The True Cost of Cheap Wine: An Update

Back in April I wrote a piece titled The True Cost of Cheap Wine in which I set out to advance the narrative that cheap, industrially made wine has cost consequences beyond the obvious. It was easily the most read piece in these humble pages, inspiring both praise and criticism alike. While it is the avowed purpose of this blog to focus on the issues relevant to the Swiss wine industry, I do reserve the right to comment on other issues that are of importance to the wine world at large.

Since that post first appeared some new information has come to my attention that addresses issues raised by commentators to the original blog post. I thought it might be interesting to add this information to the discussion.

In his comments, David Graves, a winemaker and vineyard owner I admire and respect, took me to task for my assertions regarding nitrogen pollution from synthetic fertilizers and water use. He made the following observations:

“1) Nitrogen pollution–grapevines are very small users of nitrogen, and nitrogen more than a very small amount per acre is actually detrimental to grape quality, no matter what the price point. San Joaquin Valley aquifers have problems with nitrogen pollution, but not from grapevines. The same applies to the Salinas Valley.

2) Your accusation that wineries are big users of water (and by implication, that they waste it) is false. Water used in a winery in the course of making a vintage is a) ever smaller as technology improves and b) increasingly recycled for irrigation.

3) Regarding monoculture—use Google Earth to have a look at Languedoc-Roussilon or at Bordeaux.”

Without getting too far afield, several things occur to me as far as nitrogen use goes: red and white grapes have different nitrogen needs. Red cultivars need lower levels while white cultivars need more, meaning moderate amounts. Whatever a vineyard’s needs, nitrogen uptake is a complicated process that is influenced by a number of interrelated factors: among them, soil moisture and temperature, soil pH, and timing within the vine’s annual cycle, from bud break to harvest.

While it is true that vineyards have lower nitrogen needs than other crops it is unlikely that nitrogen applications can be completely abandoned especially in places like the Central Valley of California. Nitrogen loss from intensively farmed vineyards, those without mitigating cover crops like most large ones in the CV, is one of the leading causes of nitrous oxide (NO2) release and is a major component of greenhouse gas emissions. Such losses to the atmosphere, plus the amount of nitrogen actually used by the vines—remember, less for red and more for white—necessitates fertilizer additions at some point, if not at several points, during any growing season.

Further, misapplied fertilizer is a leading cause of excessive nitrogen in the soil which can lead to some devastating consequences—poisoned drinking water in the Central Valley, for instance.

This from Mark Greenspan, North Coast viticulturist and nitrogen management expert:

“Leaching losses (of nitrogen) can be considerable in intensively farmed areas such as the Central Valley. When nitrate moves past the root zone into the vadose zone (between the roots and the groundwater), it cannot be taken up by plants and eventually reaches the groundwater. Groundwater nitrate levels have reached unacceptably high levels in many parts of the Central Valley and now may not be used for drinking water. The California State Water Resources Control Board noted that in 2010, 8 percent of drinking water wells exceeded the maximum contaminant level for nitrate. That’s an important issue in the Central Valley, and proper nitrogen management is of extreme importance there. For those of us who farm relatively small vineyards in the coastal regions, the issue is of lesser importance, though I frequently see over-use of nitrogen fertilizers and imagine that much of that nitrogen applied never reaches the vine. In the wet North Coast, much probably reaches streams while in the arid regions of the Central Coast, the nitrate probably remains in the vadose zone for a long period of time, never leaching nor being taken up by vines or other vegetation. Whatever region one farms in, overuse of nitrogen fertilizers is unsustainable, not to mention financially inefficient.”

 

Slow and Steady Nitrogen Management in the Vineyard
A frequently mis-applied nutrient, proper usage requires restraint and commitment. 
by Mark Greenspan  May 2014 Issue of Wine Business Monthly

 

 

Mark Greenspan is a Certified Crop Advisor and has completed the Nitrogen Management Training Program through the California Department of Food and Agriculture and the Fertilizer Research and Education Program.

