SA's best white wines climb in price

As SA’s best white wines climb in price, producers need to be careful about their justifications.

Hard on the heels of Steenberg’s Magna Carta – unashamedly launched as the country’s most expensive white wine – comes news that Eben Sadie has a special white wine cuvée destined to sell for double the price. Sadie’s Mrs Kirsten’s Old Vines 2006 – made from a few hectares of ancient Chenin vines in Jonkershoek – is priced at R824.05 per bottle, with only 800 available for sale.

 

Clearly there is a change in the perceived value of quality white wines. This has little to do with consumers acknowledging that it costs much the same to produce a premium white as it does a red wine: at the top end of the market, there is no relationship between selling price and production cost. The precept “whatever the market will bear” has long been a guiding principle of wine marketers everywhere in the world.

Nevertheless there are corollaries to this pricing formula. The first is that the more the market is accustomed to over-paying for a wine, the easier it is to bump up the price. (Caveat emptores Sadiei.) Once Château Pétrus finally established itself as “worth more” than the Médoc First Growths, it swiftly doubled and then trebled that price. The second is that the less wine you have available for sale, the cheekier you can make your price. It should come as no surprise to discover that the annual production of Pétrus is roughly one tenth of Lafite’s.

The third is that these elevated price points are only properly established once several vintages have been sold and the price has been sustained at auction.

Sadie has long made a living by putting a super-premium price tag to his wellhoned passion-and-craft patter. He saw the gap the moment industry commentators lamented how far below the country’s reds our top whites were priced – especially considering the widely held view that, on average, they were the better wines.

R824.05 per bottle is a price which is so far off the wall that a slack-jawed gape must seem the only sane response. If Sadie had not tried to explain it, I could have dismissed it as marketing hype and left it at that. However, in Gulp! – the WINE magazine webletter of 29 August, Sadie denies that this is about money. Working with the old vines, we are told, is a “labour of love” – and Gulp! writer Christian Eedes seems willing to believe him.

If one of the country’s smartest and most insightful wine hacks has fallen for this pricing justification, he hasn’t been supping with a long enough spoon. He quotes the price of farming the old Chenin as R35 000 to R45 000 per ton. Since you only need about one ton of grapes to make 800 bottles, let’s allow this as an input cost, and add another R15 000 paid to Mrs Kirsten for the fruit. There is no new wood component, so all I can think of – other than packaging – is the cost of a refrigerated truck to get the grapes to his cellar. Even at R70 000 all in, the cost of producing each bottle is less than R100.
Christian Moueix doesn’t pretend Pétrus is a labour of love. Eric de Rothschild doesn’t cultivate the rustic look or suggest that every bottle of Lafite is all the altruism of a summer trapped in a bottle. Implying an input cost rationale for his pricing strategy reveals that Sadie cannot justify it. The trouble is – given the image of craft and passion which he cultivates – the takeit- or-leave-it of Lafite also won’t work. Perhaps now that he’s proved that his is really bigger than Steenberg’s, the wine buyers can decide if size really counts.

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