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The straw that breaks the camel’s back…
2 Comments“La gota que desborda el vaso” means the drop which makes the glass overflow. A play on this idiom is the headline for the story in the local La Voz newspaper today, and it translates roughly as the straw that breaks the camel’s back.
I sincerely hope the back of the sherry trade is not broken, but there is some pretty serious stuff going on here at the moment.Everyone is being drawn in: The growers, the bodegas and the Consejo – even the regional and national governments. I suspect some of the issues have been brewing for several years but attempts last year to hammer out a general agreement for the sector, plus the general world crisis, have opened a Pandora’s Box and it seems the current “system” is beginning to unravel. This could not have come at a worse time for the trade and for Jerez and I think we are in for some pretty dramatic changes.
To simplify things, and paraphrasing the article linked to above, I will list, in no particular order, the issues causing problems. Some of these issues overlap and are interrelated, but here they are:
1. Sales Quotas – bodegas have long been limited to what they can sell each year. In 2006 the formula for calculating the quota was changed, apparently disadvantaging the smaller bodegas – effectively forming a cartel amongst the larger ones. The Spanish Competition Commission has found that a “very serious infringement” of competition law occurred and fines will almost certainly be imposed. The Consejo itself has been implicated. This does not look good from any angle.
2. Jerez Superior – grapes grown in the “Superior” part of the DO command higher prices than those grown in the rest of the DO, but wine produced from both often ends up in the same bottle. The growers are not happy about this.
3. Non-DO inputs – Most Pedro Ximenez Sherry is not grown in the Jerez DO but comes from elsewhere, also a significant quantity of the “liquid” in Sherry bottles can come from grapes not grown in the Jerez DO, ie. colour wine, rectified concentrated grape must and grape alcohol. The growers in the Jerez DO want to know why they should be ripping up vines when their grapes could be used to produce 100% of the liquid. On the other hand setting up production facilities for colour wine, RCGM etc does not happen overnight. This does mean the whole DO idea is a bit of a farce – especially when so much money and effort is spent promoting the DO and protecting its good name. More about this issue in a Diario de Jerez report today.
4. Grape prices – the price offered for grapes from the 2008 harvest is 24 cents/kg, down from 37cents in 2007. Growers say this is below cost, so refuse to sell – I got that wrong in a previous post, the last harvest has not been sold yet. I guess there must be lots of “mosto” sitting around in tanks somewhere. It’s only fair a grower should know what he is going to get before he spends money contracting people to pick his grapes…
5. Consejo funding – the bodegas cough up funding for the Consejo based on the number of bottles they sell, so I guess the large bodegas have a disproportionate influence, and the smaller bodegas feel trampled on. The Consejo really should be independent but it’s hard to think of another funding model which is fair to the bodegas, so this is a tricky one, but not helping given the other issues. The Consejo is also responsible for promotion, but Fedejerez, the bodegas’ federation, seems to do that too via the “Sherry Councils, Institutes and Committees” in the States, UK and Japan. I’m not sure how the line is drawn but I would have thought promotion should be something for Fedejerez alone and the Consejo stick to the technical and quality issues?
6. Fino in Sanlucar – the Sanlucar bodegas want to be able to produce Fino as well as Manzanilla. There’s a small war on about that.
7. Price Fixing – the Spanish competition commission in July last year opened an investigation into alleged malpractice and price-fixing at certain bodegas. This is a bit of a worry.
As the Sage of Omaha says: When the tide goes out, you can see who’s been swimming naked…Published on 26 January 2009 · Filed under: Uncategorized;
2 Responses to “The straw that breaks the camel’s back…”
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Álvaro Girón said on 29 Jan 2009 at 17:13
Lo escribiré en castellano para ser lo más preciso posible:
1.- Cualquiera que tenga edad y cierto conocimiento sobre el terreno se dará cuenta de que no hay nada nuevo bajo el sol. Los conflictos entre viñistas, pequeños bodegueros y exportadores son tan antiguos como el jerez. Algunos hemos vivido en vivo y en directo historias muy parecidas.
