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[11/19/2008, 07:22]

The Trudge

La Faticaccia

wine salesNot good news from the front lines of the selling game. From what I am seeing, getting to the end of the year unscathed will be highly uncertain. We?re in the thick of things now, the deep trough, the slog through the sludge. Forget about keeping your mukluks sparkly clean, we?re going into the uncharted terroir of the slime. And it ain?t autochthonous. Or archetypical.

wine salesFunny how wine geeks love to talk about the feel of the soil. But when it gets soggy and tracks through the house, folks be singing another tune. Until the end of the year, the wine business is joining the rest of the economy in just getting through these days.

Small or large, importer or distributor, terroir-driven or industrial-fashioned, wines in these times, and selling them, have some particular challenges. Call it Stock and Awe.

First, the warehouses are full. As, I am sure, are the winery stockrooms. Just like the car lots and portside lots, space is running out. Meanwhile, folks aren?t running out to buy a car or a TV or the same bottle of wine.

In a short survey today, while driving from Dallas to Austin, I talked to importers. Some have a niche market of artisanly crafted wines and others have more commercially made offerings. In either case, marketers are telling me they are worried. Vintages are starting to back up.

wine salesAnother concern is the Europeans. Since they perceive the dollar is stronger, and they are wrestling with inflation and recession, some camps think they will push for price increases to bolster their margins. That would be a huge mistake to entertain such fantasies. Not because they aren?t entitled to recoup margins after holding back their prices while the dollar was in the tank. Unfortunately now there are other things in a tailspin and to have any price points spiral up would be suicide. But I am sure many of those folks won?t be reading this blog. Those who do, would save time and lost sales and just bite the bullet for the next eighteen months.

Forget about the problems about Brunello. It will seem small by comparison to the next wave that is in motion. And a year or two from now let?s see if this seemingly pessimistic assessment will be prophetic or aimed in the wrong direction. I hope it is erroneous. In the interim, it will be crucial that the industry moves forward slowly. Introducing new items? This probably won?t be a good opportunity moment. Beefing up inventory? We?re going to see a new definition of just-in-time. It?ll probably be more like, when we run out, then we?ll order. After we sell some other product sitting, waiting for its day.

What will be telling? When, like the auto industry, folks decide instead of waiting around for a bail-out, they start selling wines, at reduced margins in order to just move product out to make room for the next round of offerings. Both products have a shelf life; cars rust, wines get tired.

wine salesI feel for a friend, who has recently taken the leap to import and self distribute, with containers just showing up. Unknown wines in a time when even things known have slowed down. This is not a good time to be exposed to the elements of the downturn. It?s going to take a lot of street beating, wearing out some of the old shoe leather. Forget about chasing maidens around the primordial ooze.

wine salesSo the fancy Beatle boots of the dandy salesman, like the three martini lunch, is a sullied white elephant in today?s climate.

wine salesMaybe a drill sergeant?s pair of boots would be more suitable for the combat in the streets, Main or Wall. The situation on the ground calls for a little less speculation (and editing of the fantasy-dream sequence) and a little more real time pounding of the concrete. What some of the old bull elephants in the selling game call getting out of the mud bath and trudging into the village. Stay tuned.

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[11/19/2008, 00:02]

Lots of ?Analysis? on how to ?use? social media, is it missing the point?

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Social Media Friends

Social media is creating quite a long tail of industries - lots of software companies, consultants, new modes of public relations, etc, etc.  Some of them focused on getting you into using social media, which is great, and many of them aspiring to help you “use” social media for your business.  The latter point is what I find interesting.

I’ve spoken on the topic of social media before (with assistance from the self-proclaimed “Bonafide Marketing Genius” Marta Kagan - FYI, I’m glad she has the confidence in herself to tag herself that way b/c she’s one of the few I would actually agree with) and I think the biggest point from my talk and others that I’ve seen (like Marta’s deck) is that this all is an excercise in sociology.  There are so many technologies that one could use, so many things that you could do, but in the end what is happening to the web is just another means of connecting, interacting, and getting to know people; not unlike joining a social club (like a sports team, a cultural center, or whatever).  In fact, just as you have “different circles of friends” offline (work friends, drinking buddies, sports friends), you’ll develop the same thing online and your community will drive you to the tools.

