My Grapefruit is corked!

Yep, you read that right!

I'm a sucker for red grapefruit and I noticed that our local supermarket has one of its regular "3 for €2" deals running that includes nets of red grapefruit. Each net has 4 or 5 grapefruit - so for €2 you can get 12-15 red grapefruit. Not bad...but if it seems to good to be true, then....

Every single one I have tried has been "corked". Exactly the same smell and taste as a wine tainted with TCA. Even my fingers smell of cork taint after peeling one. So I Googled "corked fruit" and it turns out I'm not going loopy (well, not on this occasion anyway) and it's possible for fruit to be affected by TCA in the same way as wine - with fruit it's the wooden boxes it comes in or storage that can cause the problems.

Maybe it's just our local shop, and just my bad luck, but my guess is that there's a reason you can buy 12-15 of them for €2....

So if you've never had a corked wine and you also like red grapefruit (I suppose that narrows the numbers down a bit) nip out to your local supermarket and see what you're missing! You might be lucky.

Budget 2014 - The Aftermath...

It’s the middle of November – we have to move on and stop the whingeing….but just one more lash…..!

My predictions for the budget turned out to be (predictably) way off the mark. It was probably too much to think that the Government would reduce Excise Duty, but the fact that they increased it really surprised me. Proof indeed that Lobby Groups work – what was that? Oh yes, there is no independent wine group/lobby in Ireland…..

The Government’s promise, belatedly, to “look at” minimum pricing on alcohol means that their excuse for raising Duty in the interests of protecting health is just a sham and a smokescreen. The fact that they permit below-cost selling of alcohol whilst claiming to protect our health by charging us more is laughable. The introduction of minimum pricing is a step in the right direction – but how long will it take…..

In the meantime, here are five things that I predict will happen…

No. 5

 

Cashflow will become very tight for importers and distributors. Excise Duty is paid to the Revenue at the end of every month irrespective of whether they have been paid by their customers. The charge is based on the volume of wine taken out of the warehouse during that month. A year ago, every 1,000 cases taken out would incur a Duty cost of about €24,000. Now it’s just over a staggering €38,000. And the importer or distributors might not get paid by their own customer for 60 / 90 days – or longer – or not at all. But the Revenue have their cash.

 

No. 4

Some smaller (and possibly larger) companies will go bust. It’s simply not possible to cashflow the purchase of wines (which generally must be paid to the producer after 60 days), cashflow the Excise Duty after 30 days – and then not get paid for more than 90 days…

No. 3

As a consequence, there will be a loss of diversity. Your choice of wines on the shelf will contract as only the bigger importers or retailers can afford to outlast all the rest. There are some amazing niche importers with wonderful wines who don’t use warehouses – they are generally too small. But guess what? Instead of paying the Excise after 30 days, they actually have to pay it in advance! Even before it lands on Irish soil! Even before they physically sell a single bottle. Now apply that 62% increase in Excise over the last 12 months to their scenario….

No. 2

You will get a lower quality of wine. Some people just don’t want to pay any more than they were paying before. This applies to restaurants and hotels as much as it does to the punter looking for a bottle of wine to take home. So if you paid €8 for a bottle of wine a year ago, there is now an extra €1.50 (at least) of tax and mark-up in there. If you’re still getting a bottle at €8, there’s only one thing that can have changed – the cost of the actual juice in the bottle. Be prepared for some pretty gut-wrenching stuff coming your way. And I don’t mean stuff that costs €1.50 from the producer (there can be a lot of very decent stuff) – I mean stuff that costs 40 to 50 cents. At that level it’s not really wine, it’s an industrial liquid manufactured like many other industrial liquids. And that’s not snobbishness – it’s a fact.

No. 1

Smuggling. Wine has suddenly become very attractive to smugglers. And I don’t mean going to Newry and stocking up your van in the Buttercrane centre and selling a few cases to your mates. Yes it happens, but you still have to pay the UK Excise.

The Revenue’s Annual report for 2012 has some interesting details on “Excisable Products Seized in 2012” (Page 47). There were just over 8,000 seizures of cigarettes yielding a not insignificant 95 million fags. Clearly this is an on-going challenge. I wonder why? Oh yes, the tax is so high that it is therefore attractive to smugglers.

There were a significantly smaller number of alcohol seizures….. just 359 in total, bringing just over 33,000 litres. Much of this was illegally produced spirits, or blended spirits, or guys making poitin – and so on. But even if we assume it was all wine, it would be just over 3,500 cases. Sounds a lot?