2.- No es exacto, como dices en este mismo blog, que son excepción las bodegas que tienen o controlan viña por sí mismas. González Byass llegó a poseer el 10% por ciento del viñedo en la zona de Jerez Superior. Domecq posee un porcentaje no pequeño del pago de Macharnudo. Barbadillo tiene una viña inmensa en Gibalbín. Sandeman tiene viña. Williams tiene viña. Hidalgo-La Gitana tiene viña. Osborne tiene viña. Garvey tiene viña…Que yo sepa, sólo bodegas pequeñas -el Maestro Sierra, Álvaro Domecq, Gutiérrez Colosía, Rey Fernando de Castilla- no tienen viñedo. Incluso bodegas de dimensiones modestas como Sánchez Ayala tiene bastante más de 100has detrás.
Lo que sucede en realidad es que dada la fenomenal crisis de sobreproducción que padece el Marco, los grandes exportadores no necesitan comprar a terceros -normalmente pequeños viñistas y cooperativas- Y, en consecuencia, los precios se desploman.
Sobre este punto añadir que hay una gran concentración de tierra en manos de los grandes exportadores en el municipio de Jerez (12 hectáreas la superficie de la propiedad media), mientras que en Sanlúcar y Trebujena predominia el minifundio (la propiedad media no llega a la hectárea en la primera). El conflicto tiene una componente regional importante.
3.- Tomar como cierto que la CNC actua a instancias de “pequeñas bodegas” no es del todo plausible. Garvey -o lo que es lo mismo, Nueva Rumasa- no es una pequeña bodega en absoluto. CAYDSA es una importantísima cooperativa que tiene sólidos lazos con Nueva Rumasa. Las pequeñas bodegas que yo conozco no están interesadas en inundar el mercado de marcas blancas.
4.- La acusación de la CNC a bodegas y Consejo Regulador de que se están fijando precios es francamente surrealista. A las bodegas ya sólo les falta regalar el vino, porque en los supermercados alemanes te encuentras sherry por debajo del euro botella. Yo, como consumidor y aficionado al jerez, más bien me quejaría de la incapacidad del sector de defender un precio sostenible para el negocio en su conjunto. Preferíria que mi copa de manzanilla fuera más cara si eso significa que los jereces siguen siendo una industria sostenible. Lo de la CNC es como intentar meter en la carcel a un señor que está intentando reanimar a un moribundo porque no ha seguido determinados protocolos médicos. Lamentable.
5.- Los precios de la uva están por los suelos por una razón sencillicísima: porque el precio del vino está por debajo del coste de su producción. La mayoría de las bodegas están más cerca de la bancarrota que de otra cosa.
6.- Pretender que producir alcohol vínico y mosto rectificado en la propia D.O. va a solucionar algo a medio-largo plazo es francamente ilusorio. Por otro lado, y desde el punto de vista de la calidad, no veo que haga ninguna diferencia que el alcohol vínico se destile en la Tierra de Barros que en Jerez. Creer que el negocio debe ser emplear nuestras fantásticas viñas de albariza para hacer alcohol vínico es francamente deprimente, cuando no contraproducente. Y yo me pregunto, francamente, si un producto que lleva mosto rectificado y vino de color debiera ser amparado por la D.O.
Hace muucho tiempo que la PX pasó a ser insignificante en el Marco. Primero porque la demanda de finos se convirtió en mucho más importante que la de vinos dulces. Y segundo porque había dificultades muy importantes tanto en el proceso de maduración de la uva en la viña como en su pasificación en las paseras. Si se pretende volver a plantar PX y hacer paseras, se tardará un buen número de años para que esas nuevas viñas entren en producción. Y habrá que ver con qué resultados. Mi apuesta es que con un vino en nada superior a lo que hoy se importa de Montilla-Moriles. Personalmente, me parecería más interesante explotar mejor las posibilidades que ofrecen los moscateles chipioneros, o las propias posibilidades que ofrece la palomino en vendimia tardía.
En todo caso, la solución pasa -necesariamente- por otros precios. Pero eso pasa por hacer y vender otras calidades de vinos. Y eso, claro está, debiera llevar a otros rendimientos en la viña compatibles con la calidad, no las barbaridades que se llevan hoy en día. Pero de eso nadie quiere hablar. En todo caso, los volúmenes que actualmente se mueven de vino de calidades inferiores es francamente insostenible.
