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Don’t bite the hand that feeds you, or A Moralistic Tale of Getting 100 Points

22 comments

Just when you thought things couldn’t get any weirder, here comes the famous Portuguese winemaker, Dirk Niepoort, complaining that a certain critic named Parker just gave his wine 100 points.

Dr. Vino reported it, paraphrasing Niepoort as saying the Big Score “would raise prices and alienate the customer base he’s trying to build.” Then, curiously, Niepoort added this little fillip: “it’s too early to have 100 points.”

Okay, kids, deconstruction time or, as an old semiotician I once knew would have asked, What’s he really saying?

“would raise prices” Why? Well, we all know that a Big Score from any of the major critics is like waving a red flag in front of a bull, the red flag being the Score and the bull being the proprietor. Yes, Big Scores often result in price hikes, but nobody is forcing said proprietor to jack up the price. He does it freely, of his own will, because he wants to and thinks he can get away with it, based on that Score. It’s not like there’s some ineluctable law of the universe that goes “Cause: Big Score. Effect: price rise,” like the law of gravity that mandates that everything that goes up must come down (or, in this case, the reverse: Everything that was down must go up, providing it receives enough stimulus in the form of a Big Score).

Now, you can argue that the price of Niepoort’s wine will rise no matter what he does or doesn’t do, because it will immediately find its way onto the aftermarket, where bidding will be intense; or that retailers (on- or off-premise) themselves will raise the price, when their customers start demanding the wine. What’s wrong with that? It’s the essence of capitalism, and, after all, wine isn’t some esoteric practice like meditating or sodoku, it’s a business. The greater the demand, the higher the price goes.

Now, I’ve talked to plenty of winemakers (mainly in Napa Valley) who’ve told me, privately, they’re concerned that their pricing is going too high, because they don’t want their wines turning into commodities. I can understand their concern, but the fact is that the final price is absolutely a function of the release price, which is determined by the winery. If the winery doesn’t want to see prices get too high, all it has to do is lower the release price. But you never see that, unless the winery is in trouble. And why do most wineries get in trouble? Because they don’t get high scores.

“would alientate the customer base he’s trying to build.” I can see that some of Niepoort’s customers might be pissed off if next year they find themselves forced to pay 30% or 50% more for a wine they used to be able to afford. But the truth is, consumers are very fickle these days when it comes to wine. They buy “x” today and “y” tomorrow and “z” the next day. Partly this fickleness is because they’re constantly searching for bargains. Partly it’s because wine is like the fashion industry: as Heidi Klum says, one day you’re in, the next day you’re out. A winemaker who hopes to stay “in” must have a business plan that takes scores into account–whether they’re high or low. If a winemaker is relying on the critics to not give him a high score, then he doesn’t have a solid business plan.

But then there was that odd little remark Niepoort made: “it’s too early to have 100 points.” What can he possibly have meant? Would 100 points have been okay in 5 years as opposed to today? This suggests that Niepoort isn’t really against the 100-point system, he just wants to be able to choose the exact moment when he gets his blessing. Well, I’m sorry. The world doesn’t work that way.

The reader comments on Dr. Vino’s page were a propos. One said, “He doesn’t have to raise his prices. And he can have a few words with those who do inflate and gouge. I guess he would have been happier with an 80?” True, true and true. At any rate, I’ve never heard anyone complain about a high score before. It seems a little disingenuous and ungrateful.

  1. Christy Thomas says:

    Steve
    I have to disagree with you here-it’s not always the winery setting the price. I was in Portugal in December and tasted at several quintas, including Niepoort, that are gaining great reputations for table reds. At one quinta, we were blown away by a terrific wine that was less than 30 USD. Then the owner told us the current release just got great scores and the distributor is demanding they raise the price to about 60 USD! They were told no one in the international market would believe a wine priced under 30 USD from Portugal would be any good and if they wanted the market to take them seriously, they had to raise their prices.

  2. Steve-

    The release price only controls the bottom price. In other words, distributors and retailers can markup whatever they want. Often a wine in the 3 tier system can reach double it’s intended price simply because distributors and retailers calculate demand and markup accordingly. The secondary market may not be a concern.

