Reader ScottS comments that the main problem with Parker and his points is that he's too powerful. He argues that a larger pool of reviewers, each with less power, would lessen the unfortunate market effects of Parker dominance and provide consumers with a more valuable metric for choosing wines.
I think the first is definitely correct. Scoring would be more ambiguous and would develop over time rather than appearing full-formed the day each issue of the Wine Advocate comes out. The crass market responses wouldn't be nearly so overt, and the overall market-driving power of the scores would be reduced because no one score or even compilation of scores would have the authority Parker currently does.
On the other hand, I'm less sure about the second point. When Parker gives a certain score, the consumer knows what it means. Parker has well-defined and well-understood preferences and gives 95's to one sort of wine and 92's to another. Even if you disagree with Parker's metric, a Parker score provides the consumer with information about the wine. A bundle of scores, averaged together, from various reviewers is far less helpful. Who knows what each of their preferences or scoring criteria are.
The fact that I can't accept ScottS's analogy between wine- and movie-reviewing is relevant here. Heavily reviewed movies tend to be mass-market phenomena with large family resemblances. Wines on the other hand differ enormously in very subtle and intricate ways. That, combined with the fact that reliable wine-reviewing requires a certain expertise, makes reliance on average reviews via a movie-esque star system unhelpful.
Of course, there is an enormous market for debased, uninteresting, industrial-style, mass-produced wine--in other words, wine that hardly deserves to be called wine at all--and perhaps the movie approach to reviewing is useful there. But from his comments it doesn't sound like that's the sort of wine ScottS is into, and if that's the sort of wine you're drinking you might as well just drink Smirnoff Ice. If you want to choose between a Lynch-Bages and a Cos de Estournel, conglomerations of reviews aren't going to help you much. The only exception I can think of is in the extremes--if one of them is really out-of-character bad in a particular year.
Tuesday, May 15, 2007
Scoring Metastasis
Monday, May 14, 2007
Parker on 2006 Bordeaux Futures
Pricing is starting to roll out for 2006 Bordeaux futures, and already prospective buyers are up in arms about prices that are not far below those from 2005, a far superior vintage. The usual venting has been on display on the Squires Board, and Robert Parker himself weighed in on this thread. As usual, Parker's market analysis is worth hearing:
I still believe the "futures" market in the USA will be largely a failure....we presumably purchased loads of expensive 05s, after taking a gigantic position on 2000s....moreover, the dollar is so weak that it just doesn't make much sense to pay up front two years in advance....what if 2007 is fabulous?.....too many negatives working against the USA buyer.
In his book on Bordeaux, Parker advises that there are only four valid reasons for purchasing Bordeaux futures (two years before the wines actually hit the shelves): superb wine from a great vintage; prices that will save you money 2-3 years down the line; securing a limited production wine; or buying in bottle sizes other than the standard 750 ml. Right now, it just does not look like the first two conditions are being met, despite wines that have surpassed the initially dismal expectations for the 2006 vintage. Of course, as Parker observes:
I definitely believe the finest 06s are superior and more complete wines than the 2004s, but the Bordelais also realize that and will price the 06s accordingly...will be interesting to see if the "new" emerging markets....eastern Europe, central and South America, and of course the Pacific rim countries, take important positions on 06s.
Parker acknowledges that his 2006 report gave the Bordelais license to price the '06s above the '04s, despite the hope of many consumers to see Bordeaux prices fall back to earth. Here's hoping that a failed 2006 en primeur campaign in the U.S., as Parker predicts, will help bring the market in that direction.
Thursday, May 10, 2007
Burghound and the Market
I certainly agree with Jeffrey's post below that there is more good-will and appreciation felt by wine collectors toward Allen Meadows, the Burghound, than toward other critics like Parker or Jim Laube. Yet I have seen signs in recent weeks of a growing frustration with Burghound's role in stimulating unprecedented demand and setting the market for what many collectors will be a very expensive 2005 Burgundy campaign.
Meadows comes in for criticism not for the wines he chooses to rate highly but rather for rating wines in the first place and, more fairly, for the timing of his reviews. Burgundy collectors are obsessive and intensively secretive by nature. They are reluctant to share the sources of their highly sought-after allocations and sometimes even the identities of their favorites for fear of losing out or being priced out. Meadows, many feel, has let the cat out of the bag, so to speak, pointing the way for novices toward hidden gems and undervalued treasures previously known only to insiders. And certainly, the timing of his reviews could not have been worse, as his 2005 Cote de Nuits issue -- "quite simply the best top to bottom vintage I have ever seen, period, full stop" -- came out well before most of the wines reviewed were even offered for sale in the U.S. Given the estimated 20% ex cellar price increase over 2004, we certainly know who in the supply change is gouging the American consumer.
