Founded by the late Daniel Rogov, focusing primarily on wines that are either kosher or Israeli.
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David Raccah

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Re: Israel as an Exceptional Wine Producing Country?

by David Raccah » Mon May 07, 2012 9:53 pm

WOW! That is high praise coming from you Craig. I was going to add that I was speaking with a person who is tasting non-kosher (not only you Craig :D ), and not me, and he said, once he tasted non-kosher, it was hard to go back :lol:

The sad thing, MYSELF especially, is that I have ZERO calibration. I know, or I think I know what is good in the kosher market. But what I may call an A- may well barely be a B+ in the non-kosher world. This is my problem and one I admit to openly. To be honest, early on, I calibrated much of my scoring to what Rogov and others scored, and then I applied my opinion and from there have taken the scoring without calibration. However, I have no real 5 pound weight to always calibrate against.

It is scary when no one scores almost ANY wine from Yarden highly, in the mainstream press. Many love Castel and Yatir, and I think it is because of Yarden's over ripe fruit. However, what is needed is more of Castel and Yatir at a lower price and more consistency.

To give credence to Yehoshua, the scores and the wines have improved in the past 7 years, but there is a VERY long road still till the region becomes a consistent QPR producer.

David
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Re: Israel as an Exceptional Wine Producing Country?

by Craig Winchell » Mon May 07, 2012 10:36 pm

You don't think you should be able to get a delicious bottle of wine for $10-$15? The Sara Bee is way under $10. For comparison, I was buying the ubiquitous "blue bottle" Moscato, and not even the Moscato di Asti, for almost $15/bottle here- for Sarah Rivka's Chasanah. The only reason I went for $12+ Borgo Reale Moscato di Asti was that it was available and Sarah Bee wasn't. And it still was significantly less expensive than the Bartenura Moscato here. I ended up going for an Argentine Cab and Merlot at $8/bottle (Terroso ?) because Terrenal wasn't available. Barely drinkable, but still better than the way inexpensive Baron Herzogs (not to be confused with the higher quality Herzog wines, some of which are excellent). I don't buy other producers' wines normally, but I needed mevushal and lots of it. And you see, my daughter insisted on Moscato for the womens' side (yes, the choson and kalah insisted on gender-segregation for more than just the dancing). Anyway, I know if it were nonkosher, I could have found plenty under $10 that was excellent, and I really mean excellent. Because Australia is in trouble, because wineries are closing out the previous vintage and giving deals so they can start selling the new wine for more. And because the savings is passed on to the consumer (something almost unheard of in the kosher world). and because wineries routinely get in trouble and go out of business. And because wineries make more than they need when times are good, and sell the bulk into a robust market for 3rd party marketers to blend and bottle, or buy shiners and label them. There are wines from great wineries but anonymous because they are unknown second and third labels, or sold off in bulk because of a particularly robust harvest of wine that is used only partially in a blend, and is needed no longer.
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Re: Israel as an Exceptional Wine Producing Country?

by Joshua London » Mon May 07, 2012 11:48 pm

Craig Winchell wrote:Let's see more in that price and deliciousness range, dry red, and I will be happy.

Absolutely! I'm tired of everything being priced for the Jewish upper middle classes of New York and New Jersey.

Per David Raccah's point, in another thread Craig astutely suggested that perhaps Israel would do better to have individual winemakers/estates establish themselves, much the way Serge Hochar of Chateau Musar, in Lebanon, has managed to turn his wine into an internationally acclaimed legend. With a handful of such acclaimed wineries dotting Israel's various wine regions, assuming such a thing can be accomplished, then perhaps this will offer something more real for a "brand Israel" to be built around, or on, or behind.
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Re: Israel as an Exceptional Wine Producing Country?

by Joshua London » Tue May 08, 2012 1:26 am

David Raccah wrote:The sad thing, MYSELF especially, is that I have ZERO calibration. I know, or I think I know what is good in the kosher market. But what I may call an A- may well barely be a B+ in the non-kosher world. This is my problem and one I admit to openly. To be honest, early on, I calibrated much of my scoring to what Rogov and others scored, and then I applied my opinion and from there have taken the scoring without calibration. However, I have no real 5 pound weight to always calibrate against....the scores and the wines have improved in the past 7 years, but there is a VERY long road still till the region becomes a consistent QPR producer.


