Michael Fridjhon: Trophy winning Shiraz for R115 – what’s going on?

Shiraz is a relative latecomer to the South African wine scene. As recently as the 1980s, total plantings were less than 1,000 hectares. Most of those vineyards were severely virused. Wine appreciation students at the time were taught that “leathery” and “sweaty” were the key identifiers of the variety – though it turns out that this was more an indication of the impact of leaf-roll than the fruit quality of the cultivar.

Unsurprisingly, growers weren’t beating a path to the nurseries to increase their shiraz vineyards. It was only with the post-1994 export boom (and its demand for “international” red varieties) coupled with growing worldwide interest in shiraz/syrah that plantings took off. By 2010 there were over 10,000 hectares of mainly young vineyards widely distributed throughout the Cape.

Many of the producers had never worked with it before: the results were not pretty. At the 2007 Trophy Wine Show there were around 160 shiraz entries. A significant percentage of the wines submitted were faulty. High pHs meant that brettanomyces infections were rampant. In an attempt to emulate the success of the Southeastern Australian styles, producers made wines which were over-extracted and over-oaked.

A correction naturally followed. Slow sales meant that many growers favoured other varieties, while consumers – for reasons which still elude me – made merlot their cultivar of choice. For the past decade there’s very little money available for new plantings, so there’s a discrepancy between the vineyard area given over to shiraz, and the demand for the fruit. While shiraz still represents 10% of our total plantings, the more popular merlot sits at about 6%.

I’m guessing that one of the reasons our merlots are often so ordinary while the shirazes are getting ever better is the impact of this differential in the market. We have 60% more shiraz planted than merlot, but we sell almost 50% more merlot (as certified wine) than we do shiraz. In short – it’s harder to find a market for the shiraz. For growers battling to sell fruit in tough conditions a greater effort has to be made to produce a premium crop.

All this goes some way towards explaining the remarkably competitive price of the trophy-winning Nederburg The Winemasters Shiraz 2022 at this year’s Trophy Wine Show. Clearly there’s great shiraz fruit to be bought for not very much money. This is not to detract in any way from the achievement of the Nederburg winemaking team in putting together a substantial volume of clearly very decent wine at a price point which frankly ought to be as much an embarrassment as it is an achievement.

Unsurprisingly, there has been considerable comment about how a wine which sells for around R100 per bottle could possibly be good enough for any trophy, let alone the clutch of gongs it has collected along the way – Best Shiraz, Best Red of Show and Best Value Gold Medallist. There are obviously commentators who feel the judges must have erred, or that the awards are an unrepeatable fluke.

Before dismissing this result out of hand, it’s worth reflecting briefly on how many hoops the wine had to pass through to win its “Best Red Wine of Show” trophy. The primary tasting panel (comprising one international MW and two local judges) awarded it a gold medal. As show chairman I reviewed that decision. It then went forward with the other gold medallists in that class to the trophy judging – at which all the local and international judges have an equal vote. At that stage it secured the best-in-class trophy (the other gold winner being Cederberg 2020). Those judges also allocate a final score to every wine. By aggregating those scores the show’s auditor is able to determine which is the highest scoring red wine overall. If the primary panel had erred, its run would have ended then. Instead it went on to collect several more trophies.

It’s always possible to find something to mock about a show result: the universe of wine commentators knows exactly what it thinks. When a competition publishes its laureates, whatever does not fit in with the popularly held views gets held up to ridicule. It would be more useful to accept that the winemaking team at Nederburg produced a pretty smart wine at a price we have come to regard as too low to be financially viable. It’s clearly a really good red wine. And the price is the price. So the disconnect between the two is where this discussion can be most fruitful.

We all know there’s no connection between what it costs to produce a premium wine and the price at which it sells. Jancis Robinson has shown that there is very little input cost differential between a Fifth Growth from the Medoc and a First Growth (providing you exclude the cost of the land). Farming costs per hectare are similar; so is the cost of making the wine. Only the percentage of new wood has any real impact on the final per litre cost. Yet the First Growth is released at more than ten times the price of the Fifth and probably three times the price of a Supersecond. Reputation, coupled with carefully managed supply-and-demand, is what drives the premium.

If reputation is properly curated, you can almost bypass the impact of supply: Lafite Rothschild is the largest of the Medoc classed growths, and also consistently the most expensive. Dom Perignon is the best known and most lucrative of Champagne’s prestige cuvées, yet the annual production volume is at least 5m bottles. Clearly price does not have to follow the Burgundy model of impossibly low volumes with buyers driven to pay increasingly ridiculous amounts for fear of missing out.

But selling prices also have to be sustainable. Can we be certain, at current fruit prices, that a wine as good as the Nederburg Shiraz can be made next year and every year into the future? The industry, and the pundits with prescriptions for its ongoing success, talk constantly about scaleability – the capacity of the Cape to make high-end wine in volumes which would give South Africa a presence in international markets. Nederburg made about 400,000 litres of the 2022 Shiraz: will the vineyards be there ten years from now if the growers who produced the fruit for this wine earned so little for their trouble that the on-shelf price came in at under R100? That’s the thing about wine – you can’t really make it if you don’t have the grapes.

• Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is the founder of Winewizard.co.za and holds various positions including Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Trophy Wine Show.