    Most distributors will take 30% Gross Profit from a winery FOB, this will easily jump to 40% on a wine like this. Same can be said of the retailer. The math ends up being something like this: A $40 suggested retail would be about $20 FOB, $30 wholesale, $40 retail. At a higher rate, it jumps to $35 wholesale and nearly $60 retail. That’s just on a padded margin, it increases 50% in price. If anyone decides to gouge, it could turn into a $100 bottle very quickly, with just a fraction of that $ going to the winery. The winery has almost no power to prevent the subsequent tiers from taking a larger piece. That is surely what he is referring to. He doesn’t have to raise his price at all,and if he lowers it, guess what? They’ll still take their share. Poorly explained on his part, but a very real concern.

  3. Adam is dead on….

  4. Adam is pretty much correct on the pricing issue.
    “it’s too early to have 100 points.”
    I think what he is saying there is the wine is way too young to have a 100 score. What he seems to have forgotten is that Parker awards his score based on the wine at its peak of maturity. And, down the road, should Parker lower that score to a mere 99, all the Parker sheep get their knickers in a knot because it seems to imply that Parker made a mistake in his original evaluation.
    Tom

  5. Christy, I think the $30 release price was the basis for doubling it to $60. If the release had been $20 maybe the increase would have been to $35. So there is a connection. As for no one believing the wine could be good under $30, this is a lie and a smear that distributors have foisted on the rest of us for years. They simply look for any excuse to jack up the price and their profits. It’s one more reason why the 3-tiered system is riddled with problems. Those of us who write have an obligation to let the public know that there are wonderful wines out there for $30 and below.

  6. george kaplan says:

    100 points is over anyway. Even Broadbent gave 6 stars to a La TAche and , if memory serves, A Screaming Eagle!

  7. george kaplan, Broadbent’s been giving stars before the 100 point system was a glint in Parker’s eye.

  8. “If a winemaker is relying on the critics to not give him a high score, then he doesn’t have a solid business plan.”

    How ever did wines sell before the critical age? I know plenty of wineries that don’t rely on critics’ scores to sell their wine and many of them are doing quite well. Wineries don’t *need* critics. Critics can be useful to wineries, but are not necessary. Critics need wineries. I think more wineries than not secretly (or not so secretly) despise the 100-point system. Granted, many of those that are not in favor have not gotten 100-pt scores. Yet, I do know of winemakers other than Niepoort that have gotten 100-pt scores and still don’t like the game.

    On the other hand, if Niepoort didn’t want Parker to score his wine he shouldn’t have submitted it! We all know that Parker didn’t go out and buy it… Steve can attest to wineries not submitting wines to him because they don’t like the system.

  9. Christy’s story is hardly surprising. Steve is right on the money that this is simply a scare tactic by the distributor to make more profit. In this case though, the winery can say no. In addition, they can threaten to go elsewhere and insist on keeping the price the same and marketing it that way. Dear winebuyer, here’s a 100 point wine that’s $35!! Do they really think that won’t sell? Of course not but it will keep their margin down so they push to jack the price.

    As far as the “100 points will scare my customers”, I can see his point a bit. Perfect case in point: when I had asked Steve if there were other Sonoma mountain wines out there that were really good he mentioned Verite. I went to their site to see about getting some and the first thing I saw was that Parker had given 100 points to 3 of their reds. I closed my browser immediately on seeing this and didn’t even bother finding out how to order. Just for fun, I cycled back to Wine Enthusiast and saw that Steve gave one of them 100 as well. Before I even looked at the release price I knew I would never have a bottle of their wines.

    I think that perception is what the winemaker is worried about…

  10. “And why do most wineries get in trouble? Because they don’t get high scores.”

    I think everybody reading this blog (and you as well Steve) know there are many other factors besides lack of critical praise that contribute to a winery getting into trouble.

    Also, the 100 PT scale and critical praise have their place- I won’t dispute that. But asserting that a winemaker who fails to account for high scores in their business plan has a bad business plan seems a bit narrow minded. A business plan should contemplate all scenarios (ideally) that will affect it’s sustainability, growth and prosperity but there are plenty of wineries that are thriving and appear to be doing well without the benefit of high scores.