 

Well, consider this. The average 40 foot truck can hold anywhere between 1,000 and 2,000 cases depending on how they are packed. Let’s just say you deliver to Europe on a regular basis, but your truck normally comes back to Ireland empty. If you stop and fill it with wine in e.g. France (where there is negligible tax), and decide not to declare it on entry, you are saving just over €75,000 in Excise Duty. That’s a pretty hefty pile of cash. And that’s just one truck.

Then consider this. You’re a bar / restaurant / hotel that is under pressure on pricing. All the regular companies are coming in with their wines, but they are all a bit expensive because of the high Excise. You can suddenly get your wines much, much cheaper from a local fella who drops them off once a week. Not all your wines – maybe just the stuff you use for weddings / functions where you only need a red and a white and price sensitivity is key. So you take 20 cases a week. And there are another 20 like you in the locality. That’s 400 cases a week – and the truckload of wine is gone in about 1 month. Somebody just made €75,000. For the consumer, there is absolutely no way to identify if the wine has had the Excise Duty paid.

Now consider this. How many alcohol seizures (specifically wine) have been at Ports – you know, the type of places that lots of trucks pass through? As far as I can see, none. Zero. Zilch.

I think wine smuggling will become the new petrol smuggling. How sad.

Budget 2014 - the beforemath....

It’s late Sunday evening and I’m about as far away from Irish news as could be possible. In fact, I’m surrounded by millions of tiny fruits flies, covered in bits of dried grape “gunk” and I look like someone just split my head open with an axe – but thankfully it’s just fermenting grape juice.

But even here, the Budget looms large. Not so large that we’ll all take a break on Tuesday afternoon and gather round the internet radio and listen to Minister Noonan’s speech – but more that whatever happens in terms of any changes to Excise Duty has a direct impact on the success, or otherwise, of the endeavours of all those around me. It seems inconceivable that the Minister takes more than the average winemaker gets for labouring all year – but I’m probably a bit too close to it all at the moment……

However, I have been asked to write an “opinion” piece on the Budget and what is announced by Minister Noonan on Tuesday. I just thought I might give it a go now – get it out of the way, in advance of the budget – just in case I fall into a vat of fermenting juice, or get abducted by aliens, or win the Lotto…

So here’s my piece on what happened in Tuesday’s Budget, before it happens…..

Yesterday’s Budget brought a mixed bag of changes for the Irish Wine trade. It has been apparent for a good while now that the lack of an effective lobby group – or indeed any group at all that represents wine importers and retailers exclusively – has meant that our little voices are never really heard. The big boys looking after beer and spirits can make a lot of noise – look what happened to wine at the last Budget.

But at least there has been some relief – albeit possibly temporarily – and for once there seems to be some joined-up thinking in relation to the taxation of alcohol in Ireland.

-          The 50 cents per bottle (incl. Vat) reduction in Excise Duty for Wine is most welcome. With falling sales and smaller independent wine retailers feeling the pinch – actually more like getting whacked over the head with a mallet – it would be nice to think the Minister took heed of our plight. The reality is that it was more likely to be potential EU pressure on the disproportionate taxation of wine that brought about this reversal. And any budget is always a mix of give and take… the take will come later.

-          The increase of 10 cents (including Vat) on a pint of beer seems fair in relation to the way in which other alcohol, primarily wine, has been taxed. It brings the relative taxation of the two much closer together – something that should have been recognised sooner. This additional revenue will more than make up for that lost by reducing the Excise on wine.

-          The commitment given by the Minister to introduce legislation to ban below cost selling of alcohol is long overdue and very welcome. The incongruity of raising taxes on alcohol with protecting “Health” as the reason, whilst simultaneously allowing it to be sold by the choice of the retailer at the same price of a large bag of crisps never seemed to bother the Minister. But at least the message seems to have got through. Below cost selling of alcohol is not only irresponsible, but it also costs the State as the retailer can claim a Vat rebate on the difference between the cost price vs. the (lower) sales price.

-          A reorganisation of the licencing charges is also welcome. It undoubtedly favours the smaller, independent retailer – but why shouldn’t it? We should be protecting diversity – and those who sell more, should pay proportionally more. This also fits with the Health objectives. Holding the current annual fee the same for wholesalers and retailers with turnover of less than €750,000 from all alcohol sales, and increasing it by 0.5% of turnover above this level makes sense.

