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The Hill grape fraud case does NOT taint Napa Valley!

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Last week’s very long (3,700 word) article in the New York Times about the Jeff Hill case has stirred up tension in Napa Valley, where some people think the author, Vindu Goel, went over the top in painting Napa as a place where wine quality is “built on quicksand.”

(Some of you might not be able to open the NYT link if you don’t have a Times subscription. Even if you can’t, you can probably find it on Google.)

Last Spring, Mr. Hill, a vineyard manager, was charged with grand theft for allegedly stealing tens of thousands of dollars worth of grapes from a client during the 2013 harvest.

Reporter Goel took the serious and significant charges of fraud in the Hill case and, some folks say, stretched them to tar Napa’s reputation in general. Prices of Napa wine, Goel wrote, are based more on consumers’ belief in the superiority of the region’s grapes than in the inherent quality of the liquid in the bottle.”

And “[M]any bottles on wine-store shelves aren’t what they seem because of loopholes in American wine labeling laws,” he added, based on an interview with the master sommelier, Emmanuel Kemiji. The inescapable implication is that a top-notch Napa Valley Cabernet Sauvignon may contain “a cheaper grape varietal like syrah or zinfandel” that could be from “anywhere else in the state, like Fresno.” Most damaging of all Goel’s assertions, perhaps, is this one, which suggests that spin and hype, rather than quality, are behind Napa Valley’s reputation as the supreme place to make wine in America: “Much of Napa’s price premium stems from savvy marketing, not any objective superiority of the wine.”

Reactions, mostly offended, have come from in and around Napa Valley. My friend Lewis Perdue (for whom I used to work, years ago), in Wine Industry Insight took particular umbrage over what he perceived as the Times’ unfair broadside.

“NY Times Uses Hill Wine Company Debacle To Take A Shot At Napa Valley,” he headlined, explaining that the article left an overall impression that varietal fraud and some level of adulteration were relatively common practices” in Napa.

Here’s my take. Most of what Goel wrote is objectively true, based on the facts. U.S. labeling laws do allow for up to one-quarter of a varietally-labeled wine to consist of varietal/s other than the named one. Those same laws also allow for a certain percentage of the grapes to come from areas other than the official appellation on the label. And, yes, part of the rationale for Napa Valley wine prices is due to Napa Valley’s reputation.

Did Goel go over the line? Yes. Dropping the word “Fresno” into that sentence was both unnecessary, and calculated to shock. It’s a little like the famously self-incriminating question, When did you stop beating your wife? Now that Goel has implanted the thought in people’s minds that Napa Valley wine may contain grapes from Fresno, there’s no way Napa vintners can convince them that it’s not true, no matter what they say.

Granted that Mr. Hill may (or may not) have been a crook, it’s hyperbole and unprofessional to use a single case to stain an entire region: it’s like saying that fraud is widespread in Burgundy based on the Rudy Kurniawan case, or that all of Bordeaux is suspect because a famous chateau once used illegal wood chips instead of real barrels.

It was also a little misleading for Goel to use Kemiji’s quotes to suggest that Napa Valley’s terroir is no different from any other place. Emmanuel (who I suspect didn’t know how his quote would be used) said, “You line up cabernets from Napa and good-quality cabernet from Sonoma and Lake County, and it’s really tough to say where they’re from.” This is true; as someone who’s tasted countless Cabs from those areas (and many others), I know it’s not easy pinpointing where a great Cabernet comes from. But still, it misses the point.

For the fact is that Napa Valley produces more great Cabernet Sauvignon than any other place in America, and has for a very long time, which surely gives it legitimate claim to prestige; and every prestigious region and wine in the history of the world has been considered more desirable—and thus more costly—than the competition.

As for Goel’s contention that “savvy marketing” is behind Napa’s success, this doesn’t stand up to the facts. Napa Valley achieved its success well before the modern era of marketing. The fame of the boutique wineries of the 1960s and 1970s wasn’t due to P.R., which most of those little wineries didn’t know anything about, but to the appreciation of educated wine lovers who recognized that what they were experiencing was something special. Besides, “savvy marketing” may give a winery or region fifteen minutes of fame—but if the stuff in the bottle doesn’t live up to the hype, the fame is fleeting. That is emphatically not the case with Napa Valley.

There is no evidence whatsoever—not a sniff or a shred—to suggest that the majority, or even a significant minority, of Napa Valley Cabernet Sauvignons are not what they say they are: grown and produced in the valley, and made from Bordeaux varietals. (And besides, if adding 2% Syrah makes the wine better, who cares?) I also suspect that, when Kemiji told Goel that “there is an incentive to fudge [on blending] because the price of Napa cabernet is so high,” he didn’t know in what context his words would be used. I’m a longtime reporter myself; I know the game. Some questions are a form of entrapment. The reporter who goes into the interview knowing what points he wants to prove, and then asks set-up questions, is not being objective or fair.

