Jancis Robinson MW on the Davos tasting

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The Mines and Wines evening was one of many entertainments laid on for specific groups of delegates to the World Economic Forum, in this case those in the mining and metals industry. My brief was to choose some seriously notable wines from countries or regions with a tradition of mining.

The room’s favourites among the seven reds, which included a comforting Château Montelena 1995 Cabernet from Napa Valley and Viñedo Chadwick 2001 from Chile, were the two Australians, Moss Wood Cabernet Sauvignon 1995 from Margaret River which seemed at the peak of its complex yet restrained powers and the most expensive wine of all, the 1982 vintage of Australia’s most famous wine, Penfolds Grange, which was almost more like a liqueur than a wine, so rich and soft is it now – and arguably in the gentlest of declines.

Australia also triumphed in a blind tasting of 11 top 2001 Bordeaux blends from around the world the night before. I’d suggested 2001 as it was a California vintage that produced rather bordeauxlike wines that have evolved relatively slowly, thereby minimising some of the more obvious transatlantic differences. I’d also tasted the 2001 bordeaux recently which helped me make a selection from those available in the UK by the bottle (not that many – Brits are expected to buy by the dozen when wine is this expensive).

I knew what the wines were – one each from Chile, South Africa and Australia, three of California’s most famous, and five grand bordeaux, including three first growths – but had no idea what was in each glass. The 35 other tasters included wine lovers from the US, UK, Korea, Kuwait, India and Brazil, and the usual smattering of FT colleagues who had somehow managed to sign up for this off-piste event before 8.30 am when it filled up.

The team at the Waldhuus set everything up beautifully. Each of us had quite enough room for our 11 giant numbered glasses, poured about half an hour before we tasted, from bottles that had not been decanted as not much sediment had built up during the five years these wines had been in bottle. I urged everyone to concentrate on the wines’ quality rather than trying to work out where they came from and set to tasting, trying very hard to follow my own advice.

There was one wine, number five, which looked a little more developed than the others, had a particularly complex, earthy nose with the sort of flatteringly beautiful mineral balance that Ch Haut-Brion so often offers. “The polar opposite of wine number one”, I wrote, comparing it with the Viñedo Chadwick from Chile that was so obviously New World and trying desperately hard to charm. In the event this fifth wine turned out to be that rarely tasted but much discussed wine Screaming Eagle from the Napa Valley about which I wrote last year. This was by far the most expensive wine in our tasting, released at $500 a bottle to those on its mailing list and subsequently traded at multiples thereof.

The real surprise for me was how much I liked the only South African red, Vergelegen Cabernet Sauvignon 2001, another Anglo American production but far from Vergelegen’s most expensive wine and the least expensive wine in our tasting. At the time of writing it is on sale at www.buywineonline.co.uk for just £12.99 a bottle and Bridgeview Discount Liquors, New Jersey at $29.99. This charming combination of savoury nose, super-ripe fruit with real energy and very fine tannins, supplied direct from South Africa by Vergelegen’s chairman and Davos old hand Michael Spicer, was my favourite of all and the group’s third favourite.

But the group’s favourite was another Australian wine, Moss Wood Cabernet Sauvignon 2001 Margaret River, which winesearcher.com currently lists at £43 in the UK and a bargain $31.99 in the US. My third favourite, after the super-luscious Harlan Estate 2001 Napa Valley, this Western Australian managed to be both opulent and refreshing which is presumably what made it appeal so much.

As so often in these sort of comparisons, even the smartest bordeaux – perhaps particularly the smartest bordeaux – did not shine especially brightly. The favourite example was Ch Latour which was fifth favourite overall although Ch Lafite did not show nearly as well as it had done when I had a chance to taste all significant 2001 bordeaux blind last September. In this company it seemed uncomfortably tart.

There are many arguments of the apples and pears sort against doing these sorts of comparisons but I think that while consumers are free to choose how to spend their money, and it is no longer absolutely obvious where wines come from when tasting them blind, the exercise, which should be viewed as a one-night snapshot – wine judgments are never definitive – can be instructive. Especially for price snobs.

Jancis’s tasting notes

Moss Wood Cabernet Sauvignon 1995, Margaret River, Western Australia

19.0, Drink 2005-12

Remember the 2001 of this wine was the group favourite in the previous evening. This was even more glorious – at the peak of its silky, complex powers. [Well they may have ripped off the Pichon Lalande label, I couldn’t help feeling…] Beautifully balanced, at the peak of its powers, this was a concentrated ripe Cabernet with real complexity and a little more freshness than the other 1995 wines.

Moss Wood Cabernet Sauvignon 2001, Margaret River, Western Australia

18.5 Drink 2008-19

Bright deep crimson. Sweet polished nose. But such opulence on the palate it tastes almost Californian except that note of acidity. Really refreshing. This would be great with food. Just a very slightly raw note on the finish. [This wine really won over the room. It’s not cheap though.]

