Sunday, May 25, 2014

Boutique vineyards excluded from Air New Zealand in-flight and airport lounge wine selections

Air New Zealand (R)
In a letter dated 20 May 2015, Air New Zealand announced sweeping changes to their wine selection process. Historically the airline has invited all New Zealand vineyards to submit wines for selection and this has given the airline's passengers wonderful exposure to the diverse and exciting range of wines produced in New Zealand. It is important to recognise the current wine selection process is complex to administer, but one would have thought the benefits to the airline outweighed that consideration, particularly as Air New Zealand is seen as our national carrier. The following quote from the above letter is indicative now of the airline's current thinking: 

".... from the beginning of 2015, the airline will move to serving wines through longer term partnerships with a limited number of New Zealand wineries. In line with this a Request for Proposal (“RFP”) was recently issued to a small number of potential suppliers. This RFP covers the wine we would pour during domestic Koru Hour flights, in our long haul Economy and Premium Economy cabins and in our airport lounges."

While the notice did point out business class wines will be selected from a wider range of options, no longer is that class open to all wineries either. I think a reasonable interpretation of this is 'potential suppliers' are probably the larger commercial producers and many, if not most, of the smaller, boutique producers will be left out in the cold. That is such a shame, particularly as, just a few days prior, Air New Zealand  released a press statement advising that they had just signed a Memorandum of Understanding (MoU) with New Zealand Winegrowers aimed at promoting inbound wine tourism to New Zealand. Very confusing signals, as these tourists will want diversity in their wine choices, not something purchased via an "RFP".

An important question now is why those rejected would want to participate in the annual Air New Zealand wine awards? It would not be surprising if many elect to boycott them.

It is also likely to have other consequences for the airline. For example, as a company working on the very thing the MoU was set up to address, in our case significant inbound tourism from China, we will certainly not be inclined to use Air New Zealand as our preferred carrier as we grow the business.

Am I disappointed by the lack of consultation and the clumsy way in which this change was announced? You bet!! But, it is important to conclude by saying no-one expects a guarantee to be listed for aircraft service by right, however all kiwi wineries would like to think if their wines are great examples of New Zealand wine, they have an opportunity to at least be considered for service by their national carrier. 

Wednesday, June 26, 2013

No need to take your wine on holiday now!

Victoria Wines In the past if you went on holiday to Fiji, you had to take your Murdoch James Estate wines with you. I remember a holiday in Rakiraki where I took 2 cases to see me through (don't ask how long 2 cases lasted me and my mate Mike!). And a lot of excess baggage and customs duty paid too.

Liam Hindle
Well no more. Yesterday we agreed with Victoria Wines that they would import and distribute Murdoch James Estate wines in Fiji. They have 3 terrific retail shops with a very knowledgeable team. They also distribute to the wholesale trade as well, so we hope to see some Murdoch James wines on the wine lists of some of Fiji's great resorts.Click here for a link to their website.
Like Murdoch James Estate, Victoria Wines is also a family company that values great quality and enjoys sharing that with their customers. The company name comes from the location of their very first shop 20 years ago on Victoria Parade, in Fiji’s capital city – Suva. They currently have two shops in the West, in Nadi and Denarau, and one shop in Suva, with a second soon to open at the new Damodar complex adjacent to the University of the South Pacific. With a dedicated team of twenty-five people they will ensure you receive all the assistance you require to select the perfect bottle of wine with which to watch the sun set on their beautiful island home. As Liam, one the founders of Victoria Wines says "We love it, we drink it, we sell it. Enjoy!"

Friday, January 25, 2013

Sheep versus Machines - Who Wins?

In past vintages we have always used machines or people to do our leaf plucking. The plucking is intended to remove leaf material from around the bunches so that sunlight can penetrate through to the berries. It also helps air circulate and so reduce the risk of fungal disease. A good leaf-pluck is a major contributor to growing quality grapes for our wine-making team to work with.

This year we did a trial block using sheep. Were they better than machines? Well have a look at the two images and see if you can pick the work the sheep did!

