21st Dec 2012
Crystal ball: the wine world in 2013
by Tim Atkin
Moaning about the weather is second nature to us Brits. However stoical we may claim to be, upper lips stiffened against the wind and rain, we have had a lot to complain about in 2012. To put it bluntly, the year has been a washout. The tourism industry felt it (the Olympics weren’t the boon people predicted), the English wine industry and farmers generally felt it, and the wine trade sure felt it, too.
It wasn’t just the absence of a summer that damaged wine sales. Increased duty rates and straitened family budgets have made things harder this year, especially in the on trade. I was having lunch with the MD of a major agency company a couple of weeks ago and he said things are worse now than at any point in the last 30 years: flat sales, bad debts and dwindling margins.
In such circumstances, it’s difficult to be cheerful about the next 12 months. Not even George Osborne is optimistic about our economic prospects. But there are one or two candles of hope amidst the enveloping gloom. Here are my predictions for 2013.
1. More wine businesses will go to the wall, following the example of D&D and Waverley. Consolidation is very likely, especially in the agency and wholesale sectors. The retail sector has already been trimmed to a sliver, although more independents will crop up in the premises of old off-licence chains, bringing much-needed diversity (if not necessarily profits) to the wine trade.
2. The implications of inclement weather – and short crops in many European regions – will be apparent this year. Own label suppliers may struggle to find the volumes they need, particularly at the prices supermarkets are – or rather were – prepared to pay. More emphasis will be placed on premium own-label ranges, such as Finest, Extra Special and Taste the Difference, where margins are a little more forgiving. If supply has outweighed demand in recent years, the opposite will be true for certain wine styles in 2013.
3. Wine prices will rise as a result, although this is not necessarily a bad thing. The average price of a bottle of wine in the UK is still marooned below £5, despite the fact that we have some of the highest duty rates in Europe. So low are our prices – thanks to our deal-obsessed culture and the retail wars between the supermarkets – that many producers cannot afford to do business here any more. Persuading consumers to pay more for good wine is essential.
4. If it is introduced in 2014, minimum unit pricing will affect vodka and cider more than wine, potentially improving the poor image of alcohol as a “binge drink”. If anything, this should prove a good thing for the wine business, as it will prune the bottom end of the market. Outlawing three for £10 and the like could also be a positive piece of legislation. We all know that such wines are invariably filthy or sold below cost, so good riddance to them. The debate will continue in 2013.
5. Low alcohol wines (by which I mean the stuff that is artificially engineered, rather than Moscato d’Asti and Mosel Riesling) will begin to fall out of fashion. I’m all in favour of people drinking wines at 11.5 or 12% alcohol, but a lot of the low alcohol products on the market taste of very little. Let them drink fruit juice.
6. “Natural” wines, which engaged the chattering wine classes (but almost no one else in 2012) will also begin to lose their appeal. There is no definition of a natural wine, no legislation to protect the consumer and way too many faulty bottles being flogged by wine merchants and sommeliers as an expression of “terroir” or part of the counter-culture. Let’s champion organic and biodynamic wines instead.
7. Wine journalism will continue to evolve towards a greater spread of viewpoints, most of them on line. If it is true that Robert Parker has sold a majority shareholding in the Wine Advocate – and is presumably starting to step back from the publication he created – this will weaken the strongest voice in wine criticism. In my view, this can only be a good thing, since Parker (for all his virtues) has been too powerful for too long, overly influencing the styles of wine made in Bordeaux and the Napa Valley in particular.
8. New, or rather rediscovered wine countries, are beginning to emerge onto the world scene, helped by listings in Marks & Spencer among others, and a renewed interest in indigenous grape varieties. Turkey, Greece, Georgia, Croatia, Italy and Portugal all offer wonderful and largely unknown flavours.
9. In France, it’s time that the Languedoc (especially Faugères, La Clape and Terrasses du Larzac) gained greater recognition. In fact, it’s time for a re-evaluation of what constitutes fine wine. Bordeaux appears to have had another decent rather than exciting vintage, with several UK merchants saying that they won’t be visiting the region in April for the en primeur tastings, so we should start to look beyond the Gironde. The focus will switch to Burgundy in 2011 and 2012, with prices pushed up by tiny volumes in the latter vintage.
Whatever happens, we desperately need some decent summer weather in 2013. If we do, the wine trade will sell more booze and save hundreds of job. If we don’t, we can always moan about the rain. See you in 2013!
Originally published in Off Licence News
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