Honestly, Goel’s story is a combination of personal anecdotes, irrelevant throw-ins and editorializing, in addition to the facts. Rather than illuminating an interesting story, it feeds into America’s current obsession with conspiracy theories, in this case that “wine quality” is an elitist myth, and that everything is equal because it’s not permitted for anything to be better. Breitbart.com, an online news service, covered the Hill case, and here’s a telling comment one of their readers sent in:

“I always got a kick out of these wine snobs. I knew you could give them a swig of Night Train™ and tell them it’s gourmet and they would believe it. sort of like the ‘art community’… a crappy painting of campbell’s soup cans garners millions ?????” The commenter is entitled to his opinion, of course, but it’s pathetic that the truth is lost in the shuffle: Night Train is not as good as Napa Valley Cabernet, period, end of story. And no “gourmet” in the world would ever confuse it for such.

I’m not saying the Hill case isn’t worthy of reporting, or that the Times shouldn’t have allowed Goel to run with it. What I am saying is that American journalism has sunk to its lowest level in my lifetime, in terms of scandal-mongering. What Woodward and Bernstein set in motion, nearly 40 years ago, has run amok. Not every instance of law-breaking is a major scandal. Sometimes an illegal act is just that: The isolated act of a single individual, not an indication that an entire region is unscrupulous.

  1. David Weintraub says:

    Well said.

  2. Yes, well said but far too kind. This kind of yellow journalism, for that is what it is, disgraces the NYT with its innuendo and lack of factualism. Regardless of whether E. Kemji believes all that he says or was misquoted, his words stand unchallenged as if the author were actually doing some kind of reporting.

    3700 words that start with an alleged criminal act and end up tarring Napa Valley without a shred of evidence that there is no telling Sonoma from Napa from Lake County is an intentional hatchet job, and if you were not one of the nicer guys around, you would have sliced and diced this fiction in the manner that it deserves.

  3. Gary Millman says:

    While I don’t see widespread fraud in the wine industry it seems to me that Napa valley cabs are way over-priced . Kemiji’s comment that you could line up Napa, Sonoma and Lake cabs and not tell the difference is pretty spot on. Napa gets away with the high prices because of great marketing.

  4. I agree with your overall point here, but let’s not equate savvy marketing with “spin and hype.” Good marketing presents facts in an interesting and engaging manner in a way that lets the customer make a proper and informed decision. Spin and hype is easy to sniff out. And, in the case of wine, quality must be in the glass. As the old saying goes, nothing kills a bad product faster than good marketing.

  5. I’m sorry, after having worked in many large and small Napa wineries….some the brands that made Napa NAPA, the article looked like truth to me.

  6. I thought it was pathetic that a great newspaper printed such a long “investigative” report based on the writer’s opinions after he met Hill in line at Gott’s Refresher. He sounded like he was willing and ready to write anything nice about Hill that he could . Hill stole money from a lot of hard working people and still is unwilling to admit what a dishonest blight he is!

  7. David Vergari says:

    Steve,
    Your kindness is commendable, but really, the article was a bunch of crap, not worthy of the NY Times.

    Note to Cato: PUT YOUR DAMNED NAME ON IT!!!

  8. @Steve – Well said.

    I make Cab in three different CA regions. I can damn well tell the difference.

  9. @Brad – pls elaborate damn well the three Cabs. E Kemiji, M.S. said even top tasters like himself “would find it nearly impossible to discern the true geographic origin of a well-made Cab”; he’s hopeless, and so are we, the commoners. Pls help unveil an inch or two of the mask of Napa Mystique.

  10. Susan–Brad will speak for himself, and he might offer insights into the differences between the West Rutherford Bench and the Silverado Trail, between Calistoga and Oak Knoll, between Howell Mountain and Spring Mountain. They do exist, and many tasters can tell them apart, but admittedly, not always. Those are parlour tricks, the blind identification of wine.

    But, my advice is this. Do not confuse similar characteristics of Cabernet grown in one place to another with overall wine quality.

    The suggestion that Napa pricing is vastly overblown because of marketing is sheer and utter baloney, and anybody who has ever taken first year economics understands that the laws of supply and demand can be altered by marketing but that quality is still quality whether in the broad marketplace.

    And the proof of that is the pricing of so many good Cabs from places other than Napa. Wines like Verite, Ridge Monte Bello, Chalk Hill get their prices based first on value. Indeed, there is damn little marketing attached to them yet they sell for triple digits.

