The next new thing - Château Trump!

Trump Las Vegas (in a lovely part of town)

You may not be aware, that our favourite business entrepreneur Donald Trump recently seized upon the misfortune of a pair of embattled socialites to buy their winery at a knock-down price. The 776 acre Kluge winery in Virginia has been under new ownership since April, and it should come as no surprise that the folically challenged Mr Trump has no intention of becoming winemaker. Indeed, the former owner Patricia Kluge will stay on - "She has a great instinct for wine, which I don't," Mr Trump said. Forgive me for being a bit cynical at this point, but if she had such a great instinct then why was her entire Estate sold to Trump for one tenth of its pre-recession value? 

Those in the know say it won't be too long before the new brand of Château Trump appears on the market, no doubt with a label design smothered in gold (which appears to the trade mark of all his businesses).

P.S. I will confess now that have never tasted a wine made in Virginia.

For £2.99 a bottle it ain't Albariño!

There has been a lot of press recently about the price of wine and the ability of consumers to distinguish between good wine and cheap 'plonk'. As a wine professional I do hope that my own palate allows me to separate the wheat from the chaff, and my personal guideline to doing this is quite simple - you look for the 3 S's, in other words structure, structure and structure.

By this I mean the way in which a wine is put together, whether all its component parts are in balance - fruit, tannin, acidity, alcohol etc. For example, wines that are very well constructed might be described as having a fine structure, or in the case of a young wine that is not very forthcoming, a tight stucture. It's really the degree of harmony between these different elements that determines whether a wine is just average, or perhaps something really special .

The only thing I can say, is that the best wines (in my opinion) are not always the most obvious, they do not necessarily hit you between the eyes and yield themselves to you the moment you pull the cork. They often need time to 'open up' either in the bottle or in the glass, but boy, when they eventually do deliver you will know immediately, and the very best will have the ability to make the hairs on the back of your neck stand on end!

Indeed, there are many adjectives that you can use to describe a very fine wine, and journalists are much more adept at painting a picture than I am (they are, after all, attempting to translate the sensation of taste into words). I have never really been gifted when it comes to waxing lyrical about wines, but instead consider myself more of a technical taster, focusing on the component parts and how they might evolve and marry together, either now or sometime in the future. This is after all, the fundamental role of the buyer - to possess that special crystal ball.......

As always I digress. The original subject of today's post is the price of wine, and in particular a selection that I saw advertised on my TV at £2.99 a bottle. How do they do it (and do I really want to know)?

If you actually start to analyse the cost of getting a bottle to your supermarket shelf you might begin to understand what I mean.

By simply deducting the UK duty and VAT from your £2.99 bottle you are immediately reduced to a mere pittance of 69p! Then take into account, that this 69p has to include warehousing and shipping costs, the cost of the bottle, label, cork, capsule and carton - Oh! and by the way, the cost of the wine itself AND any profit for the wine producer and UK retailer.

Just a minute, my calculator has blown a fuse, it's trying to tell me that this simply doesn't add up! It's right, it doesn't add up. I think it's what they call a 'loss leader' - a product that sells below it's actual production cost.

I end by asking myself the inevitable question - can a wine at this price point really be any good?

Bogus Castro Martin 2012

They say that imitation is the sincerest form of flattery - this being the case, then it has to be said that the Chinese have been 'flattering' a lot of products over the years! Their latest target, wine.....

You may recall that a few months ago I was writing about Gallo's famous 'Red Bicyclette' Pinot Noir, whereby they were found guilty of passing off a blended wine as a single varietal. At least, in this particular Gallo case, the wine was actually produced in the country of origin - being made from French grapes, albeit not 100% Pinot Noir.

However, in this latest fraud it is the famous Jacob's Creek brand that is being ripped off ; an Australian Chardonnay that was actually produced in China! Hundreds of cases have been seized in London, where perhaps surprisingly, it was the consumers themselves who brought it to the attention of authorities. Customers complained to Pernot Ricard (the owners) that their beloved Aussie Chardonnay tasted 'unusual' or perhaps even 'diluted', it simply had 'a different taste and colour'. Of course a quick glance at the label might also have given the game away, as it boldly declared 'Wine of Austrlia' - presumably these sophisticated wine fraudsters did not have spellcheck on their computers.