7.- El tema manzanilla/fino es serio, porque lo que está en juego es una importantísima parte de la cuota de mercado de los jereces en el mercado nacional.
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Justin Roberts said on 8 Apr 2009 at 16:55
Below is my attempt at a translation/interpretation of Alvaro’s comment above.
I write in Spanish to be as accurate as possible:
1. Anyone who is old enough and has some knowledge of the subject will know that there is nothing new under the sun. Conflicts between growers, small winemakers and exporters are as old as sherry itself. Many of us have lived through similar situations before.
2. It is not accurate – as you say in this blog – that wineries who own or control vineyards themselves are the exception. Gonzalez Byass have come to own 10% of the Jerez Superior area. Domecq owns a not insignificant portion of the Macharnudo pago. Barbadillo has a huge vineyard at Gibalbín. Sandeman has vines. Williams has vines. Hidalgo-La Gitana has vines. Osborne has vines. Garvey has vines… To my knowledge, only small wineries – El Maestro Sierra, Alvaro Domecq, Colosía Gutiérrez, Rey Fernando de Castilla – have no vines. Even relatively small wineries, like Sanchez Ayala, have significantly more than 100ha of vines.
What is really happening is because of the phenomenal overproduction crisis the region is currently suffering the large exporters have not bought from third parties – normally smaller growers and co-operatives – and consequently prices have collapsed.
I should add that in the Jerez municipality there is a large concentration of land in the hands of big exporters (12ha average size), while in Sanlúcar and Trebujena smallholdings (half hectare average size) predominate. This conflict has an important regional component.
3. To accept as true that the Competition Commission acts at the behest of small wineries is not entirely plausible. Garvey – or whatever they are called now – Nueva-Rumasa – is not a small winery at all. CAYDSA is an important cooperative with strong ties to Nueva Rumasa. The small wineries that I know are not interested in flooding the market with buyers-own-brand wines.
4. Frankly, the price-fixing allegations made against the large bodegas by the Competition Commission are surreal. The only option currently left to the large bodegas is to give their wine away – in German supermarkets you can find bottles of Sherry on sale for less than a Euro. As a consumer and lover of Sherry, I have more of a complaint with the trade for being incapable of defending a sustainable price for the sector as a whole. I would rather my glass of Manzanilla was more expensive if it meant that Sherry remained a sustainable industry. It’s like the Competition Commission are trying to jail a doctor for not reviving an already dead man because he did not follow the correct medical protocols! This is regrettable.
5. Grape prices have collapsed simply because wine is being sold for less than the cost of production. Most wineries are closer to bankruptcy than anything else.
6. To think that producing grape alcohol and rectified concentrated grape must from grapes produced in the DO is going to solve anything in the medium to long term is frankly unrealistic. Furthermore, from the standpoint of quality, I do not see what difference it makes if the alcohol is distilled in the Tierra de Barros instead of Jerez. To believe that the business should be using our fantastic albariza vineyards to produce grape alcohol is depressing, if not counter-productive. I do wonder, frankly, if a product containing rectified concentrated grape must or colour wine should be covered by the DO.
It’s been along time since the production of PX became insignificant in the DO. Firstly, because the demand for Finos became much more important than for sweet wines and secondly, because in the DO there are major difficulties to ripen PX on the vine and to raisinate the grapes. If you want replant PX in the DO and set up raisin production it will take a number of years before these new vineyards come into production and we’ll have to do with what results. My bet is that it will be no better than the wine which is currently imported from Montilla-Moriles. For me it would be more interesting to exploit the possibilities offered by Moscatels from Chipiona or late-harvested Palomino.
In any case, the solution is – necessarily – different prices. Which will come from making and selling different quality wines. And that, of course, should lead to different yields compatible with quality, not the atrocities being carried out in the vineyards today. However nobody wants to talk about these things. In any case, the volumes currently being shipped of lower grade wine are, frankly, unsustainable.
7.The Manzanilla/Fino issue is serious because at stake is a very important part of the domestic market share.
