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Lafitte Rothschild or French Rubbing Alcohol

From the Same Oak Barrel????

It’s called Globalization of the Wine Industry.

While the Barons of Bordeaux and the Dukes of Burgundy (along with all the out of touch wine snobs that still equate taste with price) might take umbrage with the above, it is difficult to ignore these related hard facts that you read about every day on the Internet.

Globalization, free trade and of course electronics  have made the major changes in how business is done in today’s world.  And as economists have been predicting since the 1930s, it has raised the standard of living for every one on this earth, but especially in the largest consumer market of the world, the United States.

You see, the big thing is that globalization does is eliminates monopolies at most levels. A monopolist’s  goal is to restrain trade, control the market and maintain high and unfair prices. Today, think about where the 3 biggest name semi- monopolists in US industry 25 years ago are today. General Motors, IBM and ATT were the darlings of conservative but savvy investors then. Today they are looked upon as “dawgs” because all three arrogantly thought they had a lock on their market.

The General Motors monopoly was based upon their belief that the American consumer would never buy foreign cars even though they were made better, were styled better and were less expensive. Today that archaic thought process seems hard to believe.

IBM also never believed that businesses and consumers would place confidence in off brand computers with foreign parts. They were convinced that their army of tall guys in grey flannel suits could intimidate, dominate and charge whatever the traffic would bear. Less than 25 years later a Texas University dropout starting in his garage has a company with greater market value than Giant IBM. And the result is that today’s Dell with 100 times the power and features of the IBM PC costs a little more than dinner for four at Tuscany. Meanwhile IBM is out of the personal computer business that they created.

ATT thought the government would continue to give them a monopoly on long distance calling so they maintained a top heavy management group that depended on confiscatory high prices. Remember the old line of urgency when some one would say “ I’m on the line long distance to New York.” Today that call costs the same as or less than a call to Carpenteria. The monopoly is gone. You and I now benefit from the choices of phone companies along with all the other choices above.  Globalization.

Well, the same thing has finally happened in the wine industry and the French , especially, are kicking and screaming as they try to maintain what they still blindly believe is a monopolistic position. Maintaining a monopoly and it’s related artificially high prices usually means restraining trade by limiting production.

And that is exactly what the French have been doing. While globalization may not have yet have hit the big names and actually may never because they have been, with the aid of French Law been restricting production and trade for 150 years, smaller wineries with lesser reputations are facing extinction. Of course the collapse of the Japanese economy taking those bubble rich high rollers out of the upscale market also had an effect on the French Grand Crus.

But bluntly, why should any rational consumer pay $30 a bottle for a usually mediocre Pouilly Fuisse or $60 for an equally lousy Puligny Montrachet (most of which the French won’t drink and dump off). They can buy a superior Chardonnay from Australia or a very superior Sauvignon Blanc from New Zealand for 1/3rd the price or almost any white from Columbia Crest in Washington at similar attractive prices.  

The same applies to the Reds. It is very hard for me to understand why some one would pay $300 for a Bordeaux future that had previously come in 9th out of 10 against wine judged above it that were only $24-$60.

Let’s face it. It is also hard to believe that ONLY that little stretch of land in Bordeaux or Burgundy can produce upscale and very satisfying wine. In today’s hi- tech world it is certainly reasonable that the enology scientists at UC Davis certainly can create ways to match or exceed what those intransigent French continue to claim can only be done by them. Think General Motors, IBM and ATT.

Of course we really know that UC Davis and others have already done it with the development of Napa and Sonoma and now Paso Robles, Santa Barbara, the Pacific Northwest and especially in the low real estate and labor cost areas of Australia and New Zealand.   

So now it is true that the French are selling off excess production to companies that use alcohol for other purposes than imbibing. Of course if they do it right, they may still be able to hypnotize that guy with the $1,000 Petrus in his $50,000 wine cellar to pay $25 for rubbing alcohol from Bordeaux. He certainly may be hypnotized into believing it will make him the next Roger Federer.

The Emperors Clothes will always be visible to a certain group of gullible people. But you can easily drink satisfying wines as often or more often than that small group, generally at 1/5th to 1/10th the price by just continuing to pull up FrankAboutfood.com.

Is that too much to ask? Or even better e- mail us for any questions for value wine purchasing or food and wine pairing.