I don't know. I think it ephemeral, or at least problematic, to focus on wine scores as some sort of objective reality. QPR has an objective side to it in terms of a financial bottom line (the "P"), but a large part of this is subjective too (the "Q" and thus the evaluation of the "R"). If you like something and are satisfied that the price is worthwhile or even really good, of what importance is it, really, whether or not others agree or not. There is no accounting for taste.

I agree that "calibration" has a certain highly subjective function, but less by way of validation and more by way of guesstimating a "deal" for which one can not otherwise directly assess the goods.

Rogov's scores and notes and drinking windows, for example, were a moderately useful calibration point for me, personally, in so far as his scores offered more or less consistent tasting parameters across a wide and diverse spectrum of wines, and I was generally confident that I knew what he was looking for as compared to what I look for, and could adapt accordingly to guesstimate whether or not any particular wine was worth buying -- and I could of course validate my own read of his reviews based on my own later evaluations. We didn't often agree on all sort of things, but I learned how to put my finger on those differences in way that was useful to me. so over time, his reviews became practically useful to me in guiding some of my own buying decisions whenever I had to act fast to pick-up a good deal on a wine that I did not otherwise have sufficient time to evaluate myself. I only occasionally came up short using this method (augmented whenever possible by the evaluations of other folks whose judgments I put some stock in).

When it comes to judging against the larger wine-world, I suppose that I have some very, very slight advantage over some of my immediate friends, in that, as someone who writes regularly about wines and spirits, I'm afforded many opportunities to taste and sample all across the spectrum. Additionally, though I use it rather sparingly for the most part, I have a heter from my rav to taste (sip, spit, wash mouth out, etc.) non-kosher wines. I really only find it a useful point of comparison in certain limited respects.
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Gabriel Geller

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Re: Israel as an Exceptional Wine Producing Country?

by Gabriel Geller » Tue May 08, 2012 9:08 am

This QPR discussion is really becoming interesting, and I'd like to thank Joshua for his participation as if I got that correct, he's "back with us" after a fairly long absence and I'm happy to debate with a forumite I didn't "know" before and to see that we all clearly have something to say about it. For the instance, while I've been a member of the forum for over 2 years, I became an active participating member just a few days before Rogov's passing, something I regret btw.

I've had several opportunities to discuss the matter (quality of Israeli wine, prices etc. regardless of kashrut) with a handful of people, jews and non-jews, israeli and foreigners, all non-kosher drinkers.

Among them, people from the USA, France, UK, Japan, Argentina, China (!) and Russia. I always try to chat with the nicer people checking out the shop and buying wine and without necessarily thinking about the risk to ask these questions: What do you think of Israeli wine in general? How do you think it compares to France, California or Italy? and Why do you buy such wine and not french or italian non-kosher wine which is cheaper most of the time?

While many people answer that they liked very much a few israeli wines and want to try more, other often say also because it's simply out of curiosity. Like that famous french artist who purchased a bottle of Yarden Blanc de Blancs because he was curious to taste and I quote (and translate :lol: ) "a champagne made in Israel".

But the most interesting answer, something which was referred to if I recall right by Yoel A (sorry, I'm too lazy today to double-check his post...) and the most repeated one in general to all the above mentioned questions is that they are buying Israeli wine because it's interesting, because it's different, because of Israel's history in general and wine history in particular, because of the controversy over Israel in general and the territories in particular, because they would impress their friends and guests by serving such a "strange" finding as they sometimes perceive Israeli wine.

Most people have an opinion about Israel whether it's coming from hatred, love or intellectual interest. These opinions then usually reflect on the people's perception of what they buy and why.

While in the USA the majority of people are not that passionate about Israel unlike those from Europe, I've lived there at least long enough to state that, having worked in a hotel and met with people from the 50 states as well as people from dozens of countries, when people like wine and aren't boycotting israeli products, they will buy israeli wine not necessarily to support the country or because it's QPR or incredibly good nor any of the related reasons but to have something different. They are not looking nor expecting to be blown away by a wine that would be better than a french Chateau Lafite, Krug, Louis Roederer Crystal, or CA Opus One, Colgin or Screaming Eagle, but to be able to say "I have in my cellar" or "I drink" "different wines, wines from all over the world and from special places", like Israel and that is regardless of it being solely based on a taste and quality basis in comparison with a cheaper french or italian wine of better or equal quality.