-          The proposal to introduce a so-called “lid tax” is potentially the most contentious issue. Thankfully the Minister has given notice of his intention to legislate in this area in the future– rather than introduce an ill-conceived scheme in this Budget without due consideration. The potential legislation is complex – would it be a flat tax on all sales revenue, or different rates based on alcoholic strength? And will all alcohol be taxed fairly and proportionally? Furthermore, the idea for this tax grew from the desire to find a replacement source of revenue for sporting organisations who say they will lose out if alcohol-related sponsorship of sporting events is banned. So would the revenue from this tax be ring-fenced for sporting bodies – and what is the exact legislation proposed in relation to the sponsorship ban? So there are many complex issues to consider –and if it is to be done successfully and intelligently, it takes time -  but it will most likely lead to some form of increases in the next Budget, but thankfully not for now.

So overall, from a purely wine-related perspective it was a welcome budget.

But was it……?

Ho Ho Ho - or - Hoe Hoe Hoe

The two sound the same, but the huge difference in physical exertion is very dramatic! Neither are particularly photogenic though!

Vines from the nursery

Preparing them for planting - the green wax covers the graft between rootstock and vine

Surprisingly, the planting of a new vineyard is rather unimpressive from an equipment point of view. Of course you can have the vines planted by machine – even a satnav controlled machine to ensure exact spacing between vines and rows, but we opted for the good old-fashioned planting by hand. Well, more like planting with the special fork-like metal rod that inserts the vine roots into the ground as you stamp heavily on it – but not too hard that you actually break the young vine. Of course, all of this is after everything has been measured by hand – or bits of wood and string in our case. We decided to go for 65cm between the vines in each row (so we will have a short shoot and low yield) and 2.2 metres between the rows, so we can fit a tractor between them when necessary.

Planting was quick, fun and very fulfilling….!

Oh, if only a new vineyard could just be that easy….

It all looked wonderful for the first few weeks. Then the weeds started…. With a new vineyard you have a couple of choices – or maybe “cheats”. Firstly you can decide to cover each new vine with a white plastic “sheath”. This protects the vine to a certain extent from hungry foragers such as rabbits and deer (unless you have your vineyard fenced – we don’t) but it also allows you to spray the soil around the vines with weedkiller as the vines are protected. However the downside is that if it gets very hot during the summer, the vines can sweat and wilt in the plastic coverings. 

Notice the areas that have been sprayed with weedkiller

The other “cheat” is that you can opt not to use plastic sheaths, but apply a pretty heavy dose of weedkiller onto the surrounding soil immediately after the vines are planted – before the new shoots break the wax seal. Again, the vines are in theory protected – and the weeds are zapped.

We opted to do neither – mainly because the old land has not had pesticides on it for about 15 years and we want to try and keep them to a minimum. But the trade-off is weeds – and plenty of them. Not just weeds that grow in the surrounding soil, but weeds that creep, crawl and attempt to smother your vines – hello convolvulus!

The vines are too small to use any form of mechanisation, so the only way to deal with them is to take out a good old-fashioned hoe and start bashing away…

All 1,623 of them…

In rows up a steep hill…..

Clearing an 80cm wide path all the way up…..

In 30 degrees Celsius heat…

At the rate of about 110 vines per 120 minutes…

It’s funny how you can start to see the attraction of pesticides…

Job done - temporarily....

Anyway, job done – and the vineyard looked like a perfectly trimmed front lawn! Until the weeds started again….!

They're coming back....

AARRGGGHHH...

But we kept at it – and now as Autumn approaches we’ll get a break – until next Spring…

Off With Their Heads

Ok, not another rant about Excise Duty – but don’t worry, plenty more of those to come…

For anyone who can follow the bizarre timeline of this Blog, we’re now jumping back in time to May of this year. Readers will know that we had been clearing and preparing a a new vineyard for Modra Frankinja (Blaufrankisch) with a view to planting some 1,600 vines that will bear fruit in three years time – and for many more years to come…

But there’s always a shortcut! The planting of vines – and waiting – is all very much part of the natural rhythm of a vineyard (although there’s plenty of work to be done – big whinge coming up..), but experimentation is also fun!

Fritz Becker in Pflaz had mentioned casually that they were getting some older vines “head” grafted to Pinot Noir – there are various teams of specialist “grafters” who work their way through Europe each Spring and field-graft a chosen new variety onto an existing rootstock. The idea being that the new “vine” gets the benefit of older, established roots (and potential complexity), along with the advantage that the fruit-bearing part of the pant will produce fruit the following year – no 3-year minimum wait!

Apparently it became very popular in California some years back following the success of the film Sideways – Merlot fell out of fashion and growers needed Pinto Noir – and fast! Here are a few pretty enthusiastic converts..

Technically it’s called T-Bud grafting – and there are many varied opinions about how easy or difficult it is to perform – and how indeed to actually perform it in the first place. I came across a couple of videos and the odd document – but after that, there isn’t much other than individual practical experience.

