Wine News Roundup

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Is the earth spinning faster? And shrinking? A review of wine industry news from 2013 reveals that local events have global repercussions, especially when big money turns to wine investments for cachet, status or profit. One that caught my eye was “A Sonoma Story” by Julie Pendray (http://jpendray1.wordpress.com) who blogged, “I left the area afraid for my life.”

Avowing, “Sonoma is not an island. What happens there affects the rest of the world,” Pendray got caught up in a controversy over the ongoing efforts of a grass-roots group of Sonoma, California, locals (aka “Bohemians”) to defend the valley’s historic and pastoral lifestyle (aka “Slo-noma”) from big resorts and casinos. She found herself publicly maligned and privately threatened after she investigated a developer whose plans for a resort hotel in downtown Sonoma spurred a voters’ initiative to limit hotels to 24 rooms. The developer lives in Sonoma, but his interests range much further, as his lobbying company represents Las Vegas casinos, thoroughbred breeders and communications companies. He also owns most of the region’s radio, TV and news companies.

The hotel limitation vote went down as the pro-development side persuaded townspeople that hotel construction would bring jobs to the region. Sonoma’s economy is hurting after Federal regulators seized the Sonoma Valley Bank in 2010. Some wonder why this bank’s officers loaned $15 million to a Reno and Marin real estate investor with a bad credit record and insurance fraud arrests. It reminds me of how, in 1985 Barclay’s bankrolled Le Rêve winery in Southampton $6.6 million, although its owner had defaulted on a nightclub property only months previously. Le Rêve went bankrupt in 1992.

In Manhattan, a highly publicized fraud case was resolved on December 18 when Indonesian wine collector Rudy Kurniawan was convicted of counterfeiting expensive, rare wines by blending of old Burgundies from bad vintages with young California wines. Feted for years as a collector who generously shared his treasures with wealthy wine aficionados, Kurniawan’s auction activities stimulated the feeding frenzy that increased values of fine wine worldwide from $90 million to over $300 million between 2002 and 2007.

As in Sonoma, the increase in fine wine values, though shaken by the economic meltdown of 2008, continues to touch global real estate development. On December 20, in Bordeaux, France, the owner of Château de la Rivière, James Gregoire, sold his estate to billionaire Chinese hotel magnate Lam Kok. Hours after the papers were signed, Gregoire took Kok and his son on a celebratory helicopter ride and crashed into the Dordogne, killing all aboard.

Kok’s wife and business partner had backed out of the ride at the last minute, saying she was “scared of helicopters.” It’s too soon to know if she will fulfill the couple’s plans to turn the château into an upscale hotel, wine and tea-tasting center, but let’s note that by 2016, Chinese wine consumption should reach 400 million unit cases, as wine grows as a status symbol for wealthy Chinese.

Noting a sad coincidence, when I co-owned Hargrave Vineyard in Cutchogue we lost a French investor who wanted us to build a champagne house on Long Island when he crashed his plane flying it over his property in Bordeaux.

While global enthusiasm for status wines and wine tourism grows, competition is driving prices down at the low end. In Australia, growers in Victoria and New South Wales say “it’s Armageddon” after wineries announced 50-percent cuts in grape prices. Many will pull out vines and plant alternative crops.

Making news here on Long Island, on December 17 the State Liquor Authority revoked the license of Cutchogue’s controversial Vineyard 48, where raucous parties have created blow-back affecting other wineries’ tourist-oriented activities. While some cry “The barbarians are at the gates,” others point out the rights of free enterprise.

Paumanok Vineyard owner Charles Massoud’s suggests on thecorkreport.com, “If the industry is serious about being seen as a high quality wine producer … it will attract a different kind of a tourist, one that is more serious about wine and probably needing less policing.”

How does news from Sonoma, Bordeaux and the rest of the world relate to the East End? What about the 2013 “fast tracking” of development in 600 acres of Riverhead’s EPCAL zone? Oh, let’s throw caution to the wind and write permits for, what? A casino? An artificial ski slope? Heck, let’s build houses, ignoring that these will need schools, police and roads—costing far more than the tax revenue they may generate.

Isn’t a pristine agricultural region within 70 miles of Manhattan worth more, ultimately?

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