Letters: On New Zealand

First, he makes a strong statement that New Zealand Pinot Noir makers are making massive returns. Even in New Zealand, Pinot Noir is known as the heartbreak grape, not just because of its winemaking sensibilities, but also because you are essentially making it for love not money. A high-quality, intensively planted Pinot Noir vineyard in New Zealand today costs more than $200,000 per hectare to develop, and annual running costs average in the order of $18,000/ha. Average yields for high-quality Pinot Noir in Martinborough or Central Otago are little more than 5.5 tonnes/ha, or 33hl/ha. In 2005 these yields were more like 15hl/ha! The cost per case just for high-quality Pinot Noir grapes can be over NZ$100 per case. Winemaking costs and the cost of French oak add about $60, and a two-year interest bill on the money for operating costs before any money comes back adds about $18, bringing the total cost per case, including cost of money in funding the vineyard, to close to $180. A 20 Pinot Noir nets about $250 to the producer after all the taxes and margins are involved. So, that leaves less than $70 per case to fund administration, sales, marketing and public relations. The final net profit on a case of 20 Pinot Noir for the producer is less than 5% - less than the cost of money. These numbers are why most Pinot Noir producers supplement their income and cash flow with aromatic white wines such as Sauvignon Blanc and Pinot Gris, which are much more consistent and higher-yielding varieties. They make Pinot Noir for love and the prestige that a powerful reputation for Pinot Noir can have on the whole brand. These producers of ultra-premium Pinot Noir will become successful financially when the demand and reputation for their wines makes them worth 30, not 20! While the market will always decide the true value of any wine, Mr Skelton should save his criticism of grossly exaggerated financial returns until he is aware of the real facts.

My second point is to the MWs being spooked' ( it normally is the other way!) by the supposed hydroponics' of the Gimblett Gravels. Frankly, I am sick of the Gimblett Gravels being referred to as growing hydroponically, which by Oxford definition is without soil'. There is plenty enough soil for us to be able to grow grapes with very little added fertiliser, and a vine will use as much water here as anywhere else with the same temperatures. We grow grapes in soil with rocks in it - not hydroponically! Tannin management is an issue that we learn from in every vintage, in both the vineyard and winery; giant strides are being made. And believe me, a 10-year vertical of the modern Gimblett Gravels wines (from 2001 onwards) will open some eyes in, say, 2012. The tannins do soften, and in my view, wines should be judged as to their balance and potential greatness when drinking at their peak, which for these wines must be at a decade old. Our job as winemakers is to make that judgment with young unfined and unfinished wines, and the wines in the bottle will speak for themselves.

Enough said - except for me to add that I have a vested interest. We make Pinot Noir for love now but hope that it comes with a suitable dowry if love prevails and we make Merlot and Cabernet Franc in the Gimblett Gravels, which I happen to believe will prove, while I am still of sound mind and body (some say senility has already set in!), to be a world-class region for making blended red wines based on Merlot, Cabernet Franc and Malbec.



Steve Smith MW

MD, Craggy Range Vineyards





Skelton responds

I welcome fellow MW Steve Smith's comments on my article. Financial returns are always difficult to calculate

and, in my experience, can be manipulated to illustrate whatever side of the argument one happens to be on. As Steve admits, he has a vested interest. If Steve is correct, and the final net profit on a 20 NZ Pinot Noir is less than 5% - less than the cost of money', the question is: why have so many growers, winemakers and (presumably astute) businesspeople piled into planting Pinot Noir? Are they that financially illiterate? Do they all have access to unlimited, interest-free funds? I would like to know the answer.

On the other matter of the hydroponics' of the Gimblett Gravels. I actually said that the growing conditions were about as close to hydroponics as you can get', and of course

I understand the mechanics of soilless agriculture. I only said that it spooked some of the MWs - those perhaps who have rose-tinted ideas about beautiful vineyard soils, reeking of humus and goodness, and teeming with bacterial life and worms!

If Steve's answer to the tannin problem of some of his wines is to wait for 10 years and drink them at a decade old', then I fear his financial model is going to need a major overhaul. Apart from a very few well-known wine-growing regions that have gained a reputation for wines that will not only age for 10 years plus but also - perhaps more importantly - gain in value over that period, most wine consumers expect red wines to be approachable in a year or two and drinkable within five. To establish a wine business on the basis that one's wines need 10 years to be at their peak is a luxury surely few growers can afford?

Having spent more than 30 years growing grapes and making wine in a region even less climatically favourable than New Zealand (England!), and one where financial returns are also very variable, I know that the time frame for getting things right in viticulture and winemaking can be heartbreakingly long. I really like New Zealand wines - both red and white - and I know that the world of wine is a better place for them. I wish Steve and his fellow winemakers good luck for the future.



Stephen Skelton MW