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Why wine appellations are nowadays outdated

September 19, 2016 Tags: 1 comments
Wine appellations are nowadays outdated, appellations are the reasons Lidl sells Chianti at £3.99 and our Chianti retails at £11.49 and for the average drinker, they are exactly the same wine sold at different prices. Appellations are also outdated because wine drinkers want to know what makes the wine, what the grape or grapes are.

A couple of days ago, I found on my Facebook profile a post from Robert Joseph, a wine writer, about appellations entitled “The nonsense of appellations. Smartly labeled DOCG Chianti at £3.99 in Lidl” in which he blames the concept of appellations, the discussion that generated from it, only visible to us and our friends, however, made me sitting on my computer and write my thoughts on the subject, I had already touched it on previous posts on recently created new Italian wine appellations.

I could not agree more than creating a new appellation now, it is useless and expensive and the same resources could be more profitably invested in promoting the wines and the wineries involved, however, appellations that are already established and we are familiar with, for me are brands, like Coke or Nike, and can be powerful brands if administered as such but like all brands, their value diminishes if not.

Until about 20 years ago, wine was either an Italian or a French affair, with Spain taking a bite, but now, wine is a worldwide business and while the new worlds does not have the traditions Italian and French and Spanish have, where wine is much more than just a products, these countries have transformed wine into a commodity. Merlot, Chardonnay or Sauvignon Blanc are just like commodities and people buy commodities based on their price, the cheaper the better, there is no substantial difference between wineries that justify a premium, with a very few exceptions, and the price is the only benchmark.

The classic example is chardonnay, until 6 or 7 years the most sold white wine in the UK, due to the over oaking of some supermarket’s version used to cover poor quality grapes, ageing or oaking is a good way of doing so, is currently the least drunk wine with many people just steering off the grape altogether. Funnily enough, most of the same wine drinkers love Chablis, a French white wine made with Chardonnay. The same people that used to love Chardonnay, they now drink cheap Pinot Grigio because contrary to oaked chardonnay, when Pinot Grigio is drunk at 4 degrees, like the majority of drinkers like it, it has no flavour at all, it is just like drinking cold water: wine drinkers have replaced one commodity with another.

I used the chardonnay example because Italy or France or Spain or any other country that has appellations has something that no other country has, however, it is up to those countries to look after them and make it highly profitable for wineries. Another example, and the same used in Robert’s post, is Chianti. Chianti is a fantastic wine when properly made, can offer outstanding value for money, however, for the average wine drinker, it is the cheap wine that used to come in a flask and now comes in a bottle. Whose fault that is, the consortium managing the appellation or the individual wine maker, who did not understand that Chianti needed to move away from the flask and being presented as a proper wine? There was a time for the flask, that time is now long gone.

Wine makers cannot be blamed for the flask, most of the times, wineries owners are farmers, they know how to grow grapes, but rarely know and understand than selling wine is more than just making it, but the consortiums, yes, they are the ones to blame. Using the Chianti example, why the consortium has not created a rule preventing winemakers to use the flask? When visiting Florence or Tuscany in general, shops still sell plenty of flasks with cheap Chianti on it for tourists to buy that when drunk once at home, taste of vinegar. If the consortium allows this to happen, then they cannot expect that the same tourists at home will spend their hard earned money to buy a bottle of vinegar.

Italy is full of appellations, way too many, probably some of them could be written off and are worthless, but appellations like Chianti or Barolo or Brunello di Montalcino and many more are priceless, no other country can produce a Chianti or a Barolo or a Brunello di Montalcino, they can all make a Sangiovese or Nebbiolo, however, their brand has been diluted by short sighting by the Consortiums that were meant to protect them and it is wrong to blame the producers, most of them have never heard of marketing or branding, and only know how to make wine, they’ve been making it all their lives and their ancestors before them.

The Italian wine industry is mainly made of small wineries, the majority of which do not have the knowledge and resources to create a brand. In today’s world, to create a brand, independently of the product, the first requirement is big financial resources and long term planning, and Italian wineries due to the lack of skills and the necessity to make space in the tanks for the next vintage, never thought of their appellation or winery as a brand, but just as a business making and selling wine, and unfortunately, the world is full of companies ready to exploit it.

When appellations were created, together with the consortiums to run them, their intentions were to ensure the quality of the wine bottled and sold, but it never worked, the legislation behind them has never been updated to include the changes in the industry and consumers’ behaviour. Consortiums, often politically managed and lacking skills, are made of big and small wineries, pro and against the flask, they all sit on the same table trying to agree on a decision, with the only results of not being able to take any.

Appellations are brands, but a brand is only worth something when it justifies a premium on the eyes of the consumers, otherwise it is worthless. Currently, Italian appellations are worth little and until a change in the way consortiums are run and a change in the way the different appellations are granted, nothing will ever change, and gradually Italian appellations will be worthless.

Creating a new appellation now is stupid and too costly, and will only create additional costs for the wineries that will need to pay for the Consortium, but not looking after the ones we already have is a big mistake as well.

To understand a bit more about how the appellation system in Italy works read our wine and grape guide
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Marco Pierre
MARCO 09/20/2016 14:26 PM

Great article Andrea! Truly informative and I agree about the nonsense of appellations.