Whatever next? Perhaps Castro Martin - Made in Taiwan?

R.I.P. Oddbins

Last Thursday must be viewed as a very sad day in the UK wine trade when the announcement was made that the Oddbins chain of wine shops was going into administration with debts of more than £20 million.

It is not that many years ago that Oddbins was regarded as the most avant garde of all wine retailers, and to be present on their shelves was one of the greatest accolades for any serious producer.

In those days not only did they have the most cutting-edge selection of wines, but they also boasted a highly original catalogue illustrated by the artist Ralph Steadman. By far their greatest asset at that time however, was one of the most highly respected buyers in the UK wine trade. No, not me, but a chap called Steve Daniel, who from personal experience I can tell you, had a very fine palate. It was Steve's exciting selection of new and original wines that put Oddbins at the forefront of the UK retail trade, and on the customer 'wishlist' of every wine producer.

To quote my journalist friend Tim Atkin, Oddbins were "quirky, audacious, arrogant and bloody good at what they did"..... long may they be remembered for their contibution in helping to make London (and the UK) the 'shop window of the wine world'.

Out of the office

Traditionally the months of January and February are pretty quiet in our Bodega, and it's therefore usually quite a good time to sqeeze in a little R&R (I don't mean rock & roll, but rest and relaxation!)

Obviously travelling costs money, so when times are tough we try to encompass a bit of work in our travels, as if to justify our time out of the office. This year we will incorporate two tastings in different cities across the world, and a few customer visits in a third.

As soon as we return, I have to attend to a bit of urgent family business in the UK, that will probably mean that the whole month of February will be lost to me. I am resisting the temptation to travel with a laptop, but will still have my trusty Blackberry at my side (there's no such thing as a real escape these days).

The big project upon my return is a complete re-hash of our main website and blog, indeed they will soon be one and the same, as our blog eventually becomes an integral part of the Castro Martin site.

By the way, I don't really have a view of downtown Los Angeles from my office, but on a clear day.....

Let's do business

Forget the phishing e-mails from Nigerian philanthropists anxious to share their millions, there is one e-mail that I enjoy receiving above all others..... from the anonymous wine buyer.

All too often we are approached by individuals posing as prospective buyers, claiming impressive international customer base, extensive sales team and all the trappings of an established business. Of course they are looking for exclusive representation of our wine, no doubt in return for a healthy commission.

Closer examination however reveals something a little closer to the truth - no fixed contact address, no website, a mobile phone number and a hotmail address - in complete contradiction to their claimed business credentials.

Suffice to say that I do not send samples!

Crisis? What crisis?

Politics are normally to be avoided in my blog, mostly because they have nothing to do with wine, but with Spain facing economic meltdown (or so we are led to believe), I thought that I should at least give it a mention.

José Luis Rodríguez Zapatero (known as Zeta P. by his supporters, and Mr Bean by others), together with the rest of his government, appear to be in denial, or perhaps have simply been waiting for either EU or IMF intervention to give them the excuse that he they been looking for..... that the drastic budget cuts that they are now forced to make are not actually of their own design, but have been forced upon them by outside agencies.

Following this pressure from overseas, not to mention a call from Obama himself, Sr Z. has recently announced a 15bn Euro austerity plan, but the likelihood is that this will not be enough. The crisis now looming in Spain has two main problems at its epicentre – Banking and Employment.

The country now suffers from more than 20% unemployment, and has a further 20% working as government functionaries. Until very recently new public sector workers were still being employed; positions which are highly sought after simply because they are considered as ‘jobs for life’, carrying generous benefits and pensions etc. Meanwhile, back in the real employment world, Spanish law makes it virtually impossible, or at the very least, cripplingly expensive to lay staff off, which in a recession leaves employers in an impossible situation – the labour market is in desperate need of reform.

Much of this unemployment is down to construction, or rather the lack of it. Spain has been living off the back of generous EU subsidies and an artificial construction boom for the last 20 years or so, when literally thousands of homes were built that were actually not needed - consequently they now stand empty.