So I decided to give it a go! To say that locals through I was a bit mad was an understatement! Firstly, I had to get some buds for the grafting – and the only place was the nursery where we had just purchased the young MF vines. Essentially I was asking them to give away their product for free – they make their money by doing the grafting over the winter onto young rootstock and here was me going, “can I have some of those buds and I’ll take them away and do it myself please…” But surprisingly, they agreed. Probably because they thought I was mad. 

The next challenge came when wielding a saw in the vineyard – quite simply, you have to cut the whole top off the existing vine. No half measures. I have chosen to behead a row of old Sipon vines. A few friends dropped by to see if I really would go through with it – and shook their heads in disbelief. “It will never work….”

Ooops - the top just fell off... honest..

Chopping off the tops of the wines wasn’t the problem though. Everything I had read or watched was pretty clear about what to chop, where to chop, what incisions to make in the bark etc. – but all also mentioned “white tape” to bind the graft once completed. But what type of “white tape”? There are many, many options – and of course none seemed suitable!

So I started with sliver/back duct tape! Well, it was all I had to hand. Then I realised it might not hold the bind so well in the rain (as the seal needs to be closed to avoid contamination) and I went looking for an alternative option. I settled on masking tape – it has great grip, some elasticity (important as graft grows) and seemed to be pretty weather resistant.

May - job done!

Waiting.....hoping....

June - early indications looked promising

But for any budding (ha – no pun intended!) grafters out there planning to behead your vines I can now exclusively reveal that plain old masking tape will kill the grafts! It must be something in the glue compound, but every single graft I did that was sealed with the masking tape failed. Most of the ones done with the ugly duct tape worked!  Months later (jump forward to August) and some of the grafts are looking really healthy. Next year the will bear fruit. Success!

August - a successful graft - but notice silver duct tape!

Some of the older vines better watch out next Spring – might give it another go with proper tape!

Exercise your frustration on Excise...

Following some interest in a Blog I wrote last May - Anyone Up for a Fight? - and given the upcoming Budget, I decided I’d have a rummage through the Department of Finance website to see if there was any more recent information.

My contention in the original Blog is that the Excise rates applied to Wine are unfair in relation to those levied on beer. And it’s not just my own personal opinion – the documents noted that “The EU Commission challenged Ireland some years ago about what it considered an unacceptably favourable treatment of beer (a largely domestic product) as opposed to wine (a largely imported product).” Indeed, the European Commission took a case to the ECJ against Sweden for exactly that in 2008, which although unsuccessful at the time, set a number of interesting precedents that I believe are now relevant in the way Ireland taxes wine relative to beer and spirits.

Much of the original material had come from documents produced internally by the Department’s own Tax Strategy Group (TSG). They produce briefing documents on various revenue collecting subjects, including Excise, and their reports are circulated in advance of each Budget.

However they are not released publicly until long after each Budget. So I discovered all the TSG documents for 2012 had suddenly appeared on their website just recently. And the one on Excise made very interesting reading…

Remember that all of these figures are PRIOR to last year’s budget in which Minister Noonan raised Excise Duty on wine by €1 a bottle including Vat, claiming that the increase, along with much smaller increases on beer (10 cents on a pint) and spirits would generate an additional €180 million.

So BEFORE he made those decisions in the Budget, he was told by his own Tax Strategy Group that:

• If he simply brought Irish Excise rates for all alcohol products into line with those in Northern Ireland, there would be a total GAIN of €209 million to the Irish State. In the case of Wine and Beer, it would have meant an extra 20 cents on a pint and 41 cents on a bottle of wine. Guess which one lost out…

• That the Excise rate for beer in Ireland was just over 100% higher than the EU average, and that Excise on wine was already a staggering 400% higher than the EU average.

Following his hikes, it’s now more like wine is 600% higher than the EU average.

You can read the full TSG document here – TSG General Excise Duties Budget 2012 - just remember this was all prior to last December’s budget.

Surely there is a case to be made, particularly since the last Budget, that wine (a largely imported product) is being taxed unfairly in relation to beer (a largely domestic product)?

Pruning Madness...

Of course, there’s still an “old” vineyard to look after as well. It’s easy to be seduced by the excitement of planting new vines, but the annual cycle continues in the rest of the existing vineyard.

Looking a bit snowy...

Pruning is one of the most important tasks as it sets the “template” for the growth of the vine during the coming season. Some producers prune prior to the Winter – November pruning is common in Burgundy. Others prune in the Spring, and that would be more common here.

Plenty of work to do

The challenge for us is predicting when “Spring” actually will be – driven by the desire to find inexpensive flights. Let’s just say that pre-booking cheap flights and anticipating Nature don’t go hand in hand! So back in February we landed in rather wintery, snowy conditions!