Best,

GG
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Re: Israel as an Exceptional Wine Producing Country?

by Joshua London » Tue May 08, 2012 9:33 am

Hi Gabriel,

What you say makes sense, and I have heard, in passing, similar rationales from wine-drinking folks before. All well and good. Question that strikes me, and I presume that since you have a wine shop you have a better sense of this than I, but is such casual curiosity sufficient to pay the rent?

Can the industry bank on such curiosity filling whatever void remains between the Kosher/Israeli/pro-Israel motivated consumer and the financial bottom line? Is this sufficient over time? What about new or prospective entrants to the market? How does it look to prospective capital investment? How many Israeli wineries can be sustained on such a formula?

I'm asking you, obviously, in response to your post, but this question is also "out there" for everyone. What do folks think?

All best,
Josh
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Re: Israel as an Exceptional Wine Producing Country?

by Jonathan K » Tue May 08, 2012 10:12 am

Is Israel capable of mass producing quality inexpensive wine?
I know that over the past few years my kosher cellar has gone from 80% Israeli to about 80% non-Israeli as the quality and selection of domestic wine has improved on both the high end and the low end, and Israeli qpr has gotten worse(yes Yehoshua there are notable exceptions)
Even the above-maligned Baron Herzog wines have gotten much much better. Craig -if you haven't tried the Zin lately it is worth a go. The Chard is very comparable in price and quality to the non-kosher and extremely abundant Kendall-Jackson, although I have admittedly never tried them side by side.
I think the Israeli wine industry is at a crossroads. If they can improve QPR and come up with something distinctly Israeli(carignan perhaps?) there may be a bright future. Otherwise, the industry may even see a drop in their kosher market as alternatives improve.
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Re: Israel as an Exceptional Wine Producing Country?

by Isaac C » Tue May 08, 2012 10:32 am

Gabriel,

Basically you're saying that the non-kosher consumers you have come across that buy Israeli wines buy it as a novelty? There's no way that will have a big enough impact on the market. At the end of the day, though there may be various theoretical reasons why people would or would not buy Israeli wines, I think there is only one reason that there is not enough demand for Israeli wines and that is price. As many of us have already stated, the QPR is way off on the vast majority of Israeli wines.

I know Yehoshua mentioned some highly rated wines with reasonable prices but to be honest I don't think those prices are reasonable when compared to the non-kosher market. As Craig said, there are many amazing non-kosher wines to be had in the $10-$15 range, and there are many deals/sales as well. I don't see how Israeli can compete with the non-kosher market unless they figured out a way to sell their wines for a fraction of the price the currently sell for. Just think of all the high-end Israeli wines that are $60 - $100+ - so many of them are not even great wines, and even the ones that are are so insanely expensive, I think a consumer who drinks non-kosher wines would either have to be an idiot to buy these wines or would have to be someone who does not care about money at all.

Bottom line - there is a very short list of Israeli wines that are actually good values when compared to the non-kosher market and one can probably debate the QPR on those as well once you are comparing to non-kosher wines. So something drastic has to change if the Israeli wine industry wants to gain a strong presence in the international, non-kosher wine market.
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Re: Israel as an Exceptional Wine Producing Country?

by Gabriel Geller » Tue May 08, 2012 10:35 am

Well Joshua, excellent question that I actually keep asking myself and discuss about very often with the local winemakers and wineries people. Frankly I don't know, with so many wineries popping out of nowhere non-stop for the past 10-15 years this should be a good sign, but is it really? But with about 40% of the local production going to the export market, and 95% of that solely to the kosher market I tend to be optimistic, and I hope time will prove me correct. With that said I also hope that there will be a price decrease for the sake of everyone's pocket and for the Israeli wineries to be able to compete also on world-wide pricing basis, forget the special character of the wine being made in crazy Israel...