Moving away from construction, it is of course the banking industry that really lays at the core of the recession, so in that sense Spain is by no means unique. Perhaps it is just their way of dealing with it that differs from the rest......

In contrast to the apparent success of Santander, it is the local savings banks (Cajas or Caixas) that are now failing, CajaSur being the latest victim. Here in Galicia two local Caixas have announced a merger of sorts. Caixa Galicia and Caixa Nova will merge, but will retain their own Presidents, their own board of directors and two separate head offices.... not much of a merger then! These two Caixas will however, close a few branches, which is hardly surprising – during the boom new branches were still springing up on every street corner in every town and village. For example, I think that the small town of Barrantes must have at least 7 or 8 banks, even more than the number of coffee bars!

So fasten your seatbelts, it looks like we could be in for a bumpy ride.

Onwards and upwards

Forgive me for being a little cynical, but they've just held the annual 'Primeur' tastings in Bordeaux, and guess what?...... Yes, 2009 is yet another vintage of the century! (I just hope someone is keeping count - of both the vintages and the centuries!)

I used to attend this tasting every year myself, but unfortunately I don't get much opportunity to sample many non-Galician or even non-Spanish wines these days. Of course this makes it impossible for me to judge exactly what is happening in Bordeaux, but suffice to say that I think that the expression "vintage of the century" has become a bit over-used, bordering on predictable. For example, I think this term has already been applied to both the 2000 and 2005 vintages in this decade, never mind this century.

The other thing that occured to me is how incredibly lucky the Bordelais actually are - or at least the ones who own properties at the top end of the classified growths. Even during a crisis (and this is certainly not the first) there often appears to be a new market that opens just in time to rescue sales, thereby preserving the astronomically high prices. This year it is the turn of China....

China now boasts more dollar millionaires than any other country on the planet, which hardly seems surprising for a country of 1.3 billion people you might think.... until you remember that it is still purported to be a Communist country - on paper at least. (Perhaps this is merely a good example of what they sometimes refer to as 'Champagne socialism').

Anyway, the Chinese have apparently developed a taste for very expensive red wine, and are single handedly doing their best to keep Bordeaux prices inflated - I just hope that they don't use their Petrus to make Coca Cola spritzers as was once rumoured!

To finish on a slightly more positive note, top Bordeaux wines have always proved to be a very good investment, and as a tangeable asset they have been almost 'recession proof' over the last few decades. They regularly outperform the stock market, and as someone once reminded me, even if the market collapses, you can still have one hell of a party to drown your sorrows!

Q1). Where does Kiwi Sauvignon Blanc come from?

If your answer was Marlborough, Hawkes Bay or indeed any part of New Zealand, then I'm afraid you'd be wrong. This particular Kiwi Cuvee, as you may imagine, is made from sauvignon blanc, but actually originates from the Loire Valley in France!

The battle of wine origin and name protection has been played out in court on many occassions over recent years, but more often than not with the French as plaintiffs. They have fought long and hard to protect famous names such as Champagne, Chablis et al, pointing to the laws of appellation d'origine as their justification.

Now, with delicious irony, an Australian tribunal has just prevented this French 'Kiwi' brand name from being registered down under, citing the obvious reason - that the name is quite simply misleading to consumers (which it clearly is). In their defence, the French argued that the word Kiwi is actually colloquial, and does not relate to a specific geographical place, which I guess is also true.

However, from my own point of view this story has it's own special significance....

Back in the 80's and 90's when I was a wine buyer I used to travel extensively in France. This was the time when 'new world' wines were still very much in their infancy, and whilst London was considered to be the 'shop window of the world' for these new discoveries, they were (and perhaps still are) largely unknown in France. By way of education, and partly out of mischief, I would sometimes travel to Sancerre and Pouilly-sur-Loire with bottles of new world sauvignon blanc in the boot of my car (trunk to my American readers). As I poured the Chilean, New Zealand or perhaps South African sauvignon for my French suppliers, the reaction was unequivocal and unanimous, the wine was "rubbish" - and that is the polite translation!

