Grange conundrum

The annual Penfolds Grange-release bun fight started before the official 1991-vintage launch on June 3. Grange’s long march onto the world stage has been marked by controversies of a different kind at every phase of its ascent to glory.

Once again wine writers joined the fray, even offering, somewhat naively I thought, spurious consumer advice on what the retail price should be, based on its wholesale price.

What the Sydney Morning Herald’s Huon Hooke and The Australian Financial Review’s Tim White overlook (in coming up with prices of $144 and $165 respectively) is that few humans (even retailers) feel inclined to sell something for less than it’s worth.

In the Australian liquor retail jungle, a survival-of-the-fittest mentality prevails. Fear of lost sales, paranoia – even loathing – of competitors translate, despite the current wine shortage, into low prices. Astute wine drinkers can find any number of leading brands selling at or near cost seven days a week simply by shopping around.

But the slash and burn retail mentality stops short of Grange. It’s scarce. It’s rationed! Most retailers get just a few cases, if that. So up goes the price.

The only glimmer of hope for genuine wine drinkers (as opposed to wine speculators) is a retailer desire to maintain good will. A number I’ve spoken to say they have a shelf price (their best guess of market value) and a lower price on perhaps a bottle or two for good customers. They’ll drop around $50 a bottle to keep highly valued customers happy. But there’ll be few mates’ rates and little opportunity for speculators to pick up a bargain.

And what will happen to the speculative gap – somewhere in the vicinity of $100 – between a ‘normal ‘ price were Grange not so scarce – and its present level of around $300?

One retailer told me that very wealthy, knowledgeable wine drinkers wouldn’t touch Grange at that price. Those rich drinkers see at least equal quality – and far better value – in top Bordeaux and Burgundy reds at around half the price of Grange.

Add to this a tendency in export markets, so I’m told, for Grange to sell at a ‘normal’ retail price, and we might surmise that the speculative gap is a mainly Australian phenomenon sparked, perhaps, by folks who have no intention of drinking it!

So, if the price gap between speculative Australian prices and non-speculative foreign prices becomes wide enough, the bubble might be pricked by a rash of repatriated Grange — and we’d end up with an international price somewhere around that fetched by the Bordeaux First Growths.

On the other hand, Grange fever may spread globally. International acclaim grows almost daily. And the quantity available is tiny. Even so, speculative markets invariably burst. But when they do, solid assets have a floor value and the shrewd investors move in when prices dip below that. Hard to say where it is with Grange, but I doubt it will be below that of Bordeaux’s top wines.

And what about those of us just looking for a good drink? What can we aspire to with Grange totally out of reach?

Well, there’s the just-released Penfolds Cabernet Sauvignon Bin 707 1993 – a sensational red for long-term cellaring – known affectionately within Penfolds as Grange Cabernet. To my taste it’s in a quality league with Grange, which makes it a bargain for between $45 and $70 (it’s anybody’s guess these days!).

Or for a more modest $30 (or so) try Seppelts Dorrien Cabernet Sauvignon 1991 or Drumborg Vineyard Cabernet Sauvignon 1991. It’s rare to see reds of this age released. And, the rich, ripe former, coming from the warm Barossa Valley, contrasts totally with the elegant, austere latter, from the very cool Drumborg Vineyard (not far from Portland, South Western Victoria).

Or, for something completely different, exceedingly scarce, and pretty well available only from the wine maker, try Majella Coonawarra Shiraz 1994. To me it’s one of the very best of a new wave of top wines, sourced from individual vineyards.

The Majella vineyard was planted by the Lynn family in 1968 and until 1991 all the grapes were sold. But the sheer quality of wine produced from Majella grapes persuaded brothers Brian and Anthony to send a little of the best to wine maker Bruce Gregory up at Brands Winery.

I discovered that fabulous 1991 at Nibs Restaurant Coonawarra in 1993. It sold for less than $15. Even the 1993 sold for just $15.99 at cellar door. And the brilliant 1994 should still be under $20 upon release. To me this is where the smart red-drinkers money is – honing in on future champions early.

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