A thought experiment:

I am successfully selling something at £500. I tell people that all day.

Then, an employee tells a customer the price is actually £100.

I am annoyed but then - as I am legally obliged to do - sell it for £100

Is the right price for the product £500 or £100?

This, give or take a few adjustments, was the question Professor Philip Cowley posed on Twitter recently. Cowley, whose speciality is politics, was obliquely referring to a debate the previous evening in the British House of Commons in which members of parliament had been given conflicting information over whether the outcome would or would not be a vote of confidence in the government which might potentially lead to a general election.

But, like a number of others, I treated the experiment literally, because it seems to me to relate quite usefully to wine. What is the ‘right’ price for a bottle of Burgundy or Napa Valley Cabernet? The amount you could have bought the then-current vintage for a few years ago, or the sum you would be asked to pay for the one that’s available today?

And what’s the right price for a new wine that’s just been launched and has no track record of its ageability or appeal in the secondary market?

The response I liked best came from someone called Edward Greening who simply said

“The price is £100, the value is £500”.

There are many reasons to believe that the wine industry may be heading into choppier waters

For anyone who has learned the basics, the process of judging any wine invariably involves the way it smells

But, just as the advent of skin-contact and cloudy natural wines has changed the way wines are analysed visually, sniffing them is not as straightforward as it was. Previous, fairly specific, arguments about ‘acceptable’ or ‘unacceptable’ brett, reduction and VA have moved on to discussions of ‘funk’ that now include the once universally-hated ‘mousiness’. Steven Graf in a 2017 blog post defines ‘funk’ as referring to “a characteristic known to be a flaw that can simultaneously contribute to the harmony of a given wine”; “spoilage bacteria/yeasts”, and “an agreed way of talking about a loose set of earthy, putrescent flavours and smells common in food, fermented products, beverages, soil, plants, etc.”

Fred T Franzia, was undeniably – to use a useful old word – a scoundrel who had little respect for rules, regulations and niceties. Some of the people he offended and annoyed had good ethical and commercial reasons to be upset.

The former group can point to the fact that knowingly selling wine made from cheap grapes under the name of pricier ones is against the law – and led to Franzia paying a huge fine and – nominally at least - temporarily losing his role at the head of his company.

Labelling wine made from cheap Central Valley grapes with Napa brands was, by contrast, initially entirely within the regulations, thanks to legal loopholes that were later closed, but it undeniably involved cheating his customers and competing grossly unfairly with competitors who were playing by the rules.

There were those who simply didn’t like his manner, including what former Tesco buyer, Phil Reedman MW recalls as “his facility of incorporating the F word into each and every sentence. Verb, adjective, noun and more.” A 1994 Los Angeles Times article described him as “smart but boastful, arrogant and brash, ready to intimidate employees, squeeze growers and fight battles in court”. Steven Lapham, the Assistant U.S. Attorney who prosecuted Franzia, was quoted in the same piece as saying “Employees and others with whom [he] deals are afraid of him… I’m not sure what it is, if it’s his manner or the economic power he holds.”

And then there was the way he gave the metaphorical finger to almost everything the wine world holds sacred.

It always feels good to be among people who agree with you on what’s right and wrong. Which is how I felt, two decades ago surrounded by fellow British tasters who’d been flown to Santiago to take part in the first Chilean Wine Export Awards - a competitive event to identify and reward the wines we thought would do best in our and other overseas markets.

After the tasting - at which the visitors were joined by local producers or critics - and the allocation of medals, there was a conference attended by numerous members of the Chilean industry who were eager to hear what Jancis Robinson and her compatriots had to say about their wines.

Gratifyingly for them, our comments were generally positive and, in particular, included positive recognition for the limited use of new barrels in the samples we had tasted. Watching the audience, I could imagine them writing menos roble - less oak - with a tick, in their note-books.

Then one of the Chilean tasters quietly had his say. Patricio Tapia is, as he was then, a distinguished critic with a large professional audience in the US. What, he wondered, if North American wine drinkers were actually keener on oak than the Brits? Should they be forced to drink styles of wine that happened to suit the tastes of experts on the other side of the Atlantic? And should Chilean producers risk losing sales to US importers who might go looking for oaky wines elsewhere?

Great news for fine wine lovers. The price of La Tache and Lafite has been slashed by up to 25%. The same savings apply to almost any top wine you can name and are available from a wide range of UK merchants including Berry Bros & Rudd, Farr Vintners and Bordeaux Index.

There’s just one catch. You have to pay in US dollars.

And therein lies the explanation. On January 2, 2022, a dollar would have bought you £0.75. On Monday 26th September, following a borrowing-heavy ‘mini budget, that was widely described as a ‘gamble’, the Daily Telegraph - usually a reliable supporter of the governing Conservative party - reported, “the pound fell against every single other currency in the world, from the Albanian lek to the Zambian kwacha."

