvering on the part of the players involved in putting the wine into the market.
Overall though, it’s fair to say a couple of key factors typically provide the support for astronomic wine prices: small production size (this feeds into exclusivity, which usually comes at a premium), old or otherwise unique vineyards (terroir typically mentioned here), production costs (e.g. hand picking and sorting/ use of new French oak etc.), pedigree and reputation (the most obvious but still best example to use here is Bordeaux First Growths or Burgundy Grand Crus).
Now, back to the phenomenon at hand.
I could not find a media release about “the.”, so I don’t have much to go on.Collaboration between Brian Smith (Elgin Ridge) and Niels Verburg (Luddite). Single vineyard in Bot Rivier. 900 bottles. That’s about all I know.
Oh and shoddy packaging. Don’t get me started on the design and execution there – or do, and we can discuss it in the comments.
At the launch, it was put up against a 2013 Chateau Mouton Rothschild and a 2013 Chateau Margaux and by most accounts it held up very well. Christian Eedes scored it 93 and Greg Sherwood MW waxed lyrical about it, plopping a grand score of 96 down. All good signs that at the very least, the content inside the bottle is worth taking seriously.
But R5 000? Well, R15 000 if you consider the obligatory 3-pack purchase option.
In an effort to understand the rationale behind the price – I compared some of our other high-priced and highly valued offerings. And yes – before someone pelts me with the argument that you cannot compare price and scores directly, I am aware. Thank you. What I’m doing here is trying to provide context within a sample subset of comparable wines to see if this new offering fits.
I started looking at the higher-priced offerings, like the 4G 67 Imizuzu (R5 600) and the De Toren Book XVII (R2 500). Both encompass most of the elements that typically underpin such ultra-premium pricing – limited production, exceptionally intensive and expensive production costs, well established demand for the exclusive product, pristine packaging, etc.
Then I dialed down the price point and looked at arguably some of our most highly valued – if not priced – wines. There’s the MR de Compostella 2015 (R1 150) – scored by Tim Atkin 96/100, Greg Sherwood 96/100 and Christian Eedes 94/100.
With the IWSC results just in, it is worth looking at three-time World Winemaker of the Year Abrie Beeslaar’s offerings. There’s the Kanonkop Black Label Pinotage. The current vintage (2016) sells for R1 750 per bottle, and the 2015 garnered a 96/100 from both Tim Atkin and Greg Sherwood. It sold for R1 590 at the time. The Kanonkop Paul Sauer received the same score, and is available at a modest R550 per bottle. Abrie’s own Beeslaar Pinotage 2015 was Tim Atkin’s ‘Overall Red Wine of the Year’ in his South Africa Special Report 2017, and that sells for R460 a bottle.
You can continue this analysis by looking at players like Sadie, Mullineux and the like. The pattern to me seems to be the availability of highly rated wines with an established track record at less than half the price.
I’ll be honest, I don’t see how this price tag stands up. I can’t figure out what it is based on other than sheer nerve. And the argument that this is what we need to raise South African wine prices across the board is flimsy at best and wishful thinking at worst. The issue around price is deeply rooted and traces all the way back to the rather unique agricultural economics of South African grape pricing, not to mention layer upon layer of additional contributing factors.
900 bottles at R5k a pop seems less silver bullet and more lead balloon.
And can someone please tell me which dizzy toddler stuck the labels on the boxes? R5 000 a bottle and they could not care less about sticking the labels on straight. Yeah. You can keep that.
- Marthélize Tredoux is the co-owner and editor at Incogvino. By day, she helps SA wineries sell their wine in the USA. She won the Veritas Young Wine Writers Competition in 2013.