It would appear therefore, that in a few short years, the story has gone full circle. The French market share has shrunk so dramatically, that in an attempt to regain lost ground, they have actually started to imitate their new world competitors.

How times change!

The not so super-markets

Bodegas Castro Martin is in a very fortunate situation, working almost exclusively with the HoReCa (Hotel, Restaurant, Catering) sector of the market, and not dealing with any major supermarket chain in any country. I say fortunate because all too often the practices of the high street 'big boys' can be considered just a little unscrupulous, sometimes leaving their suppliers more than a little unhappy.

For example, 'multibuy'deals (3 for 2, 7 for 6 etc.) will always be funded by the supplier and never the supermarket. The unfortunate part of this arrangement is that these offers are not always negociated with the supplier beforehand, and can come as a very unwelcome surprise. Slightly more doubtful are the 'listing fees', when a producer will more or less pay to appear on the shelf, or perhaps even contribute a fixed amount to the opening of each new branch of the chain in question. Even more dubious demands include retrospective discount (outside the negociated contract) when a supermarket chain will simply enforce a lower price to improve their own profit margins.

The most unreasonable requirement however, has to be compensation for theft. When goods that are stolen from stores have to be reimbursed by the supplier...... I truly fail to see how this could be considered to be fair and equitable in any objective business environment.

Of course a supermarket supplier always has the option to walk away at any time, but in a harsh economic climate the opportunities to sell elsewhere can be few and far between, and some very large producers have little option but to comply, no matter how unreasonable the demand.

Perhaps the most unsettling part of this story is that many of the biggest operators annually announce profits running into the hundreds of millions, whilst in stark contrast the poor farmer or manufacturer can be left struggling simply to stay in business.

Today the UK government introduced a new code of practice to help protect farmers and food companies by enforcing supermarkets to keep written records of all negociations with suppliers. The new code will be regulated by an ombudsman who will be appointed to deal with complaints, and act as a go-between, thus protecting suppliers from potential 'bully-boy' tactics.

Another time, another place

In many countries around the world time plays an important part in peoples lives - the Swiss with their clock industry, the Japanese with their bullet trains, and the UK with their clock watchers (only joking!) - Spain is not one of these countries.

Now, some would say that the Spanish attitude to time is to be admired, creating a relaxed, informal, stress-free environment, whilst the hard-nosed business type might just say that it is just plain annoying. I think I am somewhere between the two - I don't want the stress, but I do want people to turn up on time for their appointments!

On face value some might say that the random attitude to time is taught from a very early age. For example, in some local schools which are supposed to start at 09.30am, I regularly see their school buses still out on the road with children on board at 09.35am or 09.40am. Not only does this apply to the official school buses, but also to the parents who are still delivering their children 10 or 15 minutes late, every day - so what sort of 'educational' message does that send out? Timekeeping should be regarded as merely an approximation - más o menos, more or less? Indeed, there are actually official signs hanging in hospital waiting rooms which rather confirm this by saying - your appointment time is only indicative, and will almost certainly not be respected...... (OK, so I added the second part myself). However, it is more than a little disconcerting to see your doctor or specialist arriving for work 10 or 15 minutes after the time of his or her first appointment. I'm afraid to say that I have experienced this myself on a couple of occasions with both doctors and dentists, and must say that I find it more than a little disrespectful, not to mention quite annoying.

I sometimes think that Spain appears to live in a quite different time zone to the rest of Europe, and one of the most common complaints of first time visitors are the meal times - Lunch from about 2pm to 4pm, and dinner starting from around 10pm until more or less whatever time you care to turn up. Joking apart, on many occassions I have witnessed people walking into restaurants at around 3.45pm and still being offered a table for lunch. I must say that I doubt if this would happen in Germany!

This seemingly casual attitude to time manifests itself in many different ways, not just in people failing to show up on time for appointments, but also in sending out invitations for meetings and business seminars etc. We often receive invitations for functions giving us only two or three days notice, that makes any forward planning extremely difficult. It sometimes gives the impression that the organiser has suddenly had a last minute idea, and then quickly sent out a few invites. Whilst I am sure that this is not really the case, it certainly keeps us on our toes, and our diaries fluid.