Recently, a few wineries (I won't name here any so my post will not eventually be seen as promoting one winery over any other) have released wines that are gaining popularity for being QPR killers and that, thanks to raving reviews from some local publications and international awards. Those wines were blind-tasted by "professionals" (I don't know them nor their background, experience or education well enough to state what makes them or not considered as professional wine critics) received 90+ scores while being priced at 50-60 shekel (about $14-17) while many of the all-time "Rogov's favorites" priced at 100-300 shekels ($27-81) received scores of 80-85 from the same panel.

I know that some shops (not in my case) having a clientele with some awareness are experiencing the effects to a certain degree but I personally disagree very much with most of the scores there and that regardless of the price tags but again this is just an opinion and I've never claimed whatsoever being a professional critic. With that said many of those (relatively) reasonably-priced wines are indeed very good.

Best,

GG
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Re: Israel as an Exceptional Wine Producing Country?

by David Raccah » Tue May 08, 2012 10:41 am

The further mind blowing aspect is how the non kosher wineries make it in Israel. They do not have he kosher market and they have good competition from the world. The answer - taxes baby! The non kosher, and kosher prices of imported wines to Israel are so high that if you drink non kosher, stay with Israel, because most in Israel are patriotic and more than happy to do so, and they get good wine for the price.

However, once those wines leave the confines of Israel, they will be hard pressed to succeeded. Margalit and vitkin and flam, with good worldwide scoring sold poorly in the states for a good reason, the market is saturated with solid wines for 40 bucks.

So, I think this post has come to a consensus that Israel, if it is to grow its appeal beyond the kosher market, must up it's game and find a way to make a profit and survive while also scoring high on QPR. Curiosity and patriotism does not make or sustain a market, outside of kosher.

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Re: Israel as an Exceptional Wine Producing Country?

by Craig Winchell » Tue May 08, 2012 10:49 am

Unfortunately or fortunately, the average wine quality is getting higher across the board, whether kosher or nonkosher, whether the wine originates from New South Wales, Walla Walla, Fresno, Texas Hill Country, the Ozarks, the English countryside , Brazil , Provence, Israel, or any of a vast number of wine producing areas either traditional or new. It becomes not a matter of production of world class wines, but rather the ability to compete with them locally or in the global marketplace. Every wine producing area should have its local wine drinking population driving the sales, better able to match the quality of wine with their pocketbooks (and while I was writing this, Gabe came out with the figure of 40%/60% local/export, or vice versa, but that seems like hyperbole to me, that the local market is as high even as 40% for Israeli wine, unless things have really changed dramatically and unbelievably since '81, when I was there last) . When one figures the QPR of wine after export, a host of factors complicate matters- cost of transportation, exchange rates and interest rates, where the producers, importers or retailers wish to position the wine relative to others. Higher price has always been looked upon as an indicator of quality. Winery owners have their pride like anyone else, and don't like their peers to be selling their top end wines for higher per-bottle prices, because they feel their wines to be just as good or better. From the consumer's perspective, also, he may be more willing to shell out $100 than $30, because under the circumstances he may feel that others will have a better perception of him, for whatever reason. Israeli wines may on the average be well priced locally, but high in the USA. Or there could be inflated prices locally due to national pride. One thing is certain, however. Wine only costs a certain amount to produce, and it is instructive to treat it initially as a commodity, and assuming quality which can carry the price, basing minimum selling price upon a livable margin. In the export market, however, price must be determined by what it will take to sell the wine in that market. There may be times that it just doesn't pay to export, because the wine will be priced too high unless it is sold by the winery below cost of production, while at other more favorable times, it may be possible to realize spectacular margins. By the same token, the local market may determine that one wine consistently is better than another, and consumers are willing to pay a premium for it. That doesn't always translate to the export market, especially when the wine is competing not only with its next-door neighboring winery, but also that of a winery halfway around the world. Argentina and Chile are producing world-class wines, in the low end. They are also producing them in the high-end. It's pretty difficult to compete with them on the high end, because their currencies are low relative to almost any other, and their economies are depressed. The question is not whether Israeli wines are good, but whether they can sell, and what are the barriers to sales success. I think about this a lot, and I come to the conclusion that the biggest barrier to sales in general is that there is little, but growing domestic market capable of absorbing only a small portion of the Israeli production, so they are dependent upon the US market, where everyone else is competing as well (the largest wine market in the world). And the next barrier to success is pride- of winery owners wanting to position their wines against their Israeli peers, and the wines they perceive as their quality peers on a global level. And the thing which opens up the market is the strong relationship Jews in general and observant Jews in particular have with Israel, and the desire for its prosperity. That relationship does not typically exist in general in the USA.
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Re: Israel as an Exceptional Wine Producing Country?

