Mike Veseth - Wine Wars II: The Global Battle for the Soul of Wine

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Library of Congress Cataloging-in-Publication Data

Names: Veseth, Michael, author.

Title: Wine wars II : the global battle for the soul of wine / Mike Veseth.

Description: Lanham, Maryland : Rowman & Littlefield Publishers, [2022] | Includes bibliographical references and index.

Identifiers: LCCN 2021048542 (print) | LCCN 2021048543 (ebook) | ISBN 9781538163832 (paperback) | ISBN 9781538163849 (epub)

Subjects: LCSH: Wine industry. | GlobalizationEconomic aspects.

Classification: LCC HD9370.5.V475 2022 (print) | LCC HD9370.5 (ebook) | DDC 338.4/76632dc23/eng/20220208

LC record available at https://lccn.loc.gov/2021048542

LC ebook record available at https://lccn.loc.gov/2021048543

The paper used in this publication meets the minimum requirements of American National Standard for Information SciencesPermanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992.

I t was the best of wines, it was the worst of wines (apologies to fans of Charles Dickens). The global wineglass, it seems, is both quite empty and full to the brim. We live today in the best of times for wine if we evaluate the situation objectively, as economists like me are trained to do. Never before has so much good wine been made and so many wine choices offered up to consumers. For someone who loves wine, the glass is very full, indeed; it is hard to imagine better days than these. The global markets deliver a world of wine to your door. Drink up!

And yet many enthusiasts are anxious about the future of wine. The good news we find in our wineglasses and on the supermarket shelves is often accompanied by disturbing rumors, feelings, and forecasts. It is the worst of times, too, you seeespecially if you are a maker of cheap wine in France, Italy, or Spain, the largest wine-producing countries. Everything about wine is wrong for you. Consumption at home has been falling for decades and squeezing your market share, and import competition has increased. The rise in global wine drinking that you counted on to power your export business has unexpectedly stalled at exactly the wrong moment. You find yourself making the wrong wine in the wrong style from the wrong grapes at the wrong price and trying to sell it in the wrong places. You are betrayed at every turn by the markets that once treated you so well. You hold an empty glass, or so it must seem.

Times are troubling in Australia, too, where a wine boom was followed by a wine bust, when consumers around the world have seemingly turned away from the muscular Aussie wines they enjoyed so much just a few years ago. So the Aussies turned to China and, through lots of hard work, turned it into their number 1 export market, bigger that either the United States or the United Kingdom. Then the lucky countrys luck turned again. Driven by political disagreements that have nothing to do with wine, China imposed tariffs of more than 200 percent on Aussie wine, choking off this promising market.

Wine producers are optimists by nature, but they face serious challenges. Recession, pandemic, falling consumption, rising antidrinking lobbies, water shortages, global warming, and even raging brush fires all threaten the livelihoods of winegrowers and producers in many parts of the globe.

It is the worst of times for consumers, too, if they seek that special taste of a place that wine geeks like me call terroir . The wine in your half-empty glass is free of any technical flaw, but so what? Does it have a soul? Does it express any particular place or any producers distinct vision of what wine should be? This is the age of McWine, I have heard people say: wine that is all the same. When everything is the same, then it is all nothing! And whats worse than that?

These are good times and bad ones, too, for the world of winewhat a contradiction! What about the future? Will wines tale of two glasses have a happy ending? Or will our (excuse the Dickensian pun) grape expectations be crushed? Im an optimist about the future of wine, but as an economist, I am trained to pay close attention to the dismal side of any situation. I wrote this book to try to find out just how empty or full the global glass really is and how the world of wine is likely to change.

The first thing to understand about wine is that it is many things, not just one, in terms of both wine itself and the economic forces that drive the wine industry, so the story of the future of wine will necessarily be a complicated one. Although hundreds of factors will come into play as the wine world evolves, three big forces will almost certainly shape the overall pattern: globalization; brand-driven commodification; and resistance to these powerful winds, which I call the revenge of the terroirists. Globalization and commodification are economic push forces that are transforming the world of wine. The revenge of the terroirists is all about pushing back .

Globalization comes first. It isnt something new, as you will see, but it is a powerful force that is becoming even stronger. It is quite literally redrawing the world wine map, pushing it out from the Old World, where most of the earths wine is still produced, to many New Worlds, where both production and consumption are on the rise.

Wine has become a global or nearly global phenomenon, produced and widely consumed in a growing number of countries (except where religious edicts forbid it). The International Organisation of Vine and Wine (OIV), a sort of United Nations of the wine world, reports that 45 percent of the worlds wine crosses at least one international border on its way from grape to glass. Interestingly, wine is both global and local. Wine drinkers have a strong home country or region bias. Most of the wine consumed in France comes from France, for example, and Californians drink mostly California wine.

Ironically, the most global wines live at the top and bottom of the wine wall, my name for the various real and virtual spaces where wine enthusiasts confront the vast and often confusing supply of available wine. The top shelf holds Champagne, of course, and iconic wines that can sell for hundreds or even thousands of dollars. These wines travel the world, reaching collectors, investors, connoisseurs, and upwardly mobile wine snob wannabes wherever they live.

The bottom shelf of the wine wall holds inexpensive generic wines that can sell for as little as two dollars in the United States. In the European Union, you can get a liter of this wine for a single euro coin (VAT included). Some of these wines are packaged in traditional 750-milliliter bottles, but most of them come in other sorts of packages: 1.5-liter bottles; foil-lined cardboard tubes that look like exaggerated juice packs; and 3- and 5-liter casks of wine, cardboard boxes containing special plastic bags. You get to the wine through a spigot, not by pulling a cork, with these box or bag-in-a-box wines.