i am curious to get thoughts from the VC members on this subject....

judging from a couple of the mailers i have received in the last week, i suppose there is an emerging trend toward pricing napa merlot at $90/bottle - first it was blankiet, and now i received my pahlmeyer mailer offering the '02 merlot at that price.

i am a huge merlot fan and drink as much of it as i do cabernet sauvignon, but i don't think there should be a such a big disparity b/w the pricing of merlot and cabernet. don't get me wrong - i am not suggesting that $90 merlot is a great bargain. rather, i am suprised at the degree to which the dynamic of napa cult cabs (SE, harlan/bond, colgin, abreu, araujo, dalla valle) pricing their wines >$200/bottle, combined with the new entrants (amuse bouche, blankiet, hundred acre, sloan, etc) pricing their wines at the same levels, is seeminglybecoming justification for merlot prices to move where cabernet prices were a mere 5 years ago.

so there are 2 real issues in question: first, is the rising price of CA cults creating a rising tide for all CA wines that is justifiable and sustainable? second, is the disparity b/w the pricing of napa valley cabernet sauvignon and merlot justifiable, especially in the context of how left bank vs right bank bordeaux pricing doesn't necessarily reflect the same trend?

food for thought - what do others think? this is a topic i definitely contemplate as one of the new entrant vintners in napa valley who is meniacally focused on being able to justify our price points on BOTH an absolute as well as relative basis.

wendell

P.S. i guess the positive aspect of all of this is that it makes me feel good about ordering my entire allocation of my favorite napa bordeaux varietals (B&H, drinkward peschon, foley, herb lamb, hourglass, karl lawrence, merus, paloma, etc), CA pinots (aubert - when they arrive, littorai, marcassin), and CA syrahs (alban, copain, pax, etc) in almost every vintage (sine qua non as well). not to mention how my budget is being re-allocated to include the newcomers that i most admire (favia, rivers-marie, relic, etc).

I would prefer all wine to be cheap.

Notwithstanding that, I do not think CA Merlot lives up to its Cab counterpart so it is very difficult for me to answer the question based upon your palate, which believes it does. To me, the greates CA Merlot made is Pride Mountaintop Merlot -- a great wine, but not really comperable to the greatest vintages of Shafer HSS, Araujo, Maya, Harlan, etc. (Obviously, I've not tried Amuse Bouche, although I hope to at some point in the next couple of years.)

So, to answer your questions...

I think we've already seen the bubble burst on Cab. Harlan is half the value it used to be on the open market. Same with Bryant, Maya, etc. It is only a matter of time before Screagle goes down, too. But, I think it is clear that that cult Pinots do not fetch high auction prices (excpet for from three -- and only three -- wineries). Regarding Merlot, I think it is treated by the market mroe like Cab, if you look at how it responds to ratings. (Consider the $45 Paloma Merlot having a fair market value of $200!) There will always be an aftermarket for highly allocated wines, but I don't think Merlot is significantly behind the pack -- probably in front of Pinot, although it does not deserve to be -- but the days of buying '94 Bryant for $60 and selling it for $800 are over, and that includes for Merlot.

And, just to be clear, Pomerol and St. Emilion probably make the best merlot in the world. It is debatable if Napa or the Left bank makes the best Cab in the world, but, to me, Napa Cab is much better, on average, than Napa Merlot, whereas the same cannot be said in Bordeaux.

a

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first, is the rising price of CA cults creating a rising tide for all CA wines that is justifiable and sustainable?

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No.

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second, is the disparity b/w the pricing of napa valley cabernet sauvignon and merlot justifiable, especially in the context of how left bank vs right bank bordeaux pricing doesn't necessarily reflect the same trend?

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Yes.

WIML:

Try to be a bit more concise. Y and N will do.