by Joshua London » Tue May 08, 2012 11:58 am

Maybe the wineries should invest in kiruv organizations -- probably easier and cheaper to expand the number of Jews who drink kosher than to compete globally. :mrgreen:
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Re: Israel as an Exceptional Wine Producing Country?

by Gabriel Geller » Tue May 08, 2012 12:05 pm

Joshua London wrote:Maybe the wineries should invest in kiruv organizations -- probably easier and cheaper to expand the number of Jews who drink kosher than to compete globally. :mrgreen:

Excellent idea! :wink:
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Re: Israel as an Exceptional Wine Producing Country?

by Yossie Horwitz » Tue May 08, 2012 12:57 pm

For the most part, the Israeli wine industry doesn't currently rely on the export market to sell the wines and Gabriel's numbers are on the money: approximately 40% (or less) of Israeli wine is currently exported (there are some tax benefits if a winery hits a certain percentage of its wine being exported to certain countries). The issue is growing the market. Together with growing sophistication among the kosher wine consume (Israel's current main export market) and in anticipation of the [spending] music continuing forever, in recent years Israeli wineries planted a significant number of new vineyards across the country which are coming online, creating an overabundance of grapes/wine which needs a new market to absorb the new wines - hence the recent increased focus on export.

However, the combined factors of the recent recession and the aforementioned increase availability of quality and well-priced kosher wines from around the world other than Israel (starting with Welner's various wines, through some of the Australian and Italian wines [which may not be on par with the Israeli offerings but at 50% of the cost - are sufficiently decent to steal Israeli market share] and including some of the Herzog wines which have greatly improved in quality), Israeli wines aren't selling nearly as well these days as in the past and, as most have indicated here, will need to step up thier game to retain a sizable portion of the kosher export market (in the near-term, I don't view the non-kosher market as a real viable option given production costs).

One additional factor worth keeping in mind. Other than the top wineries [in terms of production], the majority of Israeli wineries are pretty irrelevant to this conversation as they can usually offload thier 2,000-20,000 bottles locally or among the well-heeled kosher consumers at whatever price they desire. For proof, look at many of the smaller boutique wineries producing decent to good wines (and on an inconsistent basis at that) who find enthusiastic buyers for thier wineries at ridiculous prices in excess of $40 a bottle...
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Re: Israel as an Exceptional Wine Producing Country?

by Craig Winchell » Tue May 08, 2012 1:52 pm

Thanks, Yossie. If Gabe is on the money in terms of exporting only 40% of the wine, if 60% is really the domestic figure, Israel is in pretty good shape. It may not be able to absorb the new vineyards that well, but on the other hand can upgrade vineyards and quality, and sell off the remainder at prices approaching cost of production to the export market. That may not guarantee profit for that wine, but will promote market share while ridding Israel of the surplus.
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Re: Israel as an Exceptional Wine Producing Country?

by YoelA » Tue May 08, 2012 4:55 pm

However, once those wines leave the confines of Israel, they will be hard pressed to succeeded. Margalit and vitkin and flam, with good worldwide scoring sold poorly in the states for a good reason, the market is saturated with solid wines for 40 bucks.



Yes, indeed. When we visited Vitkin a few months ago and asked whether they were planning to market in the US, Sharon said probably not in the near term; they were concentrating on the UK and Canada, where their wines are doing well. No matter how good their wines are, they probably would want to price them in the US at say $ 35 and up (based on the Israeli prices), and at this time there a a gazillion (approximately) small wineries and labels in California aimed at that market and they would not be able to compete.
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Re: Israel as an Exceptional Wine Producing Country?

by Stacey B » Tue May 08, 2012 5:08 pm

We visited with Yossi Ashkenazi and his partner Asaf at Ben Zimra winery this past October and they told us the same thing. That it is not cost efficient to ship to the US at this time and they are able sell all of their wine within Israel.
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Re: Israel as an Exceptional Wine Producing Country?

by Daniel Kovnat » Sat May 12, 2012 3:12 am

This has been such a fantastic discussion that I just discovered.

fSo why is it that Israeli wines are priced so high relative to the rest of the world? Are the production costs here so much greater than other countries? We sure do have to pay more for fuel than the U.S. On the other hand, the cost of fuel in France and Italy is the same as ours? Are labor costs higher here? OR is it that the wineries are selling at a higher profit margin and putting more into the bank?