Yes, the one on the right - a terrific job, a much more complete and thorough pluck, with huge savings in time, manpower and expenses. On top of that, they fertilise as they go! And we can reduce use of tractors with very positive environmental benefits. We are so happy we are going to set up as much of the rest of our vineyard as we can to use sheep more widely for future vintages. The secret is a big mob, in a small space (around 3-5 ha), pluck that block, then move to the next one. One thing that surprised us was that the sheep showed a preference for certain vines over other - maybe they are secret grape connoisseurs.

We have always been concerned that the sheep would eat or damage the grapes, hence this year's small trial. We did not need to worry - they ate all the leaves, and did not touch the grapes. We are converts!

For those following the progress of my selected Pinot Gris vine through the 2013 vintage, it is the top left photograph - sadly it did not get the sheep treatment - that will now be next year.

Monday, December 10, 2012

Pinot Gris at Murdoch James

Same Pinot Gris Vine after just 20 days!
Just to show how fast they grow, here is a picture of the same vine that was in my post of 20 November; just a touch over 2 weeks ago. Check out just how much more dense the canopy has become in just a that time. And for the sceptics who note the trunk curve is different, that's because I took this snap from the other side of the plant. Flowering looks fantastic too, so we have the promise an excellent vintage for 2013.

Pinot Gris Flowering December 2012

Monday, November 26, 2012

2013 Vintage Looking Good

Pinot Gris, 26 Nov. 2012.
I went out today to take the attached photos of Pinot Gris and could not help feeling we may be in for one of the really good vintages in 2013.

I know it is not a good thing to celebrate too early but the current vintage is looking great for us at Blue Rock. Our elevated and sloping vineyards meant no frost damage at all, compared to horror stories from  Central Otago where Spring frosts did huge damage in some regions. There were also reports of frost damage in parts of the Hawkes Bay and the Wairarapa.

We are looking at a harvest with the promise of both quality and quantity. There is a good bunch count per cane so what we need now is a good flowering through end November and the crop should be an excellent one. In fact, if the flowering is too good, we may be faced with having to fruit thin so we don't over-crop the vines.That is not a bad problem to have!

I did smile to myself when I took the photos as I was thinking I have been very lax in keeping my blog up to date. At one stage I had thought it would be interesting to take a single vine and post a picture of it each week through the season, but travel and other commitments got in the way. It was so lovely out there today that I am motivated to pick the idea up and follow it through from now on; let's see how I go!

Pinot Gris before flowering
I felt it would be good for those interested to see just how quickly vines grow through the season  and how much they change over time. For those not familiar with grapes, what you see here are very much potential grapes; these wee guys still have to flower and be pollinated before they develop into full sized berries. So, what we need over the next few weeks are warm days and gentle breezes for that to happen successfully. Rain and/or strong winds are not what we want - that just washes or blows the pollen away. I'll post photos of the same bunch over time so you can follow the development of the grapes.

Tuesday, September 11, 2012

Tough Vintage for 2012

I am currently travelling in Queensland, Australia, working with our major client's key stores; Vintage Cellars and First Choice. These are both top wine chains in the Australian market, with knowlegeable staff. The stores stock a great range of wines too. If you live in Australia, check them out sometime. Make sure you buy a bottle of Murdoch James Estate wine while you are there though!

Yesterday I was in a store in Brisbane and one of the team said " I would love to work on a vineyard and make wine, it must be great fun?".

I was prompted to say "Yes it is" but had to qualify the comment to "Yes it is, most of the time". The qualifier was because this year we had a very small vintage, due to cold, windy weather at flowering time, with the result that we had a much smaller fruit set than normal with some varieties. While our white harvest was top quality and good quantity, for some red varieties we had such small harvests that we will not be able to produce a wine from this vintage. An example is our 2012 Syrah. Such a small crop means it is not able to be bottled as a stand-alone wine. Does not sound so bad until you realise the implications; if there is no 2012 Blue Rock Syrah available, customers who enjoyed the 2011 and older vintages may change to something else before we release the 2013. Then we have to work with our retailers to rebuild the brand, and that equals time and money.