That’s where the idea “use social media” sticks in my craw a little bit.

I’ve had this blog since 2004 and I’ve interacted with many many people thanks to it.  It’s mainly an outlet for my thoughts, creativity, and passion (wine, technology, and marketing) and I’ve made a serious number of friends in the wine industry because of it.  My goal was to do exactly that, get to know people in the wine industry.  One of the major things its taught me though is that the only way to truly understand what this “social media” thing is all about is to get out and do it.  BUT - do it with a genuine desire and understand that its a means to reach out to a community (blog in particular).  Its not a sales tool and its not a PR tool for social media any more then going to a conference is a PR tool for you.  What I mean is you can go to a conference, chat with people, network, find people that you can stay connected with.  If you contribute to the conference (effectively contributing to the ‘community’ that the conference is bringing together) then you can get noticed and in that sense you get some good word-of-mouth publicity.

But here is how to think of “use social media” (Ugh!).  Its a sociological, human based filter.  Its not a broadcast engine like the “information super highway” or the “series of tubes”.  Doesn’t matter what tool/site you use, first and foremost your community has to be on that site and/or using that tool.  There is always a “critical mass” that needs to be achieved before the tool gets useful.  Kind of like a party, its not really fun until there are a bunch of people you know there.

Once your community is there, interacting, chatting, whatever then the dynamics of what happens is facinating.  Things start to get “useful” and the human filter is formed.  It becomes a situation where the community is as close as a bunch of office mates even though they are all over the world.  I literally consider the community I interact with on Twitter my “virtual office mates” and I genuinely like interacting with them.  The reason is that you can contribute (chat, answer questions, and otherwise participate) just like you would any other office.  In the case of Twitter, it becomes just like a hallway conversation in an office.  You can ignore it for a while, pop your head in with a little bit of nothing to say, put out some information or useful tool to the community, or you can put out a serious question to the group and get some solid answers.  Pretty much how you would for any office with cubilcles and hallways.

The best part of all this is that when the community reaches critical mass of people in a certain technology/tool who genuinely like to talk about a particular topic, forming an open community, thats when the best things come out.  If you contribute something to that community that is truly useful, it will get passed on to everyone very quickly.  People will decide if what you said is interesting, show their friends and, if its applicable, their friends may pass on the information to their other “open communities”.  The network effect takes over and your information has just become “viral” (i.e. it will spread not only in the current ‘circle of friends’ but to other ‘circles of friends’).  More importantly, the human filter took over and since that useful piece of information you generated is actually VERY useful, it will get passed on for a while (or very funny, or very interesting in some other way - the latest on Twitter was a streaming video of puppies, not useful, just very Zen).

So if you find an open community or want to know where there is critical mass already for a community you want to learn about (for instance - the wine community is embracing Twitter and Social Networks) on one of these tools the best way to “use social media” (I hate the term because it makes me feel like “use your friends”, but I guess there isn’t a better way to say it) is to contribute in significant ways.  Add to the community but more importantly be YOURSELF.  If people like you, they like you.  If they don’t, guess what…they don’t.  There isn’t alot of advice that can be given there that your parents should’ve taught you before Kindergarten.  Thats the funny truth of this “social media” craze.  The fundamental sociological point is that this is making friends.  Because even if you contribute something that spreads from network to network like wildfire, when those people check you out and “follow you” on Twitter, or Facebook, or whatever, then they start to get to know you in a more personal way then anyone over 25 ever thought possible.  If you’re obviously contributing to promote your business it will come across.  If you genuinely approach this medium (regardless of technology) as “getting to know people” in the way you’ve always done then you’ll not only have that “viral hit” you won’t be an online “one hit wonder”, you’ll have friends who can help you when you’re down, connect you to others, help you build business, get emotionally invested in your brand…. i.e. you’ll be a part of a community and how you do that is something your Mom and Dad shoulda taught you.

FYI - if you’re doing it for a business/brand it doesn’t matter - if people don’t like your personality, they won’t like your brand.  These things have a way of piercing the corporate PR veil.  Want an example?  Supposedly Cisco “gets” blogging.  Read their blogs and you tell me what you think….