Are shipping costs so high as to make a $25 bottle of wine when sold here cost $35 in the United States?

As long as there are customers willing to pay that high price, there is little reason for the producers to lower their prices. But if, as, and when the supply of wine at the winery builds up because of excessive production or lack of sales, then the price of our Israeli wines will fall and Israel will compete favorably for that customer looking for QPR.
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Re: Israel as an Exceptional Wine Producing Country?

by Yehoshua Werth » Sun May 13, 2012 4:27 pm

Craig Winchell wrote:Unfortunately or fortunately, the average wine quality is getting higher across the board, whether kosher or nonkosher, whether the wine originates from New South Wales, Walla Walla, Fresno, Texas Hill Country, the Ozarks, the English countryside , Brazil , Provence, Israel, or any of a vast number of wine producing areas either traditional or new. It becomes not a matter of production of world class wines, but rather the ability to compete with them locally or in the global marketplace. Every wine producing area should have its local wine drinking population driving the sales, better able to match the quality of wine with their pocketbooks (and while I was writing this, Gabe came out with the figure of 40%/60% local/export, or vice versa, but that seems like hyperbole to me, that the local market is as high even as 40% for Israeli wine, unless things have really changed dramatically and unbelievably since '81, when I was there last) . When one figures the QPR of wine after export, a host of factors complicate matters- cost of transportation, exchange rates and interest rates, where the producers, importers or retailers wish to position the wine relative to others. Higher price has always been looked upon as an indicator of quality. Winery owners have their pride like anyone else, and don't like their peers to be selling their top end wines for higher per-bottle prices, because they feel their wines to be just as good or better. From the consumer's perspective, also, he may be more willing to shell out $100 than $30, because under the circumstances he may feel that others will have a better perception of him, for whatever reason. Israeli wines may on the average be well priced locally, but high in the USA. Or there could be inflated prices locally due to national pride. One thing is certain, however. Wine only costs a certain amount to produce, and it is instructive to treat it initially as a commodity, and assuming quality which can carry the price, basing minimum selling price upon a livable margin. In the export market, however, price must be determined by what it will take to sell the wine in that market. There may be times that it just doesn't pay to export, because the wine will be priced too high unless it is sold by the winery below cost of production, while at other more favorable times, it may be possible to realize spectacular margins. By the same token, the local market may determine that one wine consistently is better than another, and consumers are willing to pay a premium for it. That doesn't always translate to the export market, especially when the wine is competing not only with its next-door neighboring winery, but also that of a winery halfway around the world. Argentina and Chile are producing world-class wines, in the low end. They are also producing them in the high-end. It's pretty difficult to compete with them on the high end, because their currencies are low relative to almost any other, and their economies are depressed. The question is not whether Israeli wines are good, but whether they can sell, and what are the barriers to sales success. I think about this a lot, and I come to the conclusion that the biggest barrier to sales in general is that there is little, but growing domestic market capable of absorbing only a small portion of the Israeli production, so they are dependent upon the US market, where everyone else is competing as well (the largest wine market in the world). And the next barrier to success is pride- of winery owners wanting to position their wines against their Israeli peers, and the wines they perceive as their quality peers on a global level. And the thing which opens up the market is the strong relationship Jews in general and observant Jews in particular have with Israel, and the desire for its prosperity. That relationship does not typically exist in general in the USA.




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Re: Israel as an Exceptional Wine Producing Country?

by Adam N » Thu Jun 28, 2012 7:29 am

Daniel Kovnat wrote:This has been such a fantastic discussion that I just discovered.

fSo why is it that Israeli wines are priced so high relative to the rest of the world? Are the production costs here so much greater than other countries? We sure do have to pay more for fuel than the U.S. On the other hand, the cost of fuel in France and Italy is the same as ours? Are labor costs higher here? OR is it that the wineries are selling at a higher profit margin and putting more into the bank?

