The price is right?

Group-think may be keep­ing Cal­i­for­nia’s prices too high

San Francisco Chronicle Late Edition - - WINE - By Jon Bonné Jon Bonné is a con­tribut­ing writer. E-mail: food@sfchron­i­cle.com.

If I’ve learned one les­son from rec­om­mend­ing thou­sands of bot­tles to read­ers, it’s this: Prices al­ways make some­one un­happy. If I com­plained about, oh, Sonoma Pinot Noirs sur­pass­ing $50 a bot­tle, I’d hear from wine­mak­ers in­sist­ing that was ac­tu­ally too cheap (pro tip: Never make this ar­gu­ment to a wine critic) but also from read­ers who thought $35 was too much. Let’s not even touch the read­ers whose price cap was $10.

Cal­i­for­nia wine has a par­tic­u­lar abil­ity to push but­tons when it comes to prices. Wine­mak­ers here seem to be caught in a group-think when it comes to cost. If all your neigh­bors charge $50, why shouldn’t you?

This is not a new prob­lem. Start­ing in the early 1990s, many wine prices dou­bled and even tripled within the decade. I re­mem­ber buy­ing a $30 Gr­gich Hills Chardon­nay in 1999 and be­ing frus­trated; the qual­ity was fine, but not the price-qual­ity ra­tio. It cost es­sen­tially dou­ble what I would pay for good Ch­ablis. And Gr­gich was price-sta­ble by ’90s stan­dards; be­tween 1992 and 1997, Cay­mus’ Yel­low La­bel leaped from $25 to $70.

Even to­day, value re­mains a scarce com­mod­ity. And that’s cause to worry, be­cause price is the one thing that could undo Cal­i­for­nia’s cur­rent burst of pop­u­lar­ity.

Just five years ago, vint­ners com­plained about the scarcity of home­grown wines on lists in San Fran­cisco. To­day, the sit­u­a­tion is im­proved.

You can see that at 1760 in Polk Gulch, a res­tau­rant very much de­voted to the state’s wines. Yet of wines cost­ing $15 or more per glass (ex­clud­ing Cham­pagne), 4 out of 6 are from Cal­i­for­nia; of wines be­low $15, the ra­tio sinks to 1 out of 8. I al­ways like 1760’s se­lec­tions, and the prices aren’t un­rea­son­able. But on price alone, I’d be hard pressed to choose Cal­i­for­nia over some­thing else.

There’s an ar­gu­ment that’s, ba­si­cally, so what? Cal­i­for­ni­ans will pay more for their own wines. Even if that were so, what hap­pens as you move far­ther from the state bor­der? Ask pro­fes­sional wine buy­ers out­side the state what their main holdup with Cal­i­for­nia is, and taste is not the is­sue. To­day, price is the stick­ing point.

It’s not that Cal­i­for­nia doesn’t make cheaper wines. It’s that they’re al­most en­tirely fod­der for su­per­mar­kets. Bou­tique buy­ers to­day aren’t about to stock Lib­erty School or Geyser Peak for their lists or shelves — or even would-be pre­mium la­bels like Meomi or Kendall-Jack­son. It’s not 1992 any­more; shop­pers know what big­box looks like. And it’s hard to find wines that at least nod at ar­ti­san­ship for less than $20. Over the years, I’ve heard two main jus­ti­fi­ca­tions for the price gap.

The first is that Cal­i­for­nia’s qual­ity is sim­ply higher, that prices merely re­flect what’s in the bot­tle. I’m think­ing in par­tic­u­lar of one Rutherford pro­pri­etor who made an im­pas­sioned (if lu­di­crous) case that his $220 Caber­net was a down­right bar­gain com­pared to Bordeaux. True, maybe, if your shop­ping list starts and fin­ishes with fu­tures of Lafite-Roth­schild — cur­rently about $440. Even then, it’s a Marie An­toinette sort of com­par­i­son, be­cause Bordeaux is cur­rently stran­gling it­self: over­pric­ing its top wines while thou­sands of less fa­mous prop­er­ties lan­guish.

That value no­tion be­comes even harder to jus­tify as you move down the price chain.

The sec­ond ar­gu­ment? It sim­ply costs more to make wine in Cal­i­for­nia, hence the higher prices.

This feels more gen­uine.Yes, mak­ing wine in Cal­i­for­nia can be ex­pen­sive. Vine­yard land is un­rea­son­ably spendy, like any prop­erty in the state. And, yes, most Euro­pean vine­yards have been planted for decades, with less-fre­quent re­plant­ings. But Cal­i­for­nia grape prices have reached nearly crazy lev­els — sur­pass­ing $30,000 per ton at the very top end. Which is why, when ev­ery­one bris­tled last year as grower Andy Beck­stof­fer set ag­gres­sive new prices on his To Kalon fruit, I couldn’t feign sur­prise. It was sim­ply a re­ac­tion to the no-lim­its phi­los­o­phy of wine prices.

Cal­i­for­nia’s la­bor costs are of­ten higher, too. (Although don’t un­der­es­ti­mate the bu­reau­cratic hell of Euro­pean Union em­ploy­ment laws.)

Still, when I hear es­ti­mates from some wine­mak­ers about the break-even prices per bot­tle — $125 from one top Napa Caber­net pro­ducer — my pa­tience wears thin. In the end, con­sumers don’t care.

That said, please don’t go away think­ing Cal­i­for­nia winer­ies are out to skim us. Too many vint­ners still scram­ble to make ends meet, es­pe­cially young ones, as­sem­bling their wine dreams on the scraps of each pay­check. Start­ing a wine la­bel is hard and ex­pen­sive; the smaller the harder, be­cause no economies of scale ex­ist for the end­less mun­dane de­tails —com­pli­ance pa­per­work, la­bel de­sign — re­quired of an 800-case win­ery.

And there’s ac­tu­ally one sil­ver lin­ing in to­day’s prices. Twenty years ago, many top Cal­i­for­nia wines played a dan­ger­ous game with the sup­ply-de­mand curve. Vint­ners en­gi­neered a sense of scarcity into their al­lo­ca­tions and mail­ing lists; hence all those spi­ral­ing prices. While some of to­day’s most col­lectible new Cal­i­for­nia wines — Arnot-Roberts and Wind Gap, to name two — deal with sim­i­larly small quan­ti­ties and sim­i­lar de­mand, they cost a frac­tion of what top wines cost in the past. At the mo­ment, at least, Cal­i­for­nia has bar­gains to of­fer for your cel­lar.

I’d like to in­ter­pret that as a sign that, in a mod­est way, Cal­i­for­nia is learn­ing to suc­cess­fully wran­gle the neu­roses of its pres­tige.

But in the end, to stay com­pet­i­tive, the we’re-worth-more ar­gu­ment has to die. We need to look on shelves and see more ta­ble wines, made by tal­ented wine­mak­ers, that we all can buy and drink on an ev­ery­day ba­sis — made with the dig­nity and care that the state’s in­dus­trial wine lake never of­fers. We need more worth­while glasses of wine in restau­rants for less than $15.

Be­cause, again, Cal­i­for­nia has cleared its big­gest hur­dle: Peo­ple once again love its wines. Wouldn’t it be a shame if that progress was halted be­cause the peo­ple ready to be charmed de­cided it just wasn’t worth the money?

Price is the one thing that could undo Cal­i­for­nia’s cur­rent burst of pop­u­lar­ity.

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