Tim James: Who wants higher prices for Cape wine?

By , 27 June 2022

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Are local wine prices appropriate? Wine Concepts, Kloof Street.

At the risk of irritating some and boring others, I want to consider an aspect of the continuing debate that has had a little reflorescence recently: the lower prices for some high-end Cape wines vis-à-vis some of their better-known international peers. I wasn’t able to attend the Cape Town launch last week of the latest release of Van Loggerenberg, but someone reported to me that there was even a sort of protest there at their prices being too low – in comparison, that is, with comparable wines of similar high quality. (See Christian’s review for notes and prices.)  You might have expected the assembled wine trade figures to think: “Oh, how nice for winelovers to have these great wines at a good price – one which satisfies the winemaker and presumably the grape grower”. But no, it was rather: “Too cheap, push up the prices!”

And I thought, once again, why do some people want to make the best South African wines more expensive than they are?

Some possible answers have emerged from the debate in the past: an abstract sense of justice demands it; this allied with a kind of patriotism; or to drag up the rest of Cape wine behind it (a spurious argument easily countered by international experience – ask the poorer end of Bordeaux); or perhaps to allow a better reward for grape-farmers and thereby both save old vineyards and improve agricultural practices, improving wine quality.

In addition, most obviously, there’s sheer self-interest on the part of some wine-producers and wine-retailers, all of whom would gain by higher prices. But why would more-or-less ordinary local winelovers join in the chorus? It seems to be something about wine: after all, do we – largely middle-class, comparatively well-off hedonists – want to pay more for, say, local cheese? (Personally I stare aghast and amazed at the prices asked for some good local cheeses these days, and generally look away – though enough others clearly don’t.) And foodies in the Western Cape at least are thrilled by the extremely good value in international terms offered by the plethora of fine dining establishments – they congratulate themselves on the value, but surely don’t go round suggesting that restaurants should become much more expensive, in line with the quality they offer? (We do grudgingly accept that some of them do just that.) In fact, however, given the slender margins in most restaurants, this would be more relevant than in the case of wine, where most of the top wineries are doing extremely well for themselves these days.

Do, though, all the advocates of higher prices actually want to pay more for wines themselves? Those in the trade seldom if ever pay anything like full price for the wine they buy (except in restaurants and wine bars, I suppose), so they’d be cushioned. And I strongly suspect – excuse my cynicism – that some loud advocates of more expensive Stellenbosch cabernet have a great deal more of Bordeaux in their private cellars. Other people, I think, also don’t buy much of the relevant local stuff themselves, but, shouting from the sidelines, for various reasons they want those that do buy it to have to pay more – especially foreigners.

The context of it all is, of course, our society’s general inability to distinguish value from price. On an aesthetic level, the corrupt and decadent art market has gone so far down that road as to lead genuine artlovers to despair. It’s happening to genuine winelovers too.

If a decent red burgundy costs, say R1000 per bottle, and we are convinced that a Hemel-en-Aarde example is at least as good, it is, apparently, somehow insulting to our national pride that the Hemel-en-Aarde one sells for only half the price (and we don’t just congratulate ourselves on our luck). The market, which so many happily think of as the great and neutral arbiter of our lives, is puzzlingly wrong in this case, must be the conclusion. Not because it’s giving some foreign producers and some dealers and auctioneers absurdly high profits – but because we (for some reason) want our producers to be getting such mark-ups.

Don’t believe for a moment in the poverty of the sort of Cape wines that are getting (by local and even international standards) high prices. The likes of Kanonkop, Sadie, Mullineux, Vilafonté, et al are generally doing just fine, or better, I assure you. As to paying the grape farmers better for their produce – that is, pleasingy, certainly happening more – but doubling the price paid for grapes would anyway make remakably little difference to the profitability of expensive wine.

One motive one seldom hears from the advocates of more expensive wines (and grapes) is to improve the lot of vineyard and winery workers. I wonder how much of higher prices gets back to those who labour amongst the vines and tanks and barrels and make it all possible. Of course, most of the new-wave producers buy in their grapes from far-flung farms and would claim, with exculpatory relief, that they are not responsible for vineyard workers having decent (or more!) pay and conditions. The eternal evasion.