    There is no doubt that the name, Napa Valley, has a special cachet. But ask yourself. How long has that cachet existed and how was it earned? I would posit that wine quality is the first and foremost factor in Napa’s high standing. No place in California and only one other in the entire world produces a broad swath of Cabernets of the quality coming out of Napa.

  11. I had a similar reaction. Newsworthy, for sure, but I cannot believe it is realistic to think that this type of fraud would be anywhere close to being widespread.

  12. 1WineDude, you are exactly correct. This particular fraud is not widespread and is quickly busted in today’s world. The NYT article really was pretty scurrilous. Most of the people who contacted me said they thought I was too kind to the writer.

  13. Anyone curious why Eric Asimov, the NYT’s esteemed wine columnist didn’t have first dibs on this story?

    I don’t feel the vitriol most of you have towards the reporter. I’m still pretty newbie in my wine studying, but my interpretation is that Napa/Sonoma/Rutherford, along with many other New World regions, have much cloudier regional personalities because of the lack of regional/federal regulations placed upon them. The idea that Napa must = “A”, Sonoma is always “B” and Rutherford invariably contains “C” is not something I have yet to discover (give me time).

    Actually, if I really started to pick those nuances up, I would find it very sad. It would eliminate the element of surprise. I find it more compelling to follow favorite winemakers wherever he/she wander, as opposed to regions, where I would come to expect a certain profile if I obsessed about the “fingerprints” like many of my fellow students do. Just not as interesting to me.

  14. Bob Henry says:

    Regading . . .

    “The suggestion that Napa pricing is vastly overblown because of marketing is sheer and utter baloney, and anybody who has ever taken first year economics understands that the laws of supply and demand can be altered by marketing but that quality is still quality whether in the broad marketplace.”

    . . . consider variable and fixed input costs.

    An example of the former: per-ton grape prices. An example of the latter: land costs.

    Recall this Wall Street Journal article profiling Andy Beckstoffer:

    “The Beckstoffer pricing formula calls for the price of a ton of To Kalon Cabernet grapes to equal 100 times the current retail price of a bottle. (This is true of all his heritage vineyards.) For example, if a bottle of Paul Hobbs Beckstoffer To Kalon Cabernet Sauvignon costs $250 (as it did at my local store) then Mr. Hobbs paid $25,000 for a ton of the fruit plus a base amount per acre that may vary. By contrast, the average price per ton of (average) Napa Cabernet is just north of $4,000.”

    [Source: http://www.wsj.com/articles/SB10001424052748704893604576200842057088206%5D

    Recall this Napa Valley Register article on reuniting the old Inglenook property:

    “Filmmaker Francis Ford Coppola has agreed to pay a record $31.5 million for 60 acres of prime vineyard in Rutherford, adjacent to a vineyard tract that provides fruit for his flagship Niebaum-Coppola Estate Rubicon wine.

    “The deal — an industry record — brings to an end the bidding war between Coppola and Robert Mondavi. Coppola will reportedly pay an unheard-of $350,000 per acre for the prized vineyard, according to industry insiders.”

    [Source: http://napavalleyregister.com/news/prized-vineyard-bought-by-coppola-for-record-m/article_2a0b0e43-3d16-5974-818c-1e161f39c7f4.html%5D

    Ego not economics drives land deals like this.

  15. Gary Millman says:

    Just because these idiots spent millions of dollars on Napa valley land does not make their wine great. And if you don’t think some incredible marketing went into producing the image of Napa as being so desirable, then you need to take Marketing 101. Many Napa wineries charge the high prices because they feel they can get away with it. For many, the prices are a result of the high costs of producing wine in Napa. But in both cases I would argue the perceived quality of the wines is driven by marketing — the so-called quality of the land, the weather, the cachet of the Napa name. Many of these high priced wines just aren’t all that enjoyable to drink.

  16. The high prices are driven first because people like the wine and thus create demand for them. Napa Cab has been in demand for decades, indeed, for over a century. And whether you like them or not, enough Napa Cab is very, very good that the world likes it, the critics like it. Cachet earned by years and years of superb wines is not marketing.

    Now, where we do agree is that not all high-priced Napa Cab is brilliant. But, then not everything from Bordeaux with prices in the $50-100 range is brilliant. As for triple digit wines, well, some are and some aren’t, and that is true everywhere.