I’ll double down on what I said in the earlier post: not only are irrigated vineyards a waste of water resources, careless fertilizer use is a real source of damage to the Central Valley aquifer. Mr. Greenspan makes the further point that misapplied fertilizer is common even in areas of the North Coast with potential consequences to the streams and ponds that transport its run-off.

David’s next assertion that the practice of re-cycling winery water mitigates its use elsewhere is incomplete and misleading.

Irrigation is not simply about the use of scarce water resources but also about the damage to the soil and aquifer resulting from salt accumulation, particularly in the Central Valley. Imported water brings with it salts that may be in higher concentrations than local sources. What is critically important is that these salts remain in the soil in areas with insufficient drainage. The Central Valley of California is such an area and the salt crisis there has reached a critical stage.

Ironically, the recycling of waste water, while superficially a good thing, is also a method of concentrating these salts even further. This is not such a problem in Napa, Sonoma or other counties where there is a natural run-off to the sea but the Central Valley is not so lucky. Salt accumulation there is rendering productive farmland useless. Are these farming entities paying their fair share for the damage done? What about the costs for repair and the untold costs for salt capture and drainage? I reiterate, it’s unlikely there is much left over from a cheap bottle of wine to pay these costs.

Incidentally, it’s speculated that the abundance of the ancient Euphrates and Tigris River valleys was forever lost due to salt accumulation in the soil caused by irrigation. Millenniums later the soils there continue to be useless for agricultural purposes. A desert from an oasis of plenty—A lesson to be learned.

His third point that monoculture is not a uniquely Californian issue was echoed by others. There is no argument from me on that one. It’s indisputable. I believe all forms of monoculture, wherever they occur, need to be addressed.

Felicity Carter, an editor of Meininger’s Wine Business International, and Robert Joseph, a leading voice in the business of wine, also weighed in with several different takes. First Felicity:

” . . . it’s very easy to make $2 bottles of wine without trickery or exploitation – producers just have to buy bulk wine on the spot market and then blend it to taste or need. As of February 2017, it was possible to buy quite decent quality wine from Chile for $0.68/L, and Tempranillo from Spain for $0.68/L. In Europe, the grapes for these types of wines are often produced by small family concerns and then sent to regional cooperatives for vinification. Notably, a lot of bulk wine comes from warmer, inland regions, where there is little disease pressure and so less to no need for pesticides and herbicides. And then there are bulk producers in countries like Austria, where wine production is very clean and green. These are the sorts of wines that end up on supermarket shelves around the world, often packaged as home brands.

So commercial production is not necessarily less environmentally sustainable than other sectors of the market, and in some cases it’s better e.g. than some premium regions of France, where pesticide use is the norm.

In the case of the big companies, it’s sadly often the case that the big producers are the ones with the money and time to spend on extensive environmental and sustainability programs.

Commercial wines are typically transported globally in flexitanks, which is less harmful to the environment that premium wines being shipped in heavy bottles, or very super premium wines which in some countries may spend years in temperature and humidity controlled environments (lots of use of electricity).

The point of all of this is that the production of cheap, commodity wines is a lot more complicated than it looks at first. And also, once the discussion turns to monoculture, treatment of farm workers etc, then the prestige players aren’t always better, and in some cases are worse.

As for commodity wine being dumbed down, though, the quality of wine has never been higher, historically speaking. Today’s cheap, fruity wine is a better deal than the cheap wines of 20 or 30 years ago, where plenty of unripe or even rotten grapes ended up in the bottle.”

There are a couple of significant issues presented: first, the claim of increased quality of commodity wine and the improved sustainability of its transport around the world; second, that large global concerns use their vast financial resources for good.

As to the first, it’s probably not worth arguing about the quality of bulk wine made in low-cost countries because it can be satisfactory for the intended market. But there are some relevant issues surrounding its transport abroad.