Let’s just say there were a few curious glances from the locals (who of course had the luxury of waiting until the snow melted) and no doubt a few comments about the “mad Irish” as we waded up and down through the vineyard in the deep snow.

Deep snow!

Still going....

But it was great fun – snow is actually very warm to work in – and we developed a theory that actually pruning in snowy conditions is much better for the vines as the cold weather minimises any chance of disease developing.

Done!

 Sounds plausible……just....

KT3 and Clones

The title sounds like something straight out of Star Wars or Total Recall!

Back in the mid 1800’s a disease spread through Europe’s vineyards, destroying almost two thirds of the continent’s vineyards. Needless to say panic set in, and the origin was eventually found to be a small insect that attacks the roots of the vitis vinifera vines called Phylloxera. It quite literally wiped out most of Europe’s vineyards within a couple of years. Frantic research traced the origin of the louse back to America, but also uncovered the critical discovery that American vines seemed resistant to it.

Enter the amazing skill of grafting. By taking an American rootstock, resistant to Phylloxera, and grafting a European vine onto it, European wine growers could begin to re-plant their vineyards and maintain the original vine’s character and quality. Those vineyards that hadn’t already been destroyed were also ripped out and re-planted. An enormous task.

Today, virtually all of Europe’s vineyards are planted with grafted vines. There are a handful of “pre-phylloxera” or deliberately planted ungrafted vineyards, but phylloxera is still a very real threat and the producers coaxing these vines to produce fruit every year acknowledge the scale of the challenge. Bernard Baudry’s amazing “Franc de Pied” Cabernet Franc that we import is made from ungrafted vines, but Matthieu recently acknowledged that Phylloxera is claiming more and more vines and they are slowly losing the battle and the wine will most likely not feature as a single bottling any more.

So effectively every single vine planted today is a grafted vine, involving two very different aspects: the vitis vinifera variety (the vine itself – generally called the Clone) and the American originated  (phylloxera resistant) Rootstock that it is grafted onto.

This can offer a bewildering choice of options for the producer. Take Pinot Noir for example: there are over 20 commonly/commercially available clones. Some offer high yield (the amount of fruit the vine will produce), some promise low yield. Some flower early, some late. Some are good for sparkling. Some originated from specific regions. All have very sexy names such as Clone 777 or Clone 828 (classic Burgundian clones). A quick look here will give you an idea of the some of the Pinot Noir options available: Some Pinot Noir Clones

Or you can choose a grape variety that seems to have a very limited choice. We soon discovered that Blaufrankisch / Modra Frankinja was one of those! The search for information is not helped by the variety’s origins in Hungary – a country whose language is completely impenetrable. Blaufrankisch (Kekfrankos in Hungary) is an “autochthonous” variety – one that is a result of natural cross breeding or mutation in a particular region and generally has a unique association with just that region. Although it is generally believed to be a cross between Zweigelt and St. Laurent, detailed information about different options for planting were very limited given that it is unique to a relatively small region. Any commercially available clone requires someone to have actually decided to produce that clone – and know what characteristics that clone will offer.

We hit the road on the search….. and quickly realised how difficult the task was. Some of the encounters were hilarious: a vine nursery proudly showing us pictures of the Blaufrankisch vines they had available – vines laden down with high yielding, dilute grapes – and when we pointed out that we wanted low yield, low vigour, we would told “don’t worry, the photo is wrong (!), these are definitely low yield”!! Yeah, and we’ll only discover the truth three years from now when the vines mature after a lot of hard work….

We finally found a nursery that seemed to at least have some options available. Many producers want a high yielding clone (of any variety) – lots of volume, fruit and a higher income if you are selling it e.g. to the local co-operative. Some people can look at you a bit strangely when you tell them you want a plant that isn’t going to produce that much fruit….. So we finally found a clone called KT3 which seemed to offer low yields and open bunches. Out of 500,000 grafted vines produced annually by this one nursery, just 10,000 were of KT3, so little is the demand for a low yielding clone.

KT3 Clone in the nursery

The second element is the rootstock. Again, there are many choices available. Low vigour, high vigour, rootstock for clay soil, sandy soil, limestone etc. etc. I have to say that Nigel Greening’s opinion (owner of Felton Road) makes the most sense to me: of course, pick a rootstock and clone close to your requirements, but ultimately those vines will adapt to the unique soil that they are planted in. The result is ultimately what one could call terroir: the marriage between the planted vine and the soil. So we chose a relatively standard rootstock called Binova – low vigour and a good all-rounder.

