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Prices soar in supermarket surge

by Cassie du Plessis

With all the hype around the 28th International Nederburg Auction of Rare South African Wines - the biggest and most glamorous event on the Cape wine calendar - one would tend to think this is all about figures ... Sales figures, wine industry and wine trade "public figures" ... and figures of the models on the ramp at the mammoth fashion show.

And in the whole process, the models' figures are all that remain lean and bare - talking about the age of "transparency"! - while the wine prices just keep on growing.

Yes, the buzz is all about records ... more wines, more participants, more turnover. But, ultimately its significance lies in quality - measuring the status of the land's wine quality in the face of its international challenges ... a quality event showcasing quality wines - purchased by professionals who know what they want and recognise quality worth paying for.

Auction manager Bennie Howard believes that these days the buyers are very purposeful and informed. At the same time, there is a marked swing away from the fruitier, early drinking 'New World style' red wines to more classic, complex, matured wines.

This, together with a continued healthy competition between the South African supermarket buyers and foreign participants, made for another record-breaking Nederburg ... when the Boland autumn sun once again shone brilliantly on the event which attracted some 1 600 buyers, wine industry personalities, media and dignitaries.

The record prices realised, believes Bennie, had a lot to do with the fact that the South African winemakers now increasingly manage to turn out wines of international standard. The gap between "ordinary" wines and the elite products is widening. "We're moving in the direction of developing a new dimension of 'super premium' wines," he said.
Cheers for charity
  • The charity auction raised R193 500 in aid of the Hospice Association of South Africa (HASA)
  • Joe Kraatz of Namibia paid R12 000 for the rare 1780 BOAL vintage wine from Madeira.
  • Franklin Tree paid the highest price of R65 000 for a gourmet excursion on the Blue Train with Nederburg cellarmaster Razvan Macici and a full set of the first Nederburg Cabernet Sauvignon vintage of the millennium, in 10 bottles ranging in size from 250 ml to 27 litres.
  • Harry Viljoen, former Springbok rugby coach, now has something to open on special occasions not likely to be rugby-linked. He purchased 20 consecutive vintages of Overgaauw Cabernet Sauvignon spanning 1972 - 1991.

The fact that supermarket purchases once again dominated, by representing a third of total sales, means that probably more top wines than ever before will be available to domestic consumers who are prepared to pay that extra premium to get the best. This also means that supermarkets have in recent years considerably widened their spectrum on offer from the early days when they used to be more in the business of "affordables." This is probably also a spin-off from a more informed, quality conscious buying public.

Leading the buying for the third year running was Spar's Ray Edwards, who purchased 1 288 cases at R1,1 million. This was followed by Makro and Pick 'n Pay, buying for about R500 000 each, and Shoprite-Checkers coming in at R184 700.

Liquor groups Big Five Duty Free spent R406 700 and Wholesale Liquor Warehouse (Metcash) R258 710. Also among the top ten buyers were the Cape Town Fish Market who bought to the value of R226 880 and Cybercellar for R187 760.

The export market took nearly 18% (Namibia included), with Franklin Tree, a British wine broker resident in Switzerland, accounting for R241 260 and stalwart importers Grays Limited of Mauritius for R192 380. Other big international buyers came from the United Kingdom, Belgium, Indonesia and Zambia. Buyers, journalists and guests from 28 countries attended the auction.

This supermarket surge has probably saved Nederburg from a few lean years, because foreign buying has not exactly set the Auction on fire, having decreased from a peak of 46% in 1994 to around 9% last year and the year before, and this year's 18%.

Bennie points out, however, that with Big Five Duty Free and Cybercellar's purchases included, the wines earmarked for foreign destinations probably represent about 25% of sales. Following the first Nederburg Auction in the Distell fold last year, the company declared it a priority to increase overseas buying.