In other cases, like the Pinot Noir, the fruit was terrific quality, but the crop was down 40% per hectare. So we will make excellent wines from the Pinot Noir this year, but not a lot of it. We will just have sufficient wine to supply demand, so again sounds OK, until you dig deeper....

The cost per litre of wine is much higher in a small vintage than it is in a normal one. Think about it this way: we spend many hundreds of thousands of dollars each year in the vineyard to grow our grapes. And we have to spend that regardless of harvest size. We need to prune, mow, tuck, hand pick, trellis, etc with a full crop in mind. Now, if we are targeting (say) 200 tonnes of pinot a year, and we only get 100 tonnes, we have still spent the money - it is a sunk cost regardless of what size crop we get. So in this scenario (2012) effectively our cost of production had doubled. If the normal cost of wine per bottle was $10, now it is $20. Can we increase our wine $10 per bottle to recover that? Sadly, the answer is "no way". In the current tight market, no retailer, importer or distributor is going to allow wineries to increase prices $10 a bottle, just because of a small vintage.

So, what happens is that wineries have to absorb the extra costs and hope to recover it from other vintages; again easier said than done. This is more so with smaller boutique wineries where they have no way to shed expenses. The big industrial producers who harvest with machines, buy grapes in, and have other scale benefits are less at risk. So think about that when you pick a wine up in a wineshop; in tough times, the small producers need coonsumer understanding of their need to recover costs. Maybe spend a few bucks extra and don't buy the big brand label that is on 'special'? Ask a store team member to recommend something a just little more expensive and enjoy it in the knowledge the extra $5 or $6 dollars is going to help a small, passionate producer somewhere. It will probably be a better wine too!

Hence my qualified answer.

Yes, vineyards are a great way to make a living, but make no mistake; they are not an easy way to make a living. Rest assured, boutique winemakers don't do it just for the money!

Friday, June 29, 2012

View from the 101st Floor!

I received a lot of e-mails about my last post, mainly around how high is 101 stories in a skyscraper? Well it is approx 1/2 a kilometer tall (500meters). And what does that feel like? Well the best way to visualise what that means is to look at the view from a window......

And to make the foodies among readers envious, have a good look at the following menu. The food was superb and we shared these magnificent dishes and fantastic Murdoch James wines with a full house. The service was superb also, making this a very successful evening. Recommend the restaurant and the experience to anyone visit Hong Kong and looking for a wonderful place to dine.

Some more facts on the building itself. It is actually 118 stories tall, a five star hotel occupies floors 102 to 118. The world's highest swimming pool and bar (OZONE) can be found on the top 118th floor. The express elevators take you from ground level to floor 101 in less than 50 seconds - that's fast! Try not to think about the big hole under the lift floor though!

Thursday, June 28, 2012

Not all beer & skittles

One of the great pleasures of making and selling wine is meeting your importers and agents all around the world.

This week I am in Hong Kong promoting our wines with our importers there (Nathan Fine Wines). Not the best time of the year to be here; hot, humid, crowds...

But, it's not all bad. Tonight I am hosting a Winemakers Dinner featuring Murdoch James Estate wines at Sky Crystal Restaurant at the top of the ICC Tower in Kowloon. This is the highest restaurant in Hong Kong on the 101st floor of the tower (to confirm, that is the 101st floor). A 7 course menu matching our wines with a great selection of Shanghai style dishes. I'm told it is a total sell-out, so that is great. The tall building in the centre of the image on the right is the ICC Tower. It will be privilege to present our wines there and to experience a very special location in which to do it. Only problem is, I'm a wee bit frightened of heights - but, as they say, no such thing a free lunch (or in this case dinner)!

Friday, June 1, 2012

Excise: And you thought I was exaggerating

Last week I posted a blog on my favourite hate: Excise. You may have thought I was overstating the cost to the industry?

