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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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.”

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…

April Bin End Sale

Ok - it's Spring Sale time!

A bit later than in previous years.... but an early Easter and a very busy period on the road with restaurant and hotel customers has kept us very busy. We have also been off tasting with Producers and finding some exciting new stuff that will appear in the coming weeks. But in the meantime we need to say goodbye to a few old friends.

To me, a Sale should be an opportunity to try and few excellent things at a knockdown price. Maybe some wines that, for whatever reason, didn't get the attention they deserved at the time. Maybe there are some bottles we squirreled away thinking we'd get around to drinking them ourselves, and we never did. Maybe there are some that just need a little nudge and a few words of encouragement to get you to try them. But there are no duds - no wines that we wouldn't happily drink ourselves. We could have done an across-the-board discount on everything, but we prefer to offer a bigger discount on those wines that we think should be enjoyed.

What did surprise me when I went to compile the List is that we still had the odd bottle from last year's Sale! Why? These wines are good!

So what's worthy of particular attention - you can download the List here: April 2013 Bin End Sale

Bordeaux:
There are so many options for Bind Ends with Bordeaux. Cases open here and there as we are often asked to supply individual bottles.But you'll notice that we have stuck to outstanding vintages from highly regarded producers. With the exception of the VCC 2000, all are approachable now and are priced to be consumed and enjoyed.

Burgundy:
Again, a toss-up between finding some big guns and some everyday drinking bargains. The Guillot-Broux Macon Cruzille at just €12.00 is a lovely crunchy Gamay from the Macon - perfect for a medium-bodied red on a warm day. There's some Mugneret Bourgogne at a knock-down price, and even a 2005 vintage 1er Cru from Jadot in there at €35.

Rhone Valley:
Last time we had a good few Rhônes, many of which have now gone, but we found a few bottles of the Bressy Gourt de Mautens in the cellar - well worth a try.

Loire Valley:
These surprised me - we still have some Baudry Chinons from the Sale last year. What do we need to do to convince people about the merits of mature Cabernet Franc from one of France's leading producers? Maybe line it up against a Bordeaux at 10 times the price and see which comes out favourite?

Italy:
Italy is all about diversity, and no matter what we put into the Sale, there will always be something else that someone wanted us to include! North to South, there should hopefully be something of interest to you.

Australia:
Again, slimmed down a bit, but if you want one of the most ethereal wines in the world, the Hill of Grace 1990 is your bottle. One of my epiphany wines.

Austria:
Roland Velich of Moric (stunning Blaufrankisch) also makes a bit of white - well, probably one of the best Gruner Veltliners around (many compare it to a rich Chablis Grand Cru), but as we have discovered to our frustration, not many are willing to pay €49 for a Gruner Veltliner. Ok, we should have seen that coming, but maybe at €25 the temptation will be more difficult to resist.

Germany:
We love Germany at the moment. So much so that we have all sorts of different cuvees from different producers in the warehouse. Classic kids in a sweet shop stuff. But we have to focus... and consequently there are some great bargains, but limited volumes. The Becker Pinot is the bigger brother/sister of the award-winning regular cuvee and the two Kunstler dry Rieslings really are stunning - and even more so at the Sale price.

New Zealand:
I have a bit of a problem with NZ Sauvignon Blanc at the moment. A lot of it has gone all tropical and sweet. That's why I was really surprised the Greenhough didn't sell better - it's a classic dry, citrus Sauvignon - much closer to a lovely Loire Sauvignon with ripe acidity. Thirst-quenching would be an appropriate descriptor. At €12 it's one to buy in volume and stash away for a BBQ or picnic, or tomorrow night....!

There are very few terms and conditions, but we'd better get them out of the way anyway:
- Everything is offered subject to availability. When it's gone, it's gone.
- All prices include Vat
- The Sales ends on Friday 19th April
- Orders over €200 will be delivered anywhere in Ireland for free. Under that value, delivery is €10.50 per case of 12 bottles
- If you can reply with your requests by email if possible it would be great.

That's it - Happy Hunting.

Smash and Grab......

That yesterday’s increase in Excise Duty on wine is catastrophic for the Irish wine trade in Ireland is without doubt. Never has it been so clear that wine importers and independent wine retailers in Ireland need a lobby group.

An increase of just 10 cents on a pint of beer (anyone else find it weird that the Government still operates on Imperial measures for beer?) and nothing on spirits is a credit to the lobbying power of the VFI - and presumably both NOFFLA and DIGI (whoever they claim to represent?)

An almost 50% increase in Excise Duty on wine to a staggering €2.78 a bottle (and double for bubbly) says it all. A lonely letter published in the Irish Times on Tuesday (My Letter to the Irish Times) isn’t going to change much….

Who was that again who represents the interests of the Wine Trade here? Oh yeah, no-one. It was obviously just too easy a target for the Government.

It’s an absolute certainty that jobs will be lost in importers, independent retailers and also in hotels and restaurants as all these groups struggle with falling sales and reduced margins as we desperately try to remain competitive (no chance) against the lure of the North and the larger supermarkets who can afford to continue to discount whilst taking profits in other areas of their retail offering. There are a couple of brave people talking about no price rises, but bravery should be confused with stupidity and there’s a fine line between the two. Sales will fall and prices will inevitably go up.

And why did they not ban below-cost selling of all alcohol? That would have protected jobs. Because the Government makes the same amount of Excise Duty per bottle of wine irrespective of what price it is sold at. The Excise is levied as the wine leaves the warehouse, long before it hits the shop floor. So in a bizarre way, the Government benefits from the below cost selling of alcohol as they actually get more revenue from increased promotional sales. Just don’t tell that to the Health service or anyone who is a victim of alcohol abuse.

But there may be a bigger conspiracy…. admittedly far fetched, but bear with me…Excise is levied as the wine leaves the warehouse, or more correctly as it’s taken off the computer system in the warehouse and it can then technically be put into a “Duty Paid” area. It is not levied on the sale of a bottle in a shop. At the end of each month, the Revenue take by direct debit the Excise bill an importer/wholesaler has run up. This is guaranteed money to the Revenue as we all also have to have Bank Guarantees in place to ensure Revenue get paid irrespective of what happens.

Last night, prior to the midnight deadline, there were tens of millions of Euro worth of Excise charges (not wine, just Excise) incurred as importers shifted wine out of "Under Bond" status to avail of the old Excise Rate before it rose. (As an aside, it will be interesting to see what happens this – some importers may hold their prices at the old rates, or some may charge the new rates whilst having benefitted by being charged the old rates by Revenue – it’s a tempting option as every 100 cases sold nets them an extra €1,000.)

But that’s just a diversion, albeit an interesting one. The real story is that up to €50M in Excise is guaranteed to flow to the Revenue at the end of January (when the December bills are paid) from importers who did this. On top of this is Vat @ 23% on the value of the wine taken out of Bond. That also goes to Revenue at the end of January.

So there’s a pretty nice pot of maybe up to €100M coming the way of the Revenue within 60 days. In the meantime, the Government could get – and wholly deservedly so – an unprecedented attack on the unjust, unfair and discriminatory rise and realise the error of its ways – as jobs really are at stake.

The Finance Bill (which in effect “legalises” many of the Budget decisions) is published every February and in this they could then decide to reverse the misguided Excise increase. Then we’re all back to normal – but the Government has just pocketed a quick €100M by pulling a stroke on us all.

Smash and Grab……? Stranger things have happened….