Keith Mugford of the prime Margaret River producer Moss Wood replies at length to some of my recent observations about his wines and the Australian wine industry, hoping, he says, thatpeople don’t mind seeing me with my MBA hat on. I’m a winemaker first and foremost but I have to be a business manager too, I suppose.

G’day Jancis,

This started as a note of thanks for your kind remarks about the Moss Wood wines in the Davos tastings. Clare and I are really very proud the wines showed well. However, it has evolved somewhat because your articles have raised a couple of issues I would like to debate. Politely, of course, as befits your web page! I also apologise at the start because it has become something of a lengthy tome.

In your notes for the Moss Wood 2001 Cabernet Sauvignon, you mentioned its price, saying it’s not cheap. I don’t understand the context, given that you didn’t apply the same consideration to the Bordeaux or Californian wines, all of which are substantially more expensive. I am worried that this may leave your readers with the impression that Moss Wood Cabernet Sauvignon is somehow overpriced, or worse still, more expensive than the latter group. The truth is the wine is significantly cheaper than its more fancied international rivals and one could take the view that therefore Moss Wood Cabernet Sauvignon offers very high quality at much lower prices and that this is a positive. I think it’s worth exploring the issue of price and the various factors drive it.

For what it’s worth, I believe the most important factors are quality, brand and cost, probably in that order. Starting with the last one, its role is quite straightforward but worth remembering. If the price fails to exceed cost there is no profit and eventually no business, no matter how passionate the producer may be about their wines. As you know, Moss Wood is a low yielding, hand-managed vineyard, with a quality focus in its management practices that demands people to be in and around the vines and wines all the time. While wine technology is marvellous, it cannot yet match the inputs of people. To use but one example, the very specific nature of correct shoot positioning required for a high quality vine canopy cannot yet be done by a machinevery close perhaps but still not yet good enough. So, while they are extremely valuable and fundamental to success, human beings are not cheap and fair enough too, particularly here in Australia. I acknowledge that all quality producers have to manage this cost, not just us, but feel that our prices reflect that we may be doing at least as well as our competitors and passing the benefit on to wine buyers. More importantly, these management techniques will put us at a significant disadvantage compared to those who use machine management and while we pass on an incremental increase in cost, hopefully we add a significant increment to quality.

Which brings me to wine quality and which in my humble opinion, is the most important. No matter what the strength of a brand or what the wine’s story, the customer is very disheartened if quality does not match price. This applies no matter whether the wine is Moss Wood or a cleanskin [unbranded bottled wine, the like of which mushroomed in the domestic Australian market during the recent grape glut – JR]. In fact, one could make the case that it applies even more to expensive wines because customers are very conservative and will rarely purchase again if their expectations aren’t met.

Having said this, strength of brand is an integral part of a wine’s offer and the first growth Bordeaux provide the classic example. Sure, they can sell their best vintages many times over but they have no difficulty selling their wines from lesser seasons. Their consistency of quality over many years, not to mention the glamour and tradition they bring to the wine business must surely earn them the right to be able to do this and charge more than most.

Unlike cost, it’s not so easy to measure the contribution of brand but we do have a proxy – the secondary wine market. No matter what one’s opinion of the value of wine as an investment, the secondary market price gives the upto-date consumer opinion of producer and vintage. Furthermore, this market puts a value on older vintages and which can be used as a guide as to how well the market thinks the wines have aged.

Moss Wood wines are seen to stand the test of time because prices for our older wines have remained strong.

No doubt you are aware that the price of Moss Wood Cabernet Sauvignon changed substantially with the release of the 1996 vintage. The change was driven largely by the dynamics of the wine market and more particularly, the secondary market. The preceding 1995 vintage [the one that was so delicious in our second Davos tasting – JR] was released in 1997 at $32 per bottle but could be traded immediately in the auction market for around $80 and, not surprisingly, people took this opportunity for arbitrage. Demand for the wine was unprecedented and while one would hope this was at least partly the result of its being one of the very best vintages of that decade, the reality is that people could buy from us and then trade it very quickly and profitably. In order to circumvent the problems this caused and take some benefit from the situation, we released the 1996 vintage at $65 per bottle, thereby reducing the arbitrage opportunity.

I hasten to add that it was not simply a case of pumping the price up with no additional benefit to the consumer. We also took the decision to make all the Cabernet Sauvignon in our “Special Reserve” style, which up to that point were our most highly regarded wines. They were also problematic, being very small volumes (200 cases) and only produced when we had both the right vintage quality and quantity. By the time we released the 1994 (in 1997), the Special Reserve had built up a huge demand but it was, in our view, more the scarcity than the quality that drove this. Our traditional label was the Moss Wood Cabernet Sauvignon, not the Special Reserve and we didn’t want the traditional wine to be seen as a lesser, or second, label. On the other hand, there was no denying that the wine did benefit from its additional ageing in both barrel and bottle and we felt the traditional Cabernet Sauvignon deserved the extra treatment. Accordingly, the 1996 vintage was bottled after 25 months in barrel and then held for a further 12 months in bottle before going on sale in July 1999.

