Large scale wineries

Why do our large-scale wineries struggle for credibility?

In the aftermath of the annual auction season – where Nederburg’s results continued to show slippage and the Cape Winemakers Guild maintained its strength (despite the meltdown in the world’s markets) – some questions are inevitably being posed. Is the Nederburg Auction compromised by the image of the Nederburg brand? Is there some tarnish left over from the days when the Nederburg wines were less than cuttingedge?

 

Do South African wine buyers assume that if you are a high-volume producer selling most of your production for R50 per bottle or less, your brand can never have real cachet? By the same token, has the Guild’s exclusivity, as well as the lower-volume image of its members, been the key driver of its success?

At one level, these questions must seem self-evident. Everyone knows that nothing is more likely to make an object desirable than the thought that it might be unobtainable. At the top end of the market, rarity certainly counts. If Nederburg is too widely distributed (physically, and across a range of price points) to bring the appeal of price and rarity, then deluxe purchasers will shop elsewhere.

Issues around the Nederburg brand have undoubtedly driven the elite auction buyers into the arms of the Guild. For them it is largely irrelevant that the overall wine quality at Nederburg rivals the best bottles of some of the Guild’s members. Image, rather than organoleptic pleasure, is what premium wine sales are all about. Alan Pick’s punters feel better spending more – and knowing that what they’ve bought is not readily available.

The problem is not Nederburg’s alone. Spier’s wines sell in the domestic market at a discount to their international price point. Other older and better-established names – Bellingham, Zonnebloem, Fleur du Cap – all face similar difficulties. And while the propensity to discount the credibility of all the wines produced by major wholesalers is not peculiar to South Africa, it does not afflict all brands in all markets. Australia’s Penfolds, for instance, sells Grange for at least 20 times more than its cheapest ranges.

Historically the big names in South Africa were the repositories of the industry’s reputation. The most sought-after wines a few decades ago included Nederburg, Chateau Libertas and Lanzerac. It was the last cases of the ancient stocks of these wines (many still quite remarkable) which produced the auction records at the Nederburg sales of the 1980s. However, the introduction of the Wine of Origin legislation – which has sold the idea of “small is beautiful” – changed all this. Now it seems that all the big players in South Africa have been placed at a disadvantage.

But, in truth, they also conspired in their own downfall. Anyone who has tasted the wines made in the 1960s and compared them with what was on offer from the 1980s will recognise that South Africa’s wholesale merchants milked their brands into oblivion, compromising on quality every inch of the way. Part of their problem was a shortage of suitable fruit to meet the growing demand – and they all chose the low road of quality dilution, hoping that the brand’s momentum would save the day. In addition, they committed a litany of marketing mistakes which compounded the damage done by almost two decades of corner-cutting.

Nederburg is now making some very fine wines and it is just possible that the trend can be reversed – but it will take a concerted and very focused effort. The Auction will also need a new rigour. No sentimental inclusions, no no-namebrands; just small quantities of really good wines from producers whose own image is strong enough not to burden Nederburg’s during its convalescence.

Michael Fridjhon is a leading wine writer and consultant with extensive international judging experience.