A new study reported in jancisrobinson.com tells of transportation issues relating to cheap wine. The study conducted by a team at the Weincampus Neustadt in Germany tracks several shipments of bulk wine in various containers at different times of year. The focus of the study was to determine what effects, if any, fluctuations in temperature have upon wine in transit. An incredible 38% of global wine production is transported in bulk containers to be blended, bottled, and distributed at its destination. A good portion of that 38% is transported in the very flexitanks Felicity and Robert mention.

Anyone with any experience in the wine trade is painfully aware of the potential for heat damaged wine caused by unrefrigerated transport. Kermit Lynch, a large importer of French and Italian wine into the U.S., has long demanded refrigeration for all of his containers.

As is widely known, heat damage can occur at temperatures in the mid-to-high 70ºF (24ºC) range and become significant, if not catastrophic, beyond 90ºF (32ºC). Ideally, the study points out, temperatures should not exceed 73ºF (23ºC) to guarantee original quality. This study recorded temperatures ranging between 7ºF (13ºC) to 90ºF (32ºC), with some wild fluctuations within this range, all on the same voyage. Not good.

What’s worse, objective tastings against original samples at the point of arrival confirmed that catastrophic damage occurred in those wines subjected to extreme and/or fluctuating temperatures. This kind of wine is frequently sold to unsuspecting consumers victimized by this pennies for profit game. What about our role as wine professionals? Are we to avoid being our snobby selves and let the consumer fend for himself? It seems, the only way to transport cheap wine profitably is to do it cheaply. Integrity be damned.

If this sort of information becomes common knowledge, and our reporting should make it so, then what are the industrial makers of wine to do? It continues to be my position that cheap wine serves no one, least of all the consumer.

Felicity continues:

“This question of unfair competition by cheaper production is a difficult one. It’s shocking to see Spanish wines in French supermarkets, often badged as if they were French. You have to look closely to see where the wine comes from. But the Spanish can produce more cheaply, because their wine economy has more big players than France’s does, and that changes the economies of scale. (Also, the French have more paperwork to deal with.) Then again, those small French winemakers get more EU subsidies than the Spanish companies do. So, swings and roundabouts.”

The last statement is simply incorrect. While France receives more EU subsidies than Spain, via the Basic Payment Scheme, the French government reserves all of it for food production and does not reimburse the wine sector. It is the Spanish government with approval from the EU that distributes grant money directly to the wine sector. In addition, these subsidies can be bought and sold and can be accumulated by large cooperatives which further brings down the cost of production.

It’s my contention that the subsidized industry of one nation should not be allowed access to a nation that withholds the same subsidy from its own. Particularly a neighbor with different social values and means. France’s social unrest at the Spanish border is an example of such inequity. Just ask CRAV. Yes, cheap wine has social consequences well beyond its point of origin.

Finally, Robert Joseph rightly chastised me for taking the easy click-bait route by invoking and dismissing Bianca Bosker and her controversial position vis-a vis industrial wine, so I amended the offending portions and I prefer the results. Thanks Robert.

He continues later:

“But even if Gallo and Kendall Jackson et al all signed up for verifiably sustainable agricultural and packaging and shipping programmes and voluntarily listed every ingredient that went into their bottles, I’ll bet that you would still dislike them and their wines on purely philosophical grounds. You don’t like corporations and you don’t think big wine companies make the kind of wine you like and want other people to like. Just be honest enough to admit this and move on.”

Not true at all. I actually admire big companies who try to do the right thing; those who raise the stakes in a given industry. I just don’t see a lot of it in the industrial wine arena, but, if you know of any, please let me know.

On the contrary, what I currently see is rampant consolidation in the wine industry, with both brands and vineyards traded like board game pieces. This does not bode well for the kind of sustainability we all hope for. In fact, I believe we lose ground with each of these transactions. It’s virtually axiomatic that the more stretched and far-flung an enterprise becomes the less accountability attaches to it. At least in the short term, or until a piece or pieces are divested in the name of focusing and restructuring the portfolio.

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