  17. Sir Charlie – Obviously there’s controversy on NV Cabs, and it covers behaviors of greed displayed by some new comers to the money ground, the more unattainable price, the publicity bubble fueled by flashy marketing and an individual case of fraud by a moronic dude. However, the buzz has not been orientated to the quality of a premium bottle of NV Cab: It’s something undeniable and irrevocable, and if they have not tasted one yet, the pity is on them.

    Two years ago, I opened my bottle of 2005 Freemark Abbey Cabernet Bosche, and I’m still remembering vividly until today the magic taste of it. It tasted whimsically good, and I think it must have been the Tinkerbell of Rutherford Dust who did the magic. I’ll keep the (empty) bottle of it with me indefinitely for the hope of getting into the realm of fantasy frequently.

    But I’m feeling dicey towards going back to FA winery soon for tasting and getting my fantasy revived. After all, I’m fantasizing a bottle of last decade. What’s your prescription for my current Rutherford Dust craving?

  18. Susan–

    I may have a year or two, or maybe a decade or three on you, but I too recall my first FMA Bosche (1970) with amazingly vivid memories.

    There is only one prescription for your addiction. Taste. Taste. And taste some more.

    And by the way, to my taste, the wines along the west side bench, referred to by the old-timers as the West Rutherford Bench, although it really stretches from just north of Yountville to the southern end of St. Helena, is, for me, the holy ground of Cab in the Napa Valley because it is the place in which Cab in Napa got its cachet from the plantings a century and more ago. And of course, it is where Bosche sits as well.

    Sir Charlie, indeed. There is only one other person in wine who uses that kind term. You would not happen to be a friend of hers, would you?

  19. Totally agree with Charlie about the west side bench. However want to add that since its cachet first became known 100 years ago and more, viticulturalists have developed the mountains, which rival the bench for sheer Cabernet quality. However, in the mountains, there is no single, unbroken, miles-long terroir for Cab like the west bench — only isolated pockets like Diamond Creek, Jackson’s Veeder properties, Stagecoach, etc. Pritchard Hill certainly deserves mention.

  20. Bob Henry says:

    Susan,

    Anxious that you won’t be able to recapture lightning in a bottle, such as your first exposure to the 2005 Freemark Abbey Cabernet Bosche?

    Buy an older bottle from the wine auction houses’ online “retail” stores.

    Some years ago, a friend was teaching the UCLA Extension Program wine course.

    He invited me to sit in on their penultimate class: the occasion when the students brought a wine to share with their classmates.

    I brought a 1978 Freemark Abbey Cabernet Bosche, sourced from the wine list of a Los Angeles restaurant known for having wines dating back decades (procured upon release and “loving stored” all these years later).

    The instructor (who himself was studying for his M.W.) was befuddled by the wine.

    It was clearly older (color and subdued aroma/flavor) that evinced a cigar tobacco character akin to an older red Bordeaux.

    And he was perfectly comfortable declaring it from France.

    (And to his credit when I tasted it last — so as not to influence him or his students — I agreed.)

    The 1978 Cabs, hailing from a severe drought year, are among the most long-lived of late 20th Century California wines.

    Seek them out.

    Sir Charlie, your thoughts on the 1978 and 1976 drought year Cabs?

    ~~ Bob

  21. Bob Henry says:

    Gary,

    Your comment alludes to a trend seen for decades now: moneyed individuals, enamored of the “wine country lifestyle,” becoming the new “Landed Gentry” in Napa — taking their fortunes earned outside of the industry and reinvesting it in vineyards and wineries.

    Too many subscribe to what economists call “The Bigger Fool Theory.”

    To wit (or should I say “witlessly”?): whatever I spend on my operation, I can always find a bigger fool (sucker) in the future who will buy me out at a nice profit.

    Ain’t necessarily so.

    Sobering words from a winery investor in-the-know:

    Excerpts from Wine Spectator Online
    (posted November 12, 2013):

    “West Coast Wineries Are Up for Sale — Quietly”

    (Subheadline: A wave of recent deals show investors see opportunities in wine, while owners see an exit strategy.)

    Link: http://www.winespectator.com/webfeature/show/id/49221#.UoI_yAMMzG8

    By Tim Fish

    “. . . ‘I’ve never seen more wineries for sale in California than there are today,’ [said Charles Banks, who through investment groups such as Terroir Selections purchased Santa Barbara Syrah specialist Qupé in October and Napa veteran Mayacamas Vineyards in April.] . . . Banks . . . estimates that between 30 to 50 percent of California wineries are either in financial difficulty or aren’t as profitable as they could be.”

    — AND —

    “. . . While small wineries can succeed by selling most of their inventory direct to consumers and large producers have muscle with wholesalers, those in the middle — annual production of 5,000 to 15,000 cases, for example — can’t get much attention from distributors unless the brand is hot.”