DBW

When I read about $90 US Merlots (and in addition $100-150 CA cabs) I think "more for everyone else". There are so many more wines out there that will deliver more for the $$. Just say no.

here is my take and california wine lovers are not going to like it. it's sort of like the " jack of all trades, master of none " mentallity. chateau petrus makes only one wine. chateau ausone makes only one wine. chateau latour makes only one wine. chateau margaux only makes one wine. chateau leoville las cases only makes one wine. chateau pavie only makers one wine. forget about their seconds. those are only younger vines and declassified juice.

what do the above all have in common? they concentrate on making one legendary wine every year. when the weather cooperates, they do. they don't separate their juice and make different wines. they make one wine and don't care how many cases are produced. in difficult vintages, they declassify up to 60% of the juice. if bordeaux had weather conditrions like napa, it would be mind boggling. i cannot wait for the 2003 bordeaux vintage to come out. there will be a bunch of california wine lovers converted over to bordeaux.

what does this have to do with the threads question? california wineries like variety and like low production. this helps keep prices up. if you only produce 300- 500 cases, you at least have one thing in common with cult wines, low production. at least you can say there are only x amount of cases available and have pricing comensurate with supply. quite frankly, i could care less if there are only x cases of xyz merlot availble for $100. give me the 1998 chateau pavie instead. or how about the 1995 angelus. or almost any vintage of peby faugeres.

how much longer are people going to chase these crazy prices? one thing i will tell you. the next time the dollar gains strength and bordeaux gets cheaper, watch out. done with rant.

There are some very nice CA merlots, but can't think of any that justify that kind of money...

I agree, Kpak.
IMHO Pride and Paloma probably make the best Cali Merlot, and as long as they are available for $ 50.00 or so, I can't see paying almost double.
If I were to pay $ 100.00 or so, I'd go for a Merlot based Bordeaux.

I am resolving to not pay that much for ANY wine


unless of course I really, really, really want it.

FYI, at the $55-60 I was able to accumulate them for, the '01 and '02 Switchback Merlots are killer. Wouldn't pay $90-100 for either one, but at $60 they are really excellent wine.

jeff,

i couldn't agree more. you opened my eyes a long time ago.

Here is my take and francophiles are not going to like it.

OJeffso, you are missing a critical fact in your analysis. France has an astounding excess of wine.They are in trouble. The fact is, France has an overabundance of vineyards.

Contrast that to California. If you want to plant a new vineyard in Napa, you are out of luck. There are so many eco-terrorism laws to overcome, there is zero chance to plant a new vineyard.

People seem to think that California Cults produce such a small amount because they like to. The fact is, any one of the cults could increase output double and not impact the pricing. Harlan could triple or quadruple production, and they would still have people clamoring for more. Would they make more money at the higher production? You bet. Would they have to lower their price? Doubtful. Perhaps in a weak vintage like 2000, but certainly not on strong vintages.

California wineries produce variety because theyCAN In france, there are numerous regulations regarding which wine they can produce. In California, producing more than one varietal allows alleviation of risk. In 2000, Chardonnay did just fine - thus wineries benefited from "spreading the risk".

Oh, and I find this statement interesting:

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chateau pavie only makers one wine

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. Hmm, thats interesting. What about Pavie-decesse? Pavie-macquin? And since a number of chateaus hire the services of Michel Rolland and other consultants, how does that affect your statement?

Unfortunately, I do not think the dollar will ever gain serious strength vis a vis the euro, so I don't see the situation changing any.

In terms of the original question, $90 merlot is simply a market reality. Just as the price of Cabernet was (and still is) questioned, Merlot will rise as long as people buy it. In some cases (Pahlmeyer), I doubt they will be able to raise the price any further. In other cases, why shouldn't a california Merlot be worth the same as Petrus, if it is of the same quality?