Open bunches - typical of KT3 clone

All of this requires planning – and trust. It’s October at this stage and the vines need to be booked for planting in May. Generally by the end of October a nursery will have sold everything, they don’t want to produce plants that won’t be sold. They will be grafted over the winter and all we will receive boxes of long think sticks, with wax seals at the end of each, concealing a tiny bud that will burst out in the Spring and bring with it the hope and expectation of many years of wonderful Modra Frankinja. 

But we won’t fully know what we have got until long after they have been planted in the soil. It’s a trust thing….

Planning ahead

Sometimes you have to go back to go forward....

In this case, back to October last year - and the start of planning for a long term project. Since tasting Modra Frankinja / Blaufrankisch about 4 years ago, we have been continually impressed by the variety - and the potential for growing it here in this region.

We were initially enthused - and hugely influenced - by our experiences with Roland Velich of Weingut Moric (Profile here....) and whose wines we are lucky - and proud - to import into Ireland.

This region here in Slovenia has traditionally been a white wine region, but red varieties are becoming more common. Of course, there are the "sexy" varieties like Pinot Noir, but we're not convinced about its potential here. Modra Frankinja (the Slovene name for Blaufrankisch) has one of the longest growing times - from flowering to harvest, and it produces a lovely, juicy fruit that even in high temperatures can retain a wonderful acidity and elegance. Of course a lot is also determined by what happens in the cellar, but to us, "MF" should be silk, elegant, juicy, long and characterful - not unlike a strange hybrid of Pinot Noir and Syrah.

This is what we started with!

So last year we decided we would clear an old vineyard and plan for planting young MF vines. The wine-growing year is never quiet (except perhaps in August) so we had to fit all the work in around harvest time. Working established vines is a true skill, but there's also something fascinating, and ultimately skillful about preparing land that will host the hopes and expectations of generations of winemakers in the years to come. What we do/did will set the groundwork for whatever wines we enjoy out of bottles in the years to come....

Still going..... thought this was supposed to be easy!

Getting there..... great pleasure burning the scrub!

It's steeper than it looks.... plus more angled to the side!

Looking a bit better now...

One of the most fascinating aspects of the early preparatory work was seeing what soil - and rock - structure we had. The whole region is part of the old Pannonian sea bed, so although we are hours from the coast, we easily found old sandstone and fossils in the soil. We have heavy clay of anywhere between 1 metre and 3 metres depth over this seabed base. This gives us a perfect combination of water retention in the long, dry Summer and yet the complexity of minerality that will feature as the vines age and the roots burrow their way into the old seabed.

After all that, we had to go looking for the right clone and rootstock - something that proved a little more challenging than we expected.....

We Got Rain !

Finally.

And Thunder. 

And Lightning.

And Wind.

But thankfully no hail...

Somewhere between 35 and 45 mm of rain over about 12 hours. Good enough to keep the vines - especially the young ones - going.

Now it's sunny and warm. Most importantly we have a good breeze which will dry the fruit and reduce the chances of oidium.

It's Hot Out There...

Bloody hot in fact. Somewhere just over 40 Celsius in the shade – and over 50 Celsius in the direct sun in the vineyard. I know many vineyard regions in France have been hit by devastating hail, but our challenge here in Slovenia right now is the heat.

It hasn’t rained since June 24th and the total rainfall since the beginning of June has been a paltry 19mm. That’s not much to produce a couple of tons of juicy grapes per hectare.

Shoots still standing proud in 50 Celsius!

But vines are pretty hardy things, and the shoots till stand tall and proud, even in the afternoon sunshine. We have our own storms forecast from tomorrow and Saturday and we are holding our breath in relation to hail.

In the meantime, we’re all hiding inside – and this is the first chance we have had to catch our breath and update the Blog for a while.

Lots to come in the next few days……..

Graham's 2011 Vintage Port Offer

“The best 2011 reds anywhere” – Jancis Robinson, May 2013

That’s a pretty bold claim to make – the best red wines made in the world in 2011 – but the praise for 2011 Vintage Port has been unanimous.

And when you consider the rather higher prices for most of Bordeaux, Burgundy, Barolo, California and iconic Australians, Port offers exceptional quality for the price. Admittedly it’s not a regular feature on most people’s shopping list, but when a vintage like 2011 comes along, it’s literally a chance in a lifetime to acquire something really special.

A few weeks back we ordered some mixed cases of 2011 Vintage Ports for our own stocks – so impressed were we by the reports - but out of the UK.