Oh, and one last thing - hands up how many countries you know that show childrens' Disney films starting at 10pm at night..... I know one.

Doing business in Spain

Now I don't often do this, and I may even get into trouble for doing it, but I am going to reproduce the text of an article written the other day in one of the UK's more serious newspapers. It simply highlights some of the idiosyncrasies and frustrations of doing business here in Spain, and could easily have been written by me (albeit that this version is much more succinct!) Unfortunately there are many painful truths.....

Spain is one of Europe’s great economic success stories; from low-wage backwater in the 1980s to modern global force today. However, do not be fooled by the shiny new wrapper: custom and tradition die hard in what is still an essentially conservative business society.

“Doing business in Spain is still more like negotiating in northern Africa than agreeing a deal in northern Europe,” says a British financier living in Madrid. “Si, Si often means no, no, and nothing gets done in a hurry.”

This lack or urgency may irritate those on a tight schedule. Spanish businessmen, particularly in multinational companies, are aware of this and will endeavour to adapt. However, government departments are indiscriminately bureaucratic and obstructive, despite regular promises by politicians to reduce red tape. In any case, it often pays to go with the flow.

Business meetings that may take 20 minutes in, say, Amsterdam, could drag on for an hour or more in Madrid. They can also seem a lot less structured, with participants appearing and disappearing with little explanation. Listening attentively, while a virtue in many societies, is optional in Spain.

“Be prepared for chaotic business negotiations,” advises the International Business Centre, a not-for-profit on-line advisory service. “Often numerous people will be speaking simultaneously.” Meetings are usually called or scheduled for late in the day, and run well into the evening.

Despite this relative chaos, business protocol and custom, though slowly dissolving in some sectors, is rigid. Attire is almost invariably sober and understated: dark suits, light shirts and conservative ties are the norm. One’s superior is always right and not to be contradicted, especially in front of others. Subordinates will often refer to a male chief executive as “Don” so-and-so, bestowing upon him a title best translated as “sir”.

Though foreigners are not expected to show the same deference, this treatment, on being introduced to the boss, will be appreciated. Use “Don” as part of a formal greeting, in Spanish, and your efforts will be noted. Simply effusing “Es un placer conocerle, Don Jaime”, or “Mucho gusto, Don Jaime” on shaking hands will unfailingly elicit compliments about the level of your Spanish. After that, first names are generally fine, though the occasional “Señor” followed by the surname will help maintain a basic level of formality. Get the surname right: Spaniards generally have two and, although customarily go by the first – which is the paternal one – they sometimes use the second. José Luis Rodríguez Zapatero, the prime minister, is a case in point.

Learning how to order a few favourite dishes in Spanish will also be a point-scorer. When there is business at hand, your host will generally insist on a three-course meal with wine, often prefaced with a beer and tapas and topped off with a post-prandial whisky or other spirit. These feasts rarely start before 2pm and can run to beyond 4pm, serving as a sort of long intermission in a commensurately long working day. Do not expect to find people in their offices during this time – Spaniards view with some disdain the idea of a quick sandwich at the desk.

Business is not necessarily the focus of what many would term a “working lunch”, but rather a way to get properly acquainted. “Ideally, you should talk shop at the table only if your Spanish companions initiate it,” advises ExecutivePlanet.com. “In any case, protocol requires that you wait until coffee is served at the end of the meal to bring up the subject of business.”

Avoid talk of politics until allegiances are established, and take note that Spaniards are sensitive to overt criticism of their country. “People in Spain – and other Latin societies – tend to confuse criticism of institutions with personal attacks,” says the head of an influential business lobby. This said, observations with a negative tinge are fine, although they are best offset with an equally unfavourable remark about one’s own country.

They also value family life above all else, so questions about your host’s family normally go down well. Football is another great leveller. Spaniards are also fiercely regional. The former chairman of one electricity group delighted in presenting to visitors a tome of photographs from his province. A few anecdotes about your own home will keep conversation flowing until talk finally gets around to business.