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[11/14/2008, 07:01]

Casual Fridays Redux: Nomadic Furniture for the Jug Wine Lover

wine salesMy friend Hank Rossi and his wife Phillissa just returned from a two month nomadic trip across Europe, their blog is a hoot, go give it a look-see. To ease them back into the New America, I am offering them post-economic meltdown re-design suggestions for their flat. Unless they got out of the market before they left, they might not be traveling as much. Knowing Hank, they probably have all their money intact, which would be OK with me, seeing as they are great folks. And when they are gone we sneak in their place (the doorman loves Pinot Grigio) and have wild parties in their place. I also drive their Jaguar convertible around town, acting like I'm in a higher income bracket that I really am. All in good fun. So to welcome Hank and Phil back I am bringing back an old post I did a couple of years ago. Since then there are more new furniture projects. Have at it Hank, Rossi wine in jugs is the new paradigm for the economic times; sales of Carlo Rossi are off the charts!

wine salesYears ago I had a sculpture teacher in Silicon Valley whose father-in-law was Carlo Rossi. We used to go up to the prof?s house in San Francisco because his wife cooked for us (and she was real pretty), and we always had an endless supply of wine. It was cool.

Now all those empty jugs of Carlo Rossi wine can have a new life. Artist Jay Blazek of Seattle has created 6 do-it-yourself projects.

Go to CarloRossi.com and see for yourself. Videos outline how to make in a simple and entertaining manner.

wine salesThe Cabernet Couch, just the spot to do some vertical (or horizontal) tastings


[11/12/2008, 22:10]

Is ?light? as a wine term the kiss of death?

wine salesI like light reds. Pinot noir, gamay, barbera all make food-friendly wines that can be light in style as compared to, say, cabernet sauvingnon or zinfandel, which are fuller bodied (and often higher in alcohol).

Talking about the flavor profile of wines, from light to full bodied is, in my view, a really constructive way to talk about wine. Heck, entire stores such as Best Cellars in Manhattan and wine lists at numerous restaurants arrange wines this way.

So I was surprised to hear a boutique wine distributor tell me the other day that “light” is verboten! Here’s what he said:

“Light is bad. It’s the kiss of death for a wine. I instruct my sales staff to never describe a wine is light–it’s not beer after all! Succulent and fruit forward and food-friendly, yes, but light, no.”

It’s probably just a question of semantics since he does have many light-bodied (my term!) wines in his portfolio, which I don’t think even has one Aussie shiraz or Cali cab. But I was struck by his hostility to the term and, needless to say, I don’t think it is the kiss of death; rather, it’s a strong endorsement in my view! What do you think?

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[11/12/2008, 07:50]

The Truth About American Wine Drinking

Looks like a piece of news slipped by me a couple of months ago. Every year I look forward to a report, which more than any other single piece of news, speaks the truth about the state of wine in America. Restaurant Wine magazine commissions and publishes a report every year on the top 100 wines and top 100 wine brands sold in restaurants around the country, from family diners to fine dining restaurants.

Based on the simple measure of how many cases of each wine were sold at these restaurants, we get a picture of the most important person in America when it comes to wine: the average American wine consumer.

And why is this person so important? Because they are the bread and butter of the wine industry. They are the fuel for the wine engine. They are the bottom 95%, so to speak, whose spending habits make (or break) the market and who make up the pool of wine drinkers from which true wine lovers slowly graduate to more expensive wines and esoteric habits like...reading wine blogs.

I like knowing what the rest of America drinks when it comes to wine. Here at Vinography, here in San Francisco, here in my group of friends, I live in a bubble of unreality when it comes to wine. In this bubble, $40 bottles of really good wine are a steal and most everyone I hang out with knows how to pronounce Viognier ("vee-own-yay"). But that doesn't represent wine drinking America any more than San Francisco represents the political tenor of the rest of the country.

This is what wine drinkers in America drink:

1 Kendall-Jackson Vintner's Reserve Chardonnay USA
2 Beringer Vineyards White Zinfandel USA
3 Cavit Pinot Grigio Italy
4 Sutter Home White Zinfandel USA
5 Inglenook Chablis USA
6 Ecco Domani Pinot Grigio Italy
7 Yellow Tail Chardonnay Australia
8 Copperidge Chardonnay USA
9 Yellow Tail Shiraz Australia
10 Franzia Winetaps Vintner Select White Zinfandel USA

Those are the top 10 wines consumed by Americans (by volume) in 2007.