Are shipping costs so high as to make a $25 bottle of wine when sold here cost $35 in the United States?

As long as there are customers willing to pay that high price, there is little reason for the producers to lower their prices. But if, as, and when the supply of wine at the winery builds up because of excessive production or lack of sales, then the price of our Israeli wines will fall and Israel will compete favorably for that customer looking for QPR.


Daniel,

Just saw this now. I don't know if you received an answer or even if the question was rhetorical however, I'll answer it assuming it wasn't. Israeli wineries, by international standards are pretty small and all the costs that normally amortize over many bottles are spread over less bottles causing a higher per bottle cost. These costs are ones such as labor,label design, shipping, machinery, ect.....
When it comes to commercially exporting a wine from here to the U.S., the increase from COST price is roughly anywhere from %300 TO %350. i.e. if an importer pays $10 per bottle, because of U.S. 3 tier system, Liq laws, and taxes, expect to see it on the shelf from $29.99 to $34.99.

hope this helps
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Daniel Kovnat

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Re: Israel as an Exceptional Wine Producing Country?

by Daniel Kovnat » Thu Jun 28, 2012 8:04 am

Adam N wrote:Israeli wineries, by international standards are pretty small and all the costs that normally amortize over many bottles are spread over less bottles causing a higher per bottle cost. These costs are ones such as labor,label design, shipping, machinery, ect.....
When it comes to commercially exporting a wine from here to the U.S., the increase from COST price is roughly anywhere from %300 TO %350. i.e. if an importer pays $10 per bottle, because of U.S. 3 tier system, Liq laws, and taxes, expect to see it on the shelf from $29.99 to $34.99.

hope this helps


I read in Wikipedia that the U.S. Three Tier System increases the price of an alcoholic beverage 18% - 25%. This is a far cry from your 300% - 350% increase. I assume that we here in Israel do pay they 16% Value Added Tax that, I would guess, is waived for wine being exported.

Is somebody making big bucks on the American drinker of Israeli wines?

Dan

N.B. This is not a rhetorical question
Come on over to read about my experience tasting wines produced in Israel at http://www.israelwinetaster.com
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Craig Winchell

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Re: Israel as an Exceptional Wine Producing Country?

by Craig Winchell » Thu Jun 28, 2012 4:21 pm

The 3-tier system increases prices to typically over 200% of the FOB cost at a winery. A California winery releases a wine at a retail price of $20/bottle. California wineries pay CA state excise tax, and often deliver the wine directly to retailers. A typical gross margin on sales by a retailer is 33%. Thus, the cost to the retailer is $13.34/bottle, working forward it's a 50% markup, backwards it's a 33% gross margin. Now, consider a California distributor who must also make a profit and sell to the retailer at $13.34/bottle. He purchases the wine for $10/bottle, and takes a 25% gross margin on sales, a 33% markup to $13.34. That's where 200% comes in. Of course, I won't even try to bring restaurants into the discussion, because markups there can be crazy.

Now consider a New York distributor purchasing California wine. On top of that $10 purchase cost of the bottle, he must pay shipping to New York, and New York state excise taxes. His cost basis, therefore, becomes greater than $10, possibly more like $11 or $12 /bottle. Based upon the same markups, that wine would cost at retail $22-$24/bottle (double the $11 or $12 cost basis).

Now consider an importer/distributor. He must pay not only transportation from the winery in whatever country of origination, his cost basis must include any duties, US excise taxes, transportation to his warehouse, excise taxes for the state in which he does business. A $10 bottle will have an even higher actual cost basis than the above example from California, maybe bumping the cost basis up another buck or 2, and the typical retail price would, remember, be 200% of the cost basis.

The Israeli winery (or winery from any other nation) must take all of this into account when initially pricing the wine to the importer/distributor, in order to arrive at a reasonable retail price at which the consumer will feel pleased to purchase the wine. The consumer cares little whether the high price is based upon greed or increased costs of production, only whether the value or distinctiveness is there to justify the cost in his mind. If a producer cannot make a profit, that is not the consumer's concern. If a producer cannot profit from export to a particular country at a price the consumer wishes to spend, that producer should damned well find another market in which too sell the wine, or get out of the business. It's a matter of supply and demand.
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