  11. Dear Bob: re: those Verites, I mentioned them only because the question was, are there great mountain wines from Sonoma County or Alexander Valley. Verite immediate came to mind because the wines are indeed very great. But I was hardly making an exhaustive inventory. I could have mentioned many others, from Alexander Valley Vineyards’ Cyrus to Lancaster to Rodney Strong and on and on.

  12. Kyle, to be fair, I said parenthetically that we *don’t* know if Niepoort sent RP the wine or not. I have no idea if Parker ever buys his own wines. At Wine Enthusiast, we sometimes do.

  13. Steve,

    Not being critical of you mentioning Verite at all. Using it as an example of how a typical wine nut will view a huge score in a wine and how we’ve been conditioned to fear those scores when applied to a favorite wine or winery. Judging by your tasting notes, I’m sure I would love those wines as much as you did.

  14. Bob: not sure I understand what you mean by “conditioned to fear those scores…”.

  15. Simple fear of the wine being priced off of my dinner table. When a wine gets a very high score, the next release will almost always have a very high price and will off of my list. Perfect example is the O’Shaughnessy Mt. Veeder cab, which I love. Was priced the same as their Howell offering if memory serves until Parker gave it a 98. The new release is now $100 and thus out of my cellar and off the dinner table. Another is the Ladera Lone Canyon Mt. Veeder Cab. I love that wine. Just found out the vineyard was sold to Bill Harlan. I’m sure Harlan will make a fantastic wine from that source but I’m even more sure it will be $400.

    I can name many more examples but the jist is high score = goodbye for your average wine geek. I’m not ripping these producers for doing so, it’s not personal, it’s business but it is very sad to lose a great wine that I’ve loved over the years.

    As you stated, they don’t have to jack the price but… they always do.

  16. Bob: I hear you pain, I really do. The good news is that in California alone there are so many fabulous wines, of every variety, that are affordable. It just puts the onus on you to do your due diligence and find them. I’m happy to help, for whatever it’s worth.

  17. “Ungrateful”? Really, Steve?

  18. Steve,

    Out of curiosity, which type of wine would W.E. choose to buy and what’s the reasoning behind it? If a winery has no interest in sending its wines to W.E., why bother reviewing them?

  19. Steve, reread your post. You didn’t mention anything about Parker buying wines or not. I’m sure he’s paid for some wines he reviews, but not often. I’d be willing to bet that Niepoort submitted the wine, but i have no supportive evidence. I’m sure WE only pays when you’re trying to do a large tasting of let’s say a particular region and certain wineries don’t want to participate but it would look bad if you left them out.

    I’m not disagreeing with your basic argument about Niepoort complaining. He is in control of the situation. I think your point that scores are so vital is flawed. How many of the 7000 or so wineries in the US get their wines scored by the top critics? Maybe half? Most of the other half are doing ok (ok, not spectacular) without the 100-pt system. Critics like you are not the end all of the industry. Yes, you are influential, but the industry would not collapse in your absence.

  20. Carlos Toledo says:

    Steve, generalisation has its problems, but it comes to the portuguese people (whom i know so well), this news is not a shocker.

    Can you imagine these people once ruled half of the world? Strange times, wasn´t it?

    Tchau!

  21. Brian, we would buy (within our budget) certain wines from California that consumers are interested in. You might call them the equivalent of France’s Grand Crus and First Growths.

  22. I’m going to agree with Bob, and say that a 100-point wine = a wine I won’t be drinking. It’s not that I have a problem with 100-point scores, but those wines go to the trophy collectors. For people who love wine and have it with dinner every night, spending $30-$50 every once in a while is not out-of-the-question. I’m always happy to drink a great wine with a nice meal. But once a wine gets a huge score, it disappears off the shelf, and ends up on the secondary market for triple the price.

    The good news is something I remember from my old days as a retailer – you can get a wine from that same winery, same vintage, as long as it is not the high-scoring wine. So while the 100-point Nieport is probably already stashed in the cellars of collectors or auctioning on wine-searcher for 6 figures, you can probably still find a regular bottle of Nieport for the regular price

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