And here are the top 10 wine brands sold in American restaurants in 2007:

1 Beringer Vineyards, Foster's Wine Estates Americas
2 Kendall-Jackson, USA, Kendall-Jackson Wine Estates
3 Franzia Winetaps, USA, The Wine Group
4 Yellow Tail, Australia, W.J. Deutsch & Sons, Ltd.
5 Sutter Home, USA, Trinchero Family Estates
6 Inglenook, USA, The Wine Group
7 Copperidge, USA, E. & J. Gallo Winery
8 Cavit, Italy, Palm Bay Imports
9 Woodbridge, USA, VineOne (Constellation)
10 Foxhorn Vineyards, USA, The Wine Group

For me and for the wine lovers that I hang out with (and no doubt the folks that read this blog) these are somewhat sobering lists, if only because for most of us, these are wines we generally don't, and wouldn't, consume given the choice. The average retail price of these wines is well below $8 per bottle, and the last time I asked you readers what you spend on average per bottle it was somewhere around $20.

And some of you probably didn't think that you were all that sophisticated when it came to wine, did you? Notice how the top 10 wines only includes a single red wine? If you're a Cabernet drinker you're a member of the wine elite. And I'm only partially kidding.

Here are some additional interesting facts about this year's list:

- White Zinfandel sales are down 15%
- Chardonnay was more popular than Pinot Grigio for the first time
- Pinot Noir sales were up (again) by 89%
- Merlot sales were down (again) by 9%
- Sauvignon Blanc and Sangiovese wines appeared for the first time on the top 100 list (bravo!)

So what to make of all this? I take a number of things away from this list every year. The first is appreciation for how lucky I am to be able to drink the quality of wine that I do regularly. The second is humility -- a reminder that while I may not choose to drink them, these wines, the companies that make them, and the people that drink them are what really make the wine world go 'round. And finally, I always finish my perusal of these numbers with hope. The amount of wine America drinks continues to go up, and slowly, but surely, the diversity of that wine continues to expand.

And that means that we're making progress.


Read more details on the annual Restaurant Wine report.

[11/10/2008, 15:13]

Pride of New York Harvest Fest 2008 @ Desmond

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The Pride of New York Harvest Festival at the Desomond Hotel in Albany, New York was a wonderufl success. Many celebs of the New York wine world were seen walking the floor, including Hunt Country's Art Hunt, Fox Run's Scott Osborn, Matt Spacarelli of Benmarl, Chris Reno of Lafayette Reaneau, and many other winery owners and winemakers, as well as scurrying sales staffs.

Its been a good year for many wineries, and this event was a great mixture of New York gourmet foods and New York wine.

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Scott Osborn

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Art Hunt

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Matt Spacarelli

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Chris Reno

Lots of good reviews to follow!
[11/06/2008, 20:39]

Global Economic Crisis and Spanish Wine, Portugal Pay Attention

wine salesI received today a press release that I want to discuss with the caveat that you please provide feedback and thoughts in the comments.

FEV, The Spanish Wine Federation, is a private group dedicated to tracking, promoting and defending the image of Spanish wine both nationally and abroad. In Spanish, they emailed me a decent newsletter full of information on Spanish wine sales and conferences which they host to discuss issues relevant to the industry.

In today’s press release from the FEV:

“Márgenes y Estrategias en la Industria del Vino” - Las empresas del vino analizan en Madrid los efectos de la crisis en el sector

“Margins and Strategies in the Wine Industry” - Wine Businesses analyze in Madrid, the effects of the economic Crisis on the Wine Industry

The “crisis”, as it is called in Spain, refers to the downturn in world markets that we are all surely aware of. However, it is far beyond a crisis here in Spain, and getting worse. High unemployment, expensive housing and immigration issues are all starting to take a toll on the Spanish economy. So far, we have not seen this become a huge issue within the wine industry, but it will eventually, so any preemptive talk is welcome in my opinion.

To the release: It states that 150 businesses in the wine sector helped support a study at the international level, focused on both the competitiveness of the Spanish wine sector and the current key markets for wine sales. They first took a look at a new report presented by Rabobank on the need for wineries to balance profitability and investment to ensure a healthy future. I believe you can find information on the report here, though there is no link to which report mentioned.