Meadows reportedly sold more single issues of his Cote de Nuits report than all of the previous Burghound issues combined and is said to be concerned over the role he has played in the unprecedentedly stratospheric '05 Burgundy pricing. This Parker-esque market domination is uncharted territory for Burgundy, as The Wine Advocate's longtime Burgundy reviewer, Pierre-Antoine Rovani, generally favored the region's ripest wines and vintages while the traditional Burgundy consumer has favored elegance, balance, and finesse -- all of the qualities dear to Meadows. To cite just two examples of Meadows' influence: on the day Meadows' Cote de Beaune report was released, Bouchard's Le Corton (AM 93-95) sold out at Premier Cru for $89.95 and reappeared the next day at $109.95; Angerville's Volnay "Champans" (AM 93-95) had a one-day jump from $95.00 to $110.00 at Zachys.
Yet while rising prices are an inevitability, particularly with all the hysteria surrounding this unique vintage, I don't believe Burgundy will be subject to the same efficient market forces as Bordeaux. The far smaller production volume and the allocation system mean that Burgundy just cannot be bought and traded in the same way classified Bordeaux is. Moreover, there is a far healthier attitude toward wine in Burgundy, where it is treated as an artisanal product vinified by farmers rather than commodities produced by millionaire Chateau owners and sold by greedy negociants. And in the meantime, Burghound's growing influence can only bring about improvements in the region, as producers gravitate toward the more elegant and balanced style that Meadows favors -- and has long proven to be the hallmark of the very best Pinot Noir.
Scoring in Burgundy
Robert Parker takes a lot of flak for publishing wine scores. But others do it too, including Wine Spectator and the International Wine Cellar. Because they are far less influential, those magazines don't receive the same amount of public criticism that Parker does, although I suspect that the vast majority of Parker's critics don't have an especially high opinion of Shanken or Tanzer (the publishers of Wine Spectator and IWC, respectively).
By comparison, Allen Meadows is beginning to have an effect on the market for Burgundy similar to that Parker has on the market for Bordeaux. His publication, Burghound, is rapidly becoming the go-to resource for Burgundy enthusiasts and, upon release of his quarterly reports, highly-rated wines sell-out rapidly.
Yet, Meadows does not come in for the same criticism that Parker does. And he is rating wines whose enthusiasts are most likely to be Parker critics. Red Burgundy is famously elegant and reserved rather than forward and fruity; Parker is well-known for giving relatively poor ratings to what most Burgundy lovers consider great wines; and those Burgundy lovers are well-known for claiming that Parker just "doesn't get" the region's wines. Burgundy enthusiasts celebrate the individuality of each wine and the particular characteristics of of the many specific vineyards into which Burgundy's wine regions are subdivided.
So why the appreciation for Meadows? He's doing precisely the same thing as Parker: providing reductionist tasting notes and numerical scores for hundreds of wines. And most Burgundy lovers make their case for the region's wine precisely because it does not lend itself to that approach. Each wine is unique, with its own characteristics, and not susceptible to ordinal ranking on some absolute scale.
Perhaps what makes Meadows palatable is that he has the "right" attitude toward wine and Burgundy in particular. Every issue of Burghound comes with a disclaimer that "Burgundies that emphasize purity, elegance, overall balance and a clear expression of the underlying terroir are rated more highly . . . a Volnay should taste like a Volnay." In other words, unlike Parker, Meadows is not giving high ratings to the sort of wines that Parker critics disapprove of. And that's something. But ultimately why should it let him off the hook? The scoring/tasting note system is objectionable and that's what Meadows provides. As a Burghound subscriber (thanks to the market forces I discussed in my previous post) I often ask myself this.
Reasons and Wine Scores
Simon posts below on a particular facet of the perverse dominance of Robert Parker’s Wine Advocate on the market for red Bordeaux. Not only do we experience the general ill effects—commercialization, homogenization to his preferences, etc.—of Parker’s power to impose market-driving, numerical scores on the wines he reviews, but also the particular opportunity for malfeasance when retailers get the numbers before consumers do.