There is another business issue that goes with this. Moss Wood has only two shareholders, Clare and Keith Mug ford, and in 1999 the Cabernet Sauvignon represented half our cash flow, so through 1998, we sacrificed half our earnings and in addition, pumped another year’s worth of working capital into our stock. This looks all very impressive on our balance sheet but for a small family company like ours, it was a massive commitmentbut we were prepared to make it to improve the quality of our wine. This remains an additional long term cost in our business, one that is disproportionately large, given our continued reliance on the Cabernet Sauvignon, although it is reduced these days because of wines like the Ribbon Vale and the Amy’s. I do not expect sympathy for this because these are business decisions and nobody made us do it. However, I would like to make the point that the cost of funds for the Mugford family is significantly higher than it is for the Rothschild family or indeed Foster’s Brewing. However, our wine has remained much cheaper than Chateau Lafite or Penfolds Bin 707. I quickly add that I do not wish to be seen to be critical of either of these wines, both of which are indeed deserving of their hard-earned reputations.

I hope I have argued our business case effectively. However, having said all of the above, I return to my favourite point. All the best laid wine business plans will turn to mush if we do not deliver on quality. This fundamental premise is the basis for all we do at Moss Wood and everyone who works with us there must get sick of hearing about it, although we are fortunate that they share our commitment. [The context for my original cheap ‘not cheap’ observation was that Moss Wood was considerably more expensive than the other Cabernets from outside Bordeaux and California, ie Chile and South Africa, but I’m convinced, I’m convinced… – JR]

Leaving behind the issue of price, I was also surprised by your comments about the Moss Wood label and its similarity to Pichon Lalande when discussing the 1995 Cabernet Sauvignon, or more particularly I felt that “ripped off” may have been slightly too harsh. It is interesting to look back to 1973, when the design was chosen (see page 5 of our Newsletter Issue 66). At that time, probably the only Australian wine the world knew was Kangarouge and although we set out to make wine of the best possible quality, it was never dreamt that Moss Wood might one day find itself on an international stage such as yours in Davos, included in tastings with wines like the great Chateau Lafite Rothschild. The simple, classic lines of the label attracted [Moss Wood’s original owners – JR] Bill and Sandra Pannell because they wanted clear presentation of whose wine it was, where it came from and what was the year of vintage. It was never intended that Moss Wood might be passed off as Chateau Pichon Lalande.

Having said that, globalisation has changed the wine industry dramatically over the last two decades and Clare and I have felt obliged to change too. You are not the first person to make the observation about the similarity of the labels and quite rightly too. And this is a serious issue now that Moss Wood and Pichon Lalande sell in many of the same markets (if not the same price points!).

Apart from acknowledging the primacy of Pichon’s claim to the basic design there was an issue of maturity for the Moss Wood brand. It is an Australian wine, individual enough and of sufficient quality to hold its own in international company, so its label should show it as Moss Wood and not an imitation of another wine. So, we worked with a designer to update and improve it (as seen on page 8 of our Newsletter Issue 66). The border is gone, as well as most of the gold print and with it any resemblance to a second growth Bordeaux. All of the Moss Wood wines have now changed to the new livery, except the Cabernet Sauvignon. This work was done in May 2007, too late for the then current release 2004 because its labelling had already been done with its bottling in May 2006. However, when the 2005 vintage is released this year, it will also carry the new design.

I hope you have found my points worthwhile, or at least interesting!

February 20 2008

It may amuse you, Jancis, that this has been several weeks in the making and I note you have since written a very interesting article about Australian wine last weekend. I must once again thank you for your kind remarks about Moss Wood but more importantly, I would like to endorse your view of the evolution of the industry here. I think Paul Henry is correct. We are only just learning about the true cost (and value) of water in this country and must recognise the key directions that will give us a more sustainable future. As a nation, it is very unlikely that we can continue to offer wine at the very low price points, for all sorts of environmental and financial reasons, but we have such a range of climates, topography and soils that give us the raw to develop a reputation for specialist individual and regional wine styles.

Which then leads me to pick up on your point about why grow Pinot Noir in a region that produces great Cabernet Sauvignon. There is no argument from me except to say we reserve the right to continue making the wine because we like doing so and are very big fans of the variety, not to mention Burgundy. And we would risk a Moss Wood mutiny if we stopped. However, with an eye to making better wine and the specialised regional wine styles that are emerging, Clare and I are getting involved on Mornington Peninsula and will make Pinot Noir there for the first time this year. I will keep you posted as we make suitable progress.

Thanks for your patience.

Cheers, Keith