Now we have been able to put together an offer that brings one of the very top and most highly rated wines, Graham's Vintage Port 2011, directly to Ireland. And at less than what we paid from the UK! We are really excited about being able to offer it. Take a look at some of the amazing reviews:

Graham's Vintage Port 2011 Reviews

There are just 5,000 cases of Grahams 2011 declared. This will be very, very special in the years to come. If there is one 2011 vintage wine you treat yourself to from anywhere in the world, this should be it. For a birth year, an anniversary, a treat, a gift…..and you have the option of half bottles.

Grahams 2011 Vintage Port @ €285 ex. Vat per 6 x 75cl bottle wooden case
Grahams 2011 Vintage Port @ €295 ex. Vat per 12 x 37.5cl bottle wooden case

The price includes all Excise Duty, Shipping and delivery to you in October this year. Stocks are limited and all orders are subject to confirmation

Anyone up for a Fight...?

OK, I have to get this out of my system….

I have had a pile of paper sitting on the ground by my desk for the past few months. Since December 2012 actually, dating back to a flurry of post-budget activity when the Irish wine trade was walloped over the head by the huge increase in Excise Duty.

I’m wary of raising the whole “whining” issue again and to be honest I couldn’t care less about the repetitive arguments as to whether or not an affluent middle class person can or cannot afford to do without a bottle of wine now. Nor is it about the vague excuse of tackling alcohol abuse that was given as justification for the rise – that was a smokescreen, and our dangerous relationship with alcohol excesses of all forms will not be solved by simple tax increases. Nor is it a rant about the continuing failure to legislate to ban below cost selling of alcohol – alcohol abuse, hello?

This is purely about the Excise treatment of Wine, relative to other forms of alcohol. And it’s very interesting – and surprising. It’s also long – but please persevere…..

We all know that Minister Noonan stated that the Excise increases on alcohol in the last budget would bring in a projected additional €180 million in tax revenues in 2013. But wine took the biggest hit, so how much would it be expected to contribute to that €180 million target?

There’s a Unit within the Department of Finance called the Tax Policy Unit that produces, among other things, a “briefing” document each year on General Excise Duties in advance of the Budget. It may have been abolished, since I can’t find the document for December 2012’s budget. But since Excise rates didn’t increase in December 2011, it can be taken that the assumptions were the same for 2012. The document simulated a number of possible Excise increases and the benefit in terms of additional taxation revenue, including 10 cents on a Pint of Beer and €1.00 on a bottle of wine. Fast forward a year and, hey presto, Minister Noonan acted on the scenarios and we can see that his €180 million will come from:

10 cents on beer brings €73 million

10 cents on cider brings €10.2 million

10 cents on spirits brings €38.2 million

€1.00 on a bottle of wine brings €65.48 million

We’ll come back to these figures and their projected impact on the market later….I believe they will come back to haunt Minister Noonan

You can read the whole document here: Tax Policy Unit

There are a couple of other really interesting things in it. Firstly – and this really surprised me – on page 10, there’s a section called “Cost of Alignment of Irish Excise with UK Rates”. Bear in mind this was before either Irish or UK Excise changed, i.e. pre-December 2012. The figures show that Minister Noonan would have achieved a GAIN of €92 million by bringing our Excise into line with the North. That’s over 50% of what he was looking for.
 

Why did he not do this? Well, my guess is because it would have involved increasing Excise on beer by a greater amount – and we all know that wine is just consumed by middle-class yuppies who can take the hit. Oh yeah, and there’s a pretty strong beer lobby, and one or two pub-owning politicians. Any TD’s that own wine shops? Thought not.

But away from gross generalisations about class (not that our Minister would make such a mistake of course), there’s an even more interesting nugget. Page 11 deals with the normally mind-numbing topic of “Issues at EU Level”….

42: “The EU Commission challenged Ireland some years ago about what it considered an unacceptably favourable treatment of beer (a largely domestic product) as opposed to wine (a largely imported product).”

43: “The Commission has been unsuccessful in an ECJ case against Sweden on this issue and the matter has not been pursued with Ireland. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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No, that’s not my keyboard going wonky – that’s the bit that the Department of Finance don’t want any of us to read about the why, how, what and when of the whole little nasty business of some EU heavies putting pressure on Ireland about Excise rates on Wine. What could be in there that is deemed unsuitable for us to see?

 

So I went looking on the Internet…..

Firstly, here’s the Summary Judgement of April 8^th 2008 in relation to the case the European Court of Justice took against Sweden for this alleged discrimination against wine in favour of beer.

European Court of Justice Summary Judgement

The ECJ lost. But why? And why are the Irish officials so worried?