The usual explanation of why all this has come about focuses on the supposed deficiencies of the American wine consumer: his desire for quick, straightforward, and simple metrics of quality and success and his preference for Parker’s favored styles of wine. While that’s part of the story, I don’t think that fully captures what’s going on. As everyone knows, the prices of fine wines have been going into the stratosphere over the past several decades. When first growth Bordeaux went for ten dollars a bottle or less, people could afford to experiment or to buy wines based on reputation. If a bottle turned out not to be good, it was a small loss. But with prices now in the hundreds (and even thousands for the most desirable wines) of dollars a bottle, the vast majority of wine consumers, even those who are willing to spend $300 here and there, can’t afford to buy Pavie Macquin or similar wines and just hope that they happen to be good in a particular year. The consumer needs some basis to justify shelling out three-figure sums. Thus the power of the score. It’s a terrible situation, with all sorts of negative externalities, but it’s also the natural result of the price of wine in today’s world.
That said, the other problem here is Parker’s deplorable set of criteria for handing out high scores. If he awarded good scores to relatively austere, elegant, complex, and varied wines rather than to hedonistic fruit bombs, things wouldn’t be so bad. But the rise of point scores is, I think, the unfortunate but inevitable result of increased demand for wines.
Leaked Parker Points and Rising Prices
Ever since the legendary 1982 vintage, wine critic Robert Parker has made and driven the market for Bordeaux. Yet the recent leaking of Parker's latest scores for the 2005 vintage in Bordeaux, before his online subscribers had access to them, has brought into clear focus just what today's Bordeaux market has become: an efficient, world-wide commodities market, where cut-throat traders seek to exploit asymmetrical information, target mispriced offerings, and utilize all the technological advantages at their disposal.
The particular mechanisms of this market recently came to the forefront with the latest release of Parker's Wine Advocate. Parker offers a print and online version of his newsletter, and in an attempt at fairness to his traditional print-based audience, mails out his latest issue from Maryland two to three days before the reviews are posted online. Needless to say, this situation creates rampant arbitrage opportunities.
Bordeaux, of course, has long been bought and sold as a commodity, thanks to its historic pedigree, worldwide demand, and, most crucially, a large volume of production whose wines carry with them a nearly universally accepted numerical Parker score. This is a unique market situation in today's wine world that, thankfully, has not yet taken hold in other regions.
The latest issue had Parker's first reviews of 2006 Bordeaux (not yet on the market) as well as his second reviews of 2005 Bordeaux, which Parker has hailed as "an extraordinary vintage and one that is different from anything I have tasted in the last twenty-eight years." On the morning of May 2, a day before the reviews were set to be posted online, retailers worldwide were publicizing Parker's 2006 ratings -- probably obtained from a local print subscriber who makes a tidy sum faxing and PDF-ing the latest issue worldwide. The 2006 scores had no real financial value and so were freely disseminated, but the 2005 scores, which presumably these retailers also obtained, were guarded like state secrets.
This situation caused a panic on the Squires Bulletin Board, with rampant speculation about which wines were most likely to receive an "upgrade" from their initial score last April and posters hyperventilating about retailers who were set to gouge consumers with this asymmetrical information. There were even reports of "runs" on particular wines at various stores, like Premier Cru, on the barest hint of a rumor of an upgrade. While some print subscribers who had already received copies may have been able to secure some of the "upgraded" wines at their previous prices, the "leaked" 2005 scores primarily served the interests of those in the trade, for their own pricing and trading purposes, to the detriment of the consumer.
To take one example, the 2005 Pavie Macquin received one of the most significant upgrades from Parker, from 94-96 points to 96-100 points. This was a wine widely available for $99.95, or less, on and before May 2 but was now unobtainable at that price, even before the scores were posted online. It now sells for around $200.00. And this is far from the only case, as given Parker's overwhelmingly positive initial appraisal of the vintage now confirmed, prices have only gone up on the most coveted (i.e., highly rated) wines.
This is a perverse market situation -- enabled by the dominance of one single critic and the asymmetrical dissemination of information -- in which Robert Parker's paid subscribers -- of which I am one -- essentially subsidize those in the trade, to their own financial detriment.
While these market trends have been with us for a while now, the 2005 vintage in France has created a perfect storm, where "vintage of the century" reviews and ratings, increased worldwide demand, and a weakened dollar, have all combined to price out many ordinary consumers from wines they have annually bought, cellared, and enjoyed.
This is an unfortunate situation, but the reality of today's wine world is so driven and defined by reviews, points, and stratospheric prices that consumers can only ignore these issues at their own peril.