Other vital statistics:

  • The turnover this year amounted to R7,3 million - up nearly 14%.
  • The average price per case (12 X 750 ml or 9 litres equivalent) was R1 153,93. This boils down to around R96 a standard bottle or R16 a glass! (In 1975 the price per case was R19,21!)
  • Red wines, comprising 70% of the wines, averaged R1 310 per case (9 litres equivalent). Among the top selling reds were the Nederburg Auction Cabernet Sauvignon 1972 at R8 400 a case (12 x 750 ml), Kanonkop Paul Sauer 1993 and Stellenzicht Syrah 1994, both selling for R2 900 (6 x 750 l).
  • Other category leaders were: Vergelegen Chardonnay Reserve 1999 among dry whites with R2 700 a case (6 x 750 ml); De Wetshof Edeloes 1998 (6 x 500 ml) among noble late harvests at R1 800 per case; Nederburg Muscadel/CheninBlanc SLH 2002 (12 x 75) led semi-sweets with R430 a case; fortifieds: Boland White Muscadel 1993 (12 x 750) at R580; Ports: Monis Stamp Collection 1948 (6 x 750): R2 700, and MCC: Pongrącz 1990 (1 x 3l) at R680.
  • Altogether 157 wines were on offer from 84 producers, including 17 new participants.
  • Chenin Blanc fared like this: Fleur du Cap 2000 Reserve (6 x 750ml) R204 a case average, Fort Simon Barrel Fermented Reserve 2001 (6 x 750ml) R226, and Ken Forrester 2000 (6 x 750ml) R466.
If you look at the "fine print", you'll see that Nederburg remains the masters of their own auction. The answer lies in a unique combination of a quality tradition and huge volumes on offer:
  • Among its 21 items auctioned the Nederburg Cabernet Sauvignon/Shiraz 1995 and Nederburg Auction Reserve Shiraz 1995 collectively realised R984 000 for 880 cases.
  • Nederburg's total income from wines sold was R3 658 940 - thus almost half the total Auction income, excluding its commission on other sales.?.
  • The Nederburg Petit Verdot Reserve 1997, which made a debut for this varietal at Nederburg, averaged an impressive R930 per case for 210 cases sold.

'Quality will counteract overproduction'

Marchese Piero Antinori, guest speaker

We find ourselves on the threshold of a new cycle; that of an overproduction of "fine wines" on an international scale. And when there is overproduction, the productive chain inevitably suffers, hence problems of a structural nature arise.

I firmly believe that, today more than ever, it is vital to have a vision, a long-term vision, clear ideas, perseverance and above all, a great passion, for the product, for the land of its origin and a real obsession for quality.

I am convinced that everyone, big and small, has a role to play, both today and in the future, on the condition, of course, that quality is ever-present. Consolidation to some extent is inevitable, as the degree of structural fragmentation in the wine industry is probably excessive and unequalled by any other sector (with about 50 000 brands worldwide).

In a world of increasing competition and globalisation, there is no room for products, which, in their category and price range, do not meet absolutely perfect standards ? an event such as the Nederburg Auction enhances the image of South Africa's premium wines and provides a springboard for global marketing. - Marchese Piero Antinori, president of the Antinori Company of Italy, in his opening address.
The six main varieties, so-called "international", will remain strong and will continue to dominate. At the same time, however, there will be an increasing interest in local varieties that boast specific characteristics.

A distinction between the Old World and the New World will remain, but I perceive a growing area of overlap.

In the New World, in fact, more and more value is being attributed to territorial identity, to the characteristics of the "terroir", to the appellations of origin and the sub-appellations and to the vineyard designation of the wines.

On the other hand, for a certain category of wines at least the Old World is placing more and more importance on the name of the grape variety, as this offers the consumer clarification and simplicity.

South Africa is in the unique position of being somewhere between the Old and the New World and could play a very important role of harmonising different viewpoints.

Quality remains the crucial condition for success. This reality (of products which have to meet absolutely perfect standards in their category and price range) will not only render our work more demanding, but will also lead to a general rise in consumption, because more and more quality wines will be available at reasonable prices.

- extracted from Mr Antinori's opening address; see also International Profile, page 45.

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