Back to my main point. I’m not convinced that all top Cape wines are undervalued or underpriced in the world market. But if they are, as long as their production is sustainable (and it is), let’s be grateful that they don’t cost even more, rather than encouraging them to raise their prices. If those producers want a local market, as Lukas van Loggerenberg and others know very well, and if they get pleasure from the idea of people drinking their wines rather than hoarding them as “collectables” or “an asset class” – then keeping prices at comparatively reasonable levels is a good idea. As long as it happens, let’s just enjoy it.

  • Tim James is one of South Africa’s leading wine commentators, contributing 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.

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  • Carl4 July 2022

    “Of course, most of the new-wave producers buy in their grapes from far-flung farms and would claim, with exculpatory relief, that they are not responsible for vineyard workers having decent (or more!) pay and conditions. The eternal evasion.”
    I do feel this is a very broad statement and would’ve been fairer if some of these winemakers were approached for comment. That said it is interesting that the plight of workers are laid at the feet of independent winemakers. What do they do if the farmer says, it is none of your business?
    Perhaps not that much relevant to this site, but do we lie awake worrying about the plight of the workers in the Nike factory, the Cobalt mines for cellphone batteries or the Carrot farmer? Should we worry about worker pay in restaurants – as the EMP saga now highlights.

  • alex482 July 2022

    Thank you Tim. Interesting points.
    Recently attended the Chelsea Flower Show here in the UK. Babylonstoren Rose (the official wine of the show!) £39 a bottle……middle range SA wines also becoming increasingly expensive here now. Can understand the wish to stratify the market but how much do vineyard and winery workers benefit from this? Suspect – as your previous article mentions – there will be an increasing number of prestige cars in the winelands shortly.

    • GillesP2 July 2022

      5.95 pounds at Makro here in SA for this wine. I will let you do the math

    • Carl4 July 2022

      I had a quick look at prices of SA whites at Handford wines. There are a good selection of our premium whites well below the GBP39 and most of them are infinitely better. That said the brand is strong an perhaps people are carried away in the moment and purchase the Rose at that price.
      I’ve heard that the Babylonstoren farm is independently profitable and must be close to employing a 1000 people and there is a school for worker’s kids. So the profits seem to be going back to to them. The alternative of a Socialist Government project is of course well documented in SA. For the same of ZAR millions invested by the Bekkers there would ‘ve been nothing.
      Mr Bekker do not rely on the wine prices to fund his car purchases I can assure you of that.

  • David K28 June 2022

    Some very good points indeed. And something that I have been wondering about with all the calls for high SA wine prices. To give you and example: here in Japan, I can buy a bottle of the exceptional 2019 Brane-Cantenac for less than I can buy a bottle of Porseleinberg (JPY9980 vs JPY12,500). They are different wines and different styles I admit. But a bottle of Paul Sauer ’18 would cost about JPY7,500 – which is a more similar style to the Margaux wine.

    And we have to accept that the average overseas buyer is not that knowledgeable about SA wines – and as a result, will almost always, dig just a bit deeper into their pockets for the Bordeaux.

    • Pieter de Klerk28 June 2022

      It’s indeed a very sensible article, David. The calls for higher prices only come from people involved in the industry. I haven’t heard it coming from a single person that’s a mere consumer. They – and I – actually lament the way that certain brands have already slipped away from our grasp, with more to follow. And in some cases, you can only afford a bottle or two, instead of a case or two. The latter scenario obviously allows you to enjoy a wine more intimately and fully over a period of time. Some wines will ultimately only be drunk by the super rich (and a few journalists and other people in the industry), of which only a small percentage will be really passionate wine lovers. Imagine Average Joe trying to save up for a case of DRC…

      Of course it’s the right of any producer of any product to ask what they want for it. And if the market can support that price, what right has anyone to deny them their prosperity? I see nothing wrong with it. It is a sad situation for most wine lovers, though. In the meantime, there will always be excellent value for money at all reasonable price levels – which wine lovers will continue to discover and enjoy.

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