Here’s the full judgement: European Court of Justice Full Judgement

As with everything that people don’t want you to see – it could have some very interesting ramifications in light of the recent increases in Ireland. But back to 2008 first – why were the EJC unsuccessful in their action against Sweden? The court decided that:

A national taxation system which taxes wine, which is mainly imported from other Member States, more heavily than beer, which is mainly a domestic product, and which is based on the taxation of the percentage of alcohol by volume of the wine and the beer, does not appear to have the effect of affording indirect protection to national beer and therefore is not incompatible with the second paragraph of Article 95 of the Treaty (now, after amendment, the second paragraph of Article 90 EC) since, on the one hand, the difference between the price of strong beer and the price of wine in the intermediate category, in competition with that beer, is such that the difference in the tax treatment of those two products is not liable to influence consumer behavior in the sector concerned and, on the other, it is not shown by the statistical information regarding sales of the products in question that there is an actual protective effect.

I recommend you read the full document – it’s fascinating – but at the end of the day, it seems to boil down to two things:
a) Increases in Excise on Wine didn’t seem to encourage people to switch to beer

b) Sales of wine apparently didn’t suffer

 

But that’s a big simplification – you need to read the document as there are fascinating parts that are unique to the Swedish market that would/could be interpreted totally differently in the context of the Irish market.

 

So before we all become middle-class wine drinking yuppies who are also amateur lawyers, let’s get a few facts regarding the Irish situation out of the way:

 

Historical Excise treatment – prior to December 2012:

• Excise on Beer remained the same from 1994 to 2010, when it decreased by about 20%
• Excise Duty on Wine was increased by 50 cents a bottle in October 2008, but was then reduced by 20% in 2010.

Excise Receipts – from 2001 to 2010:

• Excise receipts to the Exchequer from beer fell by 27.4%
• Excise receipts to the Exchequer from Wine increased by 95.2% over the same 10 year period

 

Consumption – from 1994 to 2011:

• Consumption of beer is some 20,000,000 litres annually, much the same as it was in 1994 – but it rose and subsequently fell in the intervening period.
• Consumption of Wine has increased from about 51,000,000 litres per annum in 1994 to 87,000,000 litres annually.

 

Relative Taxation:

So much for “pure” headline figures. What about how the Government taxes the two alcohol products in a relative way – how much does the Government get per litre, per % of alcohol?

 

Pre-Budget December 2012

• Still Wine Excise brought in €0.2098 per litre, per % of alcohol (12.5%)
• Beer Excise brought in €0.1571 per litre, per % of alcohol (4.2%)

So wine was proportionally considerably higher, with 5.27 cents difference between the two

 

Post-Budget December 2012

• Still Wine Excise now brings in €0.2965 per litre, per % of alcohol (12.5%)
• Beer Excise now brings in €0.1913 per litre, per % of alcohol (4.2%)

So wine is again higher, and the gap has grown to 10.52 cents difference between the two since the Budget. That’s a 100% increase in the gap.

 

Evolution of Real Values - % of retail value:

This is the nub of the issue – it all comes down to what the consumer pays at the end of the day, and the tax treatment of that price.

 

Pre-Budget December 2012:

• The Excise on Beer accounted for 9.4% of the total price to the consumer
• The Excise on Wine accounted for 21.3% of the total price to the consumer

Post-Budget December 2012:

• The Excise on Beer now accounts for 10.9% of the total price to the consumer
• The Excise on Wine now accounts for 27.8% of the total price to the consumer – a proportionally much greater increase.

 

So the Department of Finance and Minister Noonan may have been comfortable running the risk of European Court of Justice ire in the past – and happily blanking out bits of interesting information from public documents, but the question is have they now distorted the relationship between the excise on Beer and Wine enough to warrant some interest from the ECJ?

A couple of thoughts spring to mind, that might be of interest to the ECJ:

a)      The Government had the opportunity to equalise Excise rates with the North and GAIN €93 million, but it would have involved raising Excise on beer. Instead they chose to favour/protect beer and increase Excise on wine instead.

b)      If wine sales fall due to the Excise increase, and beer remains steady, it would seem to me that it could be shown that the Government imposed an unfair increase on Wine relative to Beer.

One final thought. You might think that the Government are crazy thinking they are going to get that extra €65.8 million from the increase in Wine Excise – after all, all of us middle-class wine drinking yuppies are pretty strapped at the moment.

Well, they know that already. In 2011 they got €230 million in Excise revenue from about 87 million litres of wine sold.

In 2013, to get their €298 million, they only need us to sell 80 million litres of the stuff – that’s a 10% reduction in sales planned for your, mine and everyone’s wines sales this year, courtesy of the Government.

Market distortion? Unfair discrimination?

You decide…