Indeed, it plummeted to the point at which an American would briefly only have had to add three cents to their dollar when purchasing a pound. While huge intervention by the Bank of England has helped the currency 'bounce' back to £0.90, there are few observers who expect it to strengthen much further. Quite the reverse, as a flock of chickens bearing bad financial news all come home to roost.

February 22nd seems like a lifetime ago: a relatively hopeful moment when we all imagined that the world might finally be emerging from the two year-long tunnel of Covid.

Now, however, we all know how it felt to be living in America in 1940, watching helplessly as a conflict brought death and destruction to Europe. Except, of course, we are all far better and more vividly informed than the US spectators of 80 years ago who had to rely on radio broadcasts and movie newsreels.

While praying for the carnage to stop, we are all going to have to consider how the world will look when it is over. After WW2, the few countries that had not been directly involved or occupied could do their best to carry on as before, but that won’t be the case this time.

Given the number and range of topics about which people argue, it’s always good to find one on which almost everybody will happily agree. Just say the words ‘restaurant wine mark-ups are outrageous’ and I can pretty well guarantee that you’ll find no dissent.

I have to confess to being fascinated by profit margins of every kind – from the ones applied to skimpy underwear, Evian water and Gillette razorblades, to the razor-thin or frankly non-existent examples applied by retailers when trying to attract customers into their stores.

And I’m just as fascinated by the varying responses we all have to those margins. How often do the people who chorus their annoyance at restaurants multiplying the price of a bottle of wine by three or four times, pause to consider the multiple that’s applied to the salad or omelette they eat without complaint? Or the gap between the 31 cents worth of coffee in a Starbucks cappuccino and the $3.65 you pay for it.

How many who criticise the best-selling ghosted celebrity biographies and trash novels in a bookshop window consider the role those profitable items have in subsidising all the loss-making, beautifully written books you and I might prefer to read?

Just imagine for a moment that you and your family have just settled down to something you want to see on television. Your favorite pizzeria calls to say the cyclist who usually fast pedals the pizzas to your door has broken his leg, and his replacement can’t get to you for at least an hour. What do you do?

Put up with the grumbling stomachs and comments of your hungry teenagers while waiting for Mario the former Met Opera singer’s marvelous Margherita? Or say, ‘the hell with it, cancel the order and place a new one with Dominos?

Or let’s try another scenario.

An item you want is available from Amazon, at a great price and with delivery this afternoon, but after this morning’s New York Times article, you don’t feel happy about the way Mr. Bezos’s behemoth treats its workers, handles its tax affairs and threatens smaller competitors.

So, what do you do?

Swallow your scruples or pay for them by buying them from another retailer and accept that you’re going to spend a bit more to get them in a couple of days.

Whole Products

Welcome to the notion of ‘Whole Product’ created in 1983 by the German-born economist and editor of the Harvard Business Review, Theodore (Ted) Levitt, in his book The Marketing Imagination.

What do Amazon and a Paris institution called Shakespeare and Company have in common? 

Both sell books. 

The US giant sells over $6bn worth of books, but as a share of its turnover, they now represent less than a handful of percent. And of course, almost all of those volumes are purchased over the internet.

Shakespeare and Company is a Paris landmark: a small, family-owned retailer of new and second-hand books since 1951. Until the arrival of Covid-19, as Sylvia Whitman, its owner, recently revealed to the Financial Times, the shop only handled around 100 online orders per week. Its customers preferred to wander and browse its two floors where struggling authors have been allowed to sleep overnight in return for a few hours work in the shop.

While Jeff Bezos always intended to use internet bookselling as a stepping-stone to a far broader operation, Whitman’s decision to beef up her online business was made out of desperation. As France moved into its second lockdown a few weeks ago, Shakespeare and Company’s sales fell by nearly 80%. An email titled ‘Hard Times’ sent to customers across the world instantly yielded 5,000 orders, but this wasn’t enough. In order to help pay the rent for the months when the shop was closed, Whitman launched a program called Friends of Shakespeare and Company.

Can a small winemaker, with five or 10 hectares create a brand? Is it fair to expect them to develop a mastery of marketing and sales as well as grape-growing, fermentation, blending, maturation and bottling?

At first glance, this looks like a very fair and sensible pair of questions. The context was a discussion of the challenge that well-funded industrial producers represent to smaller estates. But there was a time when this question would never have arisen.

When I first lived in Burgundy in the 1970s, the idea of marketing their wine would have been unimaginable to most of my neighbours. They tended their vines, picked and crushed the grapes and fermented their juice, and waited for the courtier (the broker) to do a deal that would involve a negociant taking the wine off their hands.

This happy state of affairs stopped for many Burgundians in the early 1980s, after the ‘oil shock’ recession of 1979. Suddenly the courtier stopped calling; the negociants didn’t need to fill their cellars because they were struggling to sell what they already had. Fortunately, for the growers, a few enterprising people like my friend and employer Becky Wasserman were opening businesses selling, and creating new markets for, estate-bottled wines to the US.