People talk about overpriced wines from California. How about overpriced wines from France? Can you say "Le Pin"? 2000 Lafite came out at $300, and that was when the dollar was strong. 2000 Margaux was $350. How many cases of these wines were produced? I will go out on a limb and say the production levels are the envy of every high-end Napa producer. In 2001, Harlan produced 1600 cases of the estate, and charged a measly $225 for it. Seems like a steal compared to 2000 Margaux, which generally produces over 12,000 cases a year of their first wine.

randy-i am not sure what that article has to do with my post or your argument. the excess you speak of, pertains largely to the inexpensive table wines of france, not the high end cuvees. the abundance of juice in france is similar to the abundance in the central coast of california. like many regions in the world france has plenty of mediocre wine.

contrasting france and napa is not valid. france is a country and napa is a region within a state. a better contrast would be comparing napa to the medoc or napa to st.emilion. if one attempted to plant new vineyards in pauillac without tearing out old vines first, there would be major problems. simply stated, there is not any land left.

next. i am not referring to a handful of cult wines. i am referring to all the wanabees. i specifically stated " one thing in common with cult wines, low production ". i am referring to all the wineries that produce low volume at high prices and i consider any wine over $60 to be a high price.

btw, the best alleviation of risk, is to make excellent wine in even weak vintages and then price the wine accordingly.

chateau pavie only makers one wine


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. Hmm, thats interesting. What about Pavie-decesse? Pavie-macquin? And since a number of chateaus hire the services of Michel Rolland and other consultants, how does that affect your statement?

randy-the above chateau only make one wine. if you are referring to the fact that they have similar names, sort of like silver oak and silverado, both have silver in their names. pavie and pavie decesse are both owned by perse. pavie macquin has a different owners. the use of michel rolland or other consultants has a great bearing on my statement. these people help the chateau reach their potential. many napa wineries must feel the same, as quite a few frenchman are now " consultants " in napa.

currency runs in cycles and the pendulum will change sometime in the furure. most of the european economies are doing much worse than ours. their currency has remained strong because their interest rates are much higher despite their poorer economy. the germans are still fighting the inflation war of the 1920's. jobs in europe are not important. once our interest rates begin catching up, the dollar will gain strength. not going to happen overnight, but will hapen.

when you speak about petrus or le pin, you are talking about the original cult wines. they are no different than harlan or screaming eagle, except there is wide world demand and higher prices. if a california merlot can bring itself to the level of petrus or le pin, then they will command the same type of pricing. at this point that has not happened. as far as lafite, margaux etc., these chateau are only able to command those prices in legendary vintages. check out their 2002 prices. i bought both at slightly above $90 with no shipping. one more time, i would rather have any vintage of peby faugeres, than an untried new napa $90 merlot.

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In 2001, Harlan produced 1600 cases of the estate, and charged a measly $225 for it.

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They produced 19,200 bottles of wine and I only got 1 allocated???

I will add this. If Harlan could quadruple their production the current price would not be sustainable in either the direct-from-winery or auction market IMHO. Of course I'd take more wine...in good years, but I wouldn't be forced to maintain good standing on the mailing list and there is no way I'd pay $225 for mediocre vintages. Even in great vintages the fact that secondary market valuation would tank would have me evaluate what other available 100 point wines are out there at <$225...and there are a good lot of them, most from France.
Did someone say Blankiet was as good as Petrus??? So is Marquis-Philips??? I've never had Blankiet or Petrus, but I will put my money on pedigree. I don't for one minute think you can get a degree from UC Davis, walk out sprinkle some seeds on a rocky hillside with cool evening breezes and early morning sun exposure, five years later pound some staves together and build a better wine than Petrus. Call me naive.

i guess i will never get allocated any. i refuse to play their game. i bought a case of 2000 pavie for less than the harlan price.

Stealthman, I won't call you naive... but I will call you a poor reader No one ever said Blankiet is as good as Petrus. Heck, I don't even like Blankiet! What I said was, when California produces a wine as good as Petrus, the price will be equivalent.
If Harlan quadrupled their production, they would have no issue with pricing, except in poor vintages, when they might have to do like Insignia is right now. Otherwise, you have a wine that is as good or better than any first growth out of the Medoc. As I pointed out above, those first growths are pretty pricey in good vintages... and California has more good vintages than bad.