    I don’t need my degree in marketing to comprehend the situation.

    An introductory course in accounting (introducing one to input costs) and economics (the laws of supply and demand) will suffice.

    You can either price your wine “up” from your input costs and build in an acceptable gross profit margin, or you can price your wine vis-à-vis your perceived peer group.

    But get it wrong due to hubris, and you will be either sitting on a lot of inventory over multiple vintages . . . or selling it off discretely through “wine liquidator” companies.

    From the Los Angeles Times “Food” Section
    (July 8, 2009, Page E1ff):

    “Deals Go Fast on Wine Sites”

    Link: http://www.latimes.com/features/food/la-fo-cheapwine8-2009jul08,0,6005303.story

    By Patrick Comiskey
    Special to The Times

    Bill Haydon has commented in the past about his erstwhile Napa Valley winery clients failing to sell through their wines at their lofty asking prices. But who had the deep pockets to absorb the storage costs and opportunity costs while slowly drawing down their inventories.

    Sir Bill, care to jump in here and elaborate?

    Bob

  22. Bob Henry says:

    Gary Millman,

    There is a comment for you awaiting “moderation.”

    Bill Haydon,

    There is a comment for you awaiting “moderation.”

    Bob

  23. Gary Millman says:

    Well here’s a bit of serendipity. I live in Santa Rosa, CA, and while shopping at a local market that carries discounted, discontinued wines, what’s there but some of the Jeff Hill 2011 Cabernet sauvignon. This bottle one of the wines mentioned in the NY Times article that set this whole business off. It was a whopping $10. And it’s really pretty good. I’ll be getting more…..

  24. @Susan – The NYT article seemed to imply that Napa was all hype. From my perspective, making Cab in Napa, Livermore and Solano, the differences between regions is not all hype. The grapes are very different and the resulting wines are very different despite me using basically the same winemaking technique.

    Bob and Charlie’s suggestions were excellent. My personal opinion is that the 2012 vintage has some similarities to the 2005 vintage. A 2012 Bosche, while much younger, might be a bit closer in character to the 2005 you adore.

  25. Bob Henry says:

    Susan,

    Click on this link:

    http://www.hdhwine.com/retail-wine-list?keyword=Bosche&Submit.x=0&Submit.y=0

    Hart Davis Hart wine auction house in Chicago is selling the 1984 vintage Freemark Abbey Bosché Vineyard Cabernet bottling for 75 bucks.

    Why buy a new vintage when you can buy a great older vintages?

    (The Bosché is fairly tannic. It needs years in the bottle to develop into the swan you are seeking.)

    A 2005 (or BradK’s suggestion: 2012) vintage Freemark Abbey Bosché can be found in the retail marketplace two ways: new on the shelf of fine wine merchants; years later consigned by collectors to wine auction houses like Hart Davis Hart.

    Exploit the laws of [diminishing] supply and demand and grab a 1984 vintage bottling while it still exists.

    As I wrote earlier, my buddy Corie Brown got it right in her Los Angeles Times article about buying older vintage California Cabs at attractive prices from the “online stores” of leading wine auction houses.

    ~~ Bob

  26. Bob Henry says:

    “As I wrote earlier, my buddy Corie Brown got it right in her Los Angeles Times article about buying older vintage California Cabs at attractive prices from the “online stores” of leading wine auction houses.”

    For those with short memories . . .

    From the Los Angeles Times “Food” Section
    (April 23, 2008, Page F1ff):

    “It’s Vintage Napa”
    [Classic California Cabs can pack a big reward]

    Link: http://www.latimes.com/features/la-fo-wine23apr23,0,4955529,print.story

    By Corie Brown
    Times Staff Writer

  27. Michael Haley says:

    Totally agree with this, thanks for writing. Having been a major focus of a NY Times article on Napa wine I can see the same pattern, exaggerate and fabricate to create drama. Totally trashy thing for the Times to do.

    And by the way, even if you don’t like Napa cab, it is not hard to tell the difference between Napa and Sonoma. Napa is generally a lot more oaky, high acid, and generally a very different style, like it or not.

  28. Bob Henry says:

    Susan,

    From my hoary archives, a Napa Valley Register “On Wine” section October 2011 article on Freemark Abbey:

    “‘Breakfast of Champions;
    Harvest is the favorite season for Freemark Abbey’s veteran winemaker [Ted Edwards]”

    Link: http://napavalleyregister.com/lifestyles/food-and-cooking/wine/harvest-is-the-favorite-season-for-freemark-abbey-s-veteran/article_b03228f4-fb81-11e0-8d22-001cc4c002e0.html

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