Breaking news!

[DRT]

Here I said:

I've missed this story completely, as well as the more recent story here about violence in Regua and the dismissal of the IVDP President last week.

Any objections to moving these out of MD, and also posting on FTLOP?

The port-drinking world needs to know about such things!!

"this story" is to be found here.

The very thought of violent protest connected with the port trade is astonishing in the age we live in, but it has at least one precedent.

This is very sad.

[uncle tom]

When I saw the beneficio figure for this year, it seemed terribly low; so I'm not surprised there was anger.

It seems unclear whether this reflected poor sales, the release of old Casa stocks - or a bit of both..

The IVDP publish detailed sales data for port sales, but only the latest figures. Does anyone have any historic graphs of the sales figures?

Tom

[Andy Velebil]

When I saw the beneficio figure for this year, it seemed terribly low; so I'm not surprised there was anger.

It seems unclear whether this reflected poor sales, the release of old Casa stocks - or a bit of both..

The IVDP publish detailed sales data for port sales, but only the latest figures. Does anyone have any historic graphs of the sales figures?

Tom

From what I've gathered it's a combination of lower sales of Port, recent years of overproduction of Port, and about 8 million Euro's which the Portuguese Gov't has taken (dare I say stolen?) from the IVDP.

[JacobH]

It's interesting that the anger was directed at the IVDP and not the shippers or any other bodies that are involved in Port production. Although we often hear complaints from the shippers about how the IVDP works, this is the first clear indication that the farmers see it as a problem, too, I have seen for some time. (Of course, I am sure the situation is different if you live in Portugal or visit the Douro on a much more regular basis).

Perhaps we should stop drinking SQVP (since most SQVP is made from shipper-owned Quintas) for a while to support the smaller farmers?

[DRT]

Perhaps we should stop drinking SQVP (since most SQVP is made from shipper-owned Quintas) for a while to support the smaller farmers?

Interesting idea, but I'm not sure it would solve the problem. The juice that the small farmers produce is most likely to be the stuff that ends up in mass-market ruby and tawny, not in premium ports. The exception to this would be independent farmers tied to the big shippers over many decades who supply them with components to their premium wines. But I have a feeling those farmers will be looked after by their single customer so probably are not the main part of the problem.

I suspect that the farmers most affected by all of this are those who do their own thing all year (with zero investment and similar technology to what they had a century ago) and then sell their grapes to the nearest co-operative to turn into the sort of port of port none of us here ever drink. Stopping drinking SQVP in an attempt to improve the lives of those guys would be a bit like trying to help the people who make fish fingers by not eating caviar

[JacobH]

Perhaps we should stop drinking SQVP (since most SQVP is made from shipper-owned Quintas) for a while to support the smaller farmers?

Interesting idea, but I'm not sure it would solve the problem. The juice that the small farmers produce is most likely to be the stuff that ends up in mass-market ruby and tawny, not in premium ports. The exception to this would be independent farmers tied to the big shippers over many decades who supply them with components to their premium wines. But I have a feeling those farmers will be looked after by their single customer so probably are not the main part of the problem.

I suspect that the farmers most affected by all of this are those who do their own thing all year (with zero investment and similar technology to what they had a century ago) and then sell their grapes to the nearest co-operative to turn into the sort of port of port none of us here ever drink. Stopping drinking SQVP in an attempt to improve the lives of those guys would be a bit like trying to help the people who make fish fingers by not eating caviar

I was originally going to suggest stopping drinking the premium Ports on that basis! But I hadn't thought that the independent quintas which are used to make the better VP might be the least likely to be affected.

That said, I've seen Ports such as Réccua Ruby for sale in London, which is made by a Regua-based co-operative, so I am sure there are other brands available that are made out of these farmer's grapes, even if it would be more symbolic than anything else (or tokenistic, depending on your point of view...).

[uncle tom]

Perhaps we should stop drinking SQVP (since most SQVP is made from shipper-owned Quintas) for a while to support the smaller farmers?

