There is a huge gab between the top and bottom end of the wine market

There is a huge gab between the top and bottom end of the wine market

The world is going through a period of social change, with new political forces gaining ground amid a discontented electorate. Chris Losh says there are striking parallels in the wine world.

Much has been made over the last year of the 'silent majority'; the long-suffering populations who have seen what they believed in eroded, their jobs moved abroad and workplaces closed, their standard of living on a seemingly endless downward curve. That it's a global phenomenon is not in doubt: The quotes from supporters of Trump, Brexit, Marine Le Pen, Geert Wilders and the Five Star Movement are all-but interchangeable - a collective howl of frustration at barely getting by, at seeing no future, at being ignored...

I was reminded of this the other week when talking to a South African winery owner about his reduced crop for 2017. "Prices will go up," he said. "Cape farmers need more for their grapes."

This, though, might not just be the small adjustment of a few percent here or there to counter an undersized vintage. Farmers are calling for a double-digit shift to counter what they see as years of underpayment.

Inflation in South Africa is running at around 6% a year, but grape prices have increased just 10% over the last decade. Farmers, who have had to swallow the difference, are now barely covering their costs and something, clearly, has to give.

"I predict prices going up 30-50% in the next three years," said the winemaker bullishly. "It has to happen or people will farm themselves out of business. The prices are outrageously wrong."

People working hard for no return? Feeling used and underappreciated? Demanding a tectonic shift in the order of things? Some of this might be sounding familiar.

The problem in South Africa (unlike, say, Bordeaux) is that grapes face lucrative competition. Last time I was in the Swartland, viticulturist Rosa Kruger told me that the biggest threat to grape growing in the region was citrus fruit, which yielded the farmer seven times as much.

Some farmers in Elgin, meanwhile, are pulling up vineyards to replant with apples. It's hard to blame them when one hectare of grapes will bring in around R50,000 (US$3,600), one fifth the return of apples. But it is, nonetheless, a sad reflection on the marketability of a region that was being heralded as The Great Cool Climate Hope less than 20 years ago.

This isn't a problem that's unique to the Cape, however - nothing like.

One of the striking elements of the recent fires in Chile was that some of the worst affected vineyards were seriously old. While the press lamented the loss of century-old vines, the harsh truth is that the reason they were so badly affected was because the vineyards were largely untended, and overrun with grass. Centenarian vines they might have been, but the owners still didn't get enough of a premium for this old-vine fruit to make it worth their while farming them.

You could argue that there are mitigating circumstances here. Chile's wineries, for instance, are nearly all located north of Bio Bio to avoid this notoriously earthquake-prone area, leading to a disconnect between the (mostly poor) farmers who grow the grapes in the southern valleys and the (wealthier) wineries who buy the fruit and sell the wine. But the end result is potentially good wine not being made because, like the Cape, it's simply not financially viable.

I mentioned this situation to growers in both the Barossa and the South of France, and they were surprised. Both felt that if you have access to old vine fruit you should be able to sell it at a premium. The market, however, doesn't lie. Bottles of old-vine Chilean Carignan for US$20 might be great value, but the growers, clearly, aren't getting rich on the back of it.

This unwillingness to pay the worth of a bottle is, of course, hardly a post-Brexit phenomenon.

Back in 1995, I remember going to a talk by Jancis Robinson MW in London, in which she spoke of the need to break free of the "tyranny of the GBP5 price point". The average price of a bottle of wine in the UK is currently around GBP5.50 (US$6.90), with pretty much all of the increases of the last two decades accounted for by duty.

Far from breaking free, the industry seems as shackled as ever. One current importer remembers selling one big Australian brand for GBP8.99 a few years back. Today, it's GBP5.

Some of this is simple supply and demand, some of it is the power of big business, and some of it is the well-documented failure of the industry to trade consumers up when they had money and wine was fashionable.

Now that economies are flat-lining and wine is less cool than beer, products are mired at price-points that are so unrealistically low that they are threatening to cut the foundations out from the industry.

Of course, if you look at the upper end of the wine world, things look peachy. If you're getting $6,000-30,000 for a tonne of Napa Cabernet, selling your vineyard for EUR1m a hectare in Champagne, or watching the price of your Grand Cru Burgundy (or first growth Claret) heading relentlessly northwards, you probably feel quite happy with life.

But the Muscadet growers who can barely give their land away at EUR7,500 per hectare, or the Bordeaux producers selling their juice for EUR2 per litre must look to their countrymen (or even their near neighbours) and wonder just what they did wrong in life to be quite so far away from such stupendous wealth.

Last week was the start of en primeur time in Bordeaux and soon we will see the top chateaux releasing bottles for hundreds of Euros. Yet last month, Carrefour made headlines for selling Bordeaux rouge for under EUR1 a bottle.

I'm wondering whether there's ever been quite such a vast gap between the sheer 'pick a number and double it' madness of the pricing for top end wines and the destitution-inducing meanness inflicted on those at the bottom; between the unseemly rush to pay anything for the best, and the aggressive cavilling over the ninth part of a hair for the more workaday.

It is, at least, of a piece with economic trends the world over. But as the rich get richer and the poor get poorer, how long, I wonder, can it be before wine faces its own version of Brexit or the Trumpocalypse?