Well consider this: Over $2.00/bottle of wine sold in New Zealand goes to the government. This equates to over $170 million a year paid by the New Zealand wine industry to the government (note that is just Excise tax, remember that the industry also pays GST and Income taxes too).

In Marlborough alone excise payments total around $127 million pa. Converted to income to the government per tonne of grapes, that is approximately $2,000/tonne of grapes.

Now compare that to the average of what Marlborough grape growers receive for a tonne of grapes which is only $1,400.

How crazy is that!?

(Source: NZ Winegrower Magazine, June/July 2012)

Monday, May 28, 2012

Project Update

Well, vintage 2012 is over. A smaller harvest than anticipated, but nice quality fruit to work with. We are pleased to have made some very good wines, and having the nice new winery to work in really made it all go very smoothly. It was a little stressful leading up to vintage, with the builders still working on site just a few days before picking commenced! But in the end it all worked out fine.

The new fermenters shown in the accompanying images worked perfectly and the new sorting table will have helped us take a big step up in quality. The new space has also helped give us the ability to try things we have only dreamed of in the past; for example barrel fermenting some of the varieties.

All in all you can look forward to some very interesting wines from our 2012 efforts.

But, even writing about these exciting developments, brings me back to one of my pet hates - Excise Duty. We have just been advised there will be a further increase in Excise Tax on 1st July.

With what we have just spent in capital improvements, new tanks and new barrels, on top of a small harvest, we really should be thinking about price increase to compensate, however in the current wine market that is just not possible. And the increase in Excise Duty will further erode margins.

Remember this is one of those hidden taxes all governments love. Like Excise Duty on fuel it just keeps money flowing into government revenue in a manner not visible to the general public. And it is linked to the consumer price index, so it increases nicely each year too, another plus for the tax collector. The Excise on wine is now over $2 per bottle and the winery must pay this each time they make a sale. Do the math; if you buy a $10 bottle of wine, over 20% is Excise, add that to the 15% G.S.T. and government is doing very nicely thank you!

So my question is such a tax needed on wine? The answer is no.

Why? Several reasons:
1. It does not make sense to penalise a successful and growing export industry by increasing the cost of doing business in the NZ home market. Almost every successful business starts from a solid platform at home and then pushes out to exports. All that such a tax does is advantage cheap imported wines; be they bulk wines from Australia, or wines from countries with lower production costs or subsidies (like Argentina and Chile), thus impacting the viability of New Zealand wineries.
2. It is a tax burden that unfairly selects just one industry and adds enormously to their operating costs, while other industry sectors avoid it. Plus, the cost of tracking and reporting the excise duty is another burden in an already over-regulated industry
3. It is an indirect tax that could have been phased out and replaced at the introduction of GST, as many other indirect taxes were (e.g. sales taxes). As a consequence it now means consumers end up paying double taxes on all alcoholic beverages, regardless of type, which is clearly unfair
4. Apologists for excise taxes say they are only levied on supposed harmful products (e.g. fuel, tobacco, alcohol, etc) but in fact it is certainly not clear to me that all the excise collected by government is returned the community via initiatives related to the taxed product.
5. On top of that, excise is also a crude tool that does not differentiate between the wide range of alcoholic beverages on the market. It is certainly not the drink of choice for the binge generation; look at alcopops and spirits if you want to address that concern.  I accept a new approach is needed to manage alcohol abuse, but why penalise the vast majority of wine-lovers who enjoy and respect wine, by treating them like the problem society really needs to be focused on?

What has been done about the excise tax problem? Well the New Zealand Winegrowers organisation (a body that represents all NZ vineyards), has tried worked hard for change to the excise regime for many years, but to no avail. I know it must be hard negotiating with government officials who fail to see the big picture, but we must persevere.

That's because the consequence of excise continuing to increase each year, will result in more small vineyards in New Zealand failing. To me, continuing a tax that disadvantages Kiwi wineries in so many ways is foolish. It is not being overly pessimistic to point out that unless something changes small family-owned boutique NZ wineries with slim margins are not going to survive. That will not only be to their cost, but also will lead to diminished consumer choice and reduced employment opportunities.