Although the obligation to market ports via the Gaia shippers ended 25 years ago, I believe the great majority of port is still shipped in much the same manner, and that direct sales from quinta owners and the co-operatives are the exception rather than the rule.

Consumer tactics are therefore likely to have a neglible impact, especially when you consider that the amount of port drunk by those of us who actively participate in forums such as this, and could be contacted with a view to participating in such a campaign, is probably less than one bottle in 10,000 !

Part of the solution to the current malaise is for the IVDP to get off its backside and start taking its duties to promote port a lot more seriously. The UK is one of the largest markets for port, especially for the premium products; yet I can't recall any industry wide promotion of port in this country - only adverts and promotions for specific products.

- Possible slogans?

"Drinka pinta port a day"

"A port a day helps you work, rest and play"

"Port is GOOD for you"

"Every little helps"

And a little more seriously perhaps, stop kow-towing to the medical misery-makers, and highlight the fact that medical advice regarding safe alcohol intake has absolutely no scientific basis, and was based on nothing more than inspired guesswork...

Tom

[Glenn E.]

And a little more seriously perhaps, stop kow-towing to the medical misery-makers, and highlight the fact that medical advice regarding safe alcohol intake has absolutely no scientific basis, and was based on nothing more than inspired guesswork...

I don't think you want to go down that road.

The guesswork was in determining a maximum safe level of alcohol consumption. Overconsumption of alchol is and was known to be unsafe. Since a safe level is not known, the logical response is to ban all consumption of alcohol until a safe level of consumption can be properly determined.

[g-man]

And a little more seriously perhaps, stop kow-towing to the medical misery-makers, and highlight the fact that medical advice regarding safe alcohol intake has absolutely no scientific basis, and was based on nothing more than inspired guesswork...

I don't think you want to go down that road.

The guesswork was in determining a maximum safe level of alcohol consumption. Overconsumption of alchol is and was known to be unsafe. Since a safe level is not known, the logical response is to ban all consumption of alcohol until a safe level of consumption can be properly determined.

I thought we's in Americas here.

SMALLER GOVT!

[jdaw1]

There is no evidence that old alcohol does any harm. Yes, if you feed rodents freshly-made German industrial alcohol, they become unhappy rodents. Have a Nobel Prize in Biology. But there is no experimental evidence, nor epidemiological evidence, that alcohol over 25 years old does any harm. Why not say that.

Perhaps even pay some egg-heads to test it. Have three sets of rodents. feed them boring food, and: 1, freshly-made German industrial alcohol; 2, properly-decanted Graham 1985; and 3, no alcohol at all. Group 2 may well do best.

[DRT]

Perhaps even pay some egg-heads to test it. Have three sets of rodents. feed them boring food, and: 1, freshly-made German industrial alcohol; 2, properly-decanted Graham 1985; and 3, no alcohol at all. Group 2 may well do best.

I am willing to volunteer to be a member of the control group who are made to survive on medium-rare beef and Croft 1945.

[Glenn E.]

Perhaps even pay some egg-heads to test it. Have three sets of rodents. feed them boring food, and: 1, freshly-made German industrial alcohol; 2, properly-decanted Graham 1985; and 3, no alcohol at all. Group 2 may well do best.

If the boring food could be upgraded to steaks, I would volunteer to be part of group 2.

Ah... screw it. I'll be part of group 2 even if the food is boring.

[Roy Hersh]

The Beneficio System is broken. It needs to be fixed.

The IVDP is responsible for its governance. They deserve(d) the blame.

Andy's quip about the IVDP's, "about 8 million Euro's which the Portuguese Gov't has taken (dare I say stolen?) from the IVDP" -- is misguided. Truth be told ... and when it comes to this particular discussion point, the talk is solely couched in hushed corners of the Port trade ...
The money was being stockpiled by the IVDP in a "war chest" that should have been spent