Through this analysis, they came up a with several factors which they felt were fundamental to the future success of European wineries, but more importantly, zeroed in on the Spanish market and singled out the following:

  • that Spain has huge stocks of wine - Ever been to a Rioja or Cava house?
  • a long return time on investments (one of the highest in the study)  - Can you say Gran Reserva aging in my cellar?
  • and a large investment in fixed assests - Maybe they mean stupidly big hotels?

The report then went on to say that Spain, above all else, needs to focus on brand building, while at the same time, maintaining sales growth. And as a result of a lack effort during boom times to both build strong brands and consolidating overall brands, wineries are now left in the position of having to do it now, during a “crisis”.

Finally they looked at both the North American and UK markets as potential areas to exploit. With respect to North America, they pointed out the need for distribution, selling wines at a good price and a nice range of products, which are all good points. But with respect to the UK, they were focused on restaurants and the food sector as a whole; which could be considered strategic, with the art of cooking currently enjoying a renaissance and restaurants continually improving their offerings. The Gastro pub could mean big bucks for the industry!

Finishing the newsletter, I was left with 2 images of the event and a conclusion that went something like this:

In conclusion, the Spanish wine sector is facing a national and world crisis; which although is complicated, offers great potential to compete for those who are willing to grow with the creation of strong brands and the increase of distribution capabilities.

Ta-da!! Anyone see anything missing? A conference on how to survive the economic slowdown and that brand builiding is ever so important, seems to be missing one very importent word? Anyone see it?

Yes, the word is the Internet. According to the Internet World Stats webpage:

As of June 30, 2008, 1.463 billion people use the Internet

Now if that number is even off by a billion here or there, it’s definitely a number that should not be ignored. But the report, from what I can see in this release, fails to mention it even once.

The US alone shows internet usage at: 248,241,969 individuals which is over 73% of the total North American user base. Seems like a great place to start if you:

  1. want to do some brand building
  2. don’t have a lot of money to invest

But you could make the argument that those billions of people are only young kids playing World of Warcraft and wasting time, thus not of interest to a Spanish winery. Well, that is until you see this: Direct to consumer wine sales topped 2.8 billion last year in the USA, with the internet seeing a 3% growth. The website, Digital Lifestyles quotes:

Investment firm Cowen & Co. put the total sales figure for 2006 slightly higher at 108 billion dollars, predicting that it will hit 225 billion by 2011.

Now granted, this is a figure for all internet sales, but what it shows me is that people are shopping online. And if your shopping online, you most likely are doing a few other things while your at it like researching information and communicating with friends and family; which are all things that could lead to people finding your brand.

Why would you NOT be online?

When you look at Europe the users are still impressive albeit not at large. 384,633,765 users were online last year in Europe, which equalled approximately 43% of the population. For the purposes of their focus on the UK market, you’ll see that it’s almost at 70% of the population plugged in. You can even dig a little deeper into this graph and find that there are some countries in Europe with as high as 90+% usage! WOW!

Seems like the Internet may be a good strategy for a winery looking to weather the economic crisis. Low start up costs, elbow grease investment, and great brand building all seem to be pluses as to why this might be a topic that should be looked at. But knowing Spain, they’ll wait till it’s too late and then point out the obivious benefits if you had done it. They’ll hold up the two or three wineries who did do it and hail them as pioneering examples, and then explain why their plan worked. Or not.

Portugal, you could do it. You could trumph your bigger neighbor, and actually begin the conversation on the web. Talk about Portuguese wine, and spread the news fast. But then again, you wouldn’t want to get your neighbor mad. Better to continue ignoring the web, avoid causing waves, and continue to leave the consumer high and dry when it comes to good information.

What do you think?

Ryan Opaz

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[11/06/2008, 17:10]

This fall, some of the best wine values might be at auction

wine sales“I guarantee you all these prices will be significantly higher this time next year,” John Kapon, president and auctioneer at Acker, Merrall is reported to have said between bids at an auction last December. The buyers who paid $8,000 for six bottles of the ?61 Dom Perignon and $22,000 of for eight bottles of the ?66 Cristal might be wondering if that was a money-back guarantee.

Prices of all kinds of assets have declined precipitously since last December. Wine appeared somewhat immune as recently as September but evidence is now emerging that prices for collectible wines are entering a correction after many years of strong growth. The Liv-ex 100 Fine Wine Index fell 12.4 percent in October.

A close observer of auctions told me yesterday that two recent sales only sold 35 and 43 percent of lots. And some lots are going for well below the low price estimate. At another auction, someone else told me that a case of 1998 Grand Cru Chablis sold for $60. Even though there’s a risk of premature oxidation with that wine, $5 a bottle certainly seems like it’s worth a flier. Such a low selling price indicates that there was no reserve.

While many shops may have locked in higher costs, making them unwilling or unable to discount, some specialty shops do broker private collections too and can have faster turnarounds than auction houses. Provenance is always an issue with mature wine, so feel free to ask where the wines came from.

But some sellers at auction may be eager to liquidate making the secondary market may be the best place for wine deals this fall. Of course, if the global economic malaise continues into next year or beyond, declines in fine wine prices could continue. So you may not want to step in and catch too many falling magnums.

Some upcoming auctions: Zachys, Nov 6-8; Acker, Merrall Nov 7; Christie’s Nov 17 and 21; Sotheby’s Nov 22; Hart Davis Hart Dec 5.

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[10/28/2008, 13:54]

Tuesday Briefs

wine salesYes, I?m still here! Posting has taken a back seat to life and real deadlines lately (hi, Jim! hi, Eric!), but the resumption of a more regular pattern is on the horizon.

In the meantime, nibble on these tidbits:

The Center for Food Integrity reports that 60 percent of consumers are more concerned about food prices than they were a year ago. And the sales growth of private-label organically-produced foods is slowing, according to a recent study by the Nielsen Co.

Sales of craft beers continues to romp along at a double-digit pace, but a shortage of hops is almost certain to start pushing prices up. On the other hand, MillerCoors LLC has pulled the plug on Zima. In the unlikely event that you?re a fan of that particular beverage, existing stocks should be on shelves through December.

According to a recent story in Advertising Age (registration required), advances in product packaging technology have made it possible to offer animated product labels. Before too long, motion-activated store displays and even individual products may be audibly clamoring for your attention.

A panel of tasters assembled by the Dallas Morning News has sampled Wal-Mart?s $3 wines and pronounced them palatable. The non-vintage Chardonnay, Cabernet Sauvignon, Pinot Grigio and Merlot are made by The Wine Group, which also produces wines under the Franzia, Concannon, Glen Ellen, Mogen David and Corbett Canyon labels, among others. Wal-Mart?s wine is sold under the Oak Leaf label ? not nearly as imaginative as some of the tongue-in-cheek suggested names.
[10/28/2008, 13:30]

Wine Book Club #5: Wine Politics

wine salesBy the end of Tyler Colman's excellent book, Wine Politics: How Governments, Environmentalists, Mobsters, and Critics Influence the Wines We Drink, I could only come to one conclusion: it's a miracle that we are able to find anything at all that is decent to drink.

Welcome to the 5th Edition of the Wine Book Club, the online book club for wine lovers who also like to read. I'm the host for this month's event, and for my theme I was inspired by the season. What better way to celebrate September and October than to read a book written by a genuine PhD (September is back to school month) about wine and politics (we are in the midst of an election)? This idea was even more appealing given that the author may be better known to those of you who read wine blogs as Dr. Vino, the award-winning wine blogger.

Colman's book compares the way that politics has shaped wine culture in France and America. One of the most striking things about the story he tells here is that, along with politics, there are two other "P"s that have played an equally active a role in determining what you drink: phylloxera, the louse that destroyed grape vines all over the world in the 1870s; and Robert Parker, the critic who began telling us what we should drink in the 1970s. Phylloxera, it turns out, led to such a collapse in the worldwide wine business that it opened the door to greater governmental control and intervention as people sought to limit fraud, graft, corruption, and lost income. And Parker helped people to wade through seas of indifferent wine with misleading labels at a time when Americans were still drinking like it was Prohibition and they'd rather mainline the hard stuff than drink a glass of wine with dinner. The ripples he sent out from his one-man business in Monkton, Maryland in the 1970s now threaten to engulf us in wave after wave of homogeneous wine made to please Parker's influential palate.

wine salesI consider myself reasonably knowledgeable about wine history, but I was surprised again and again by the nuggets of historical lore and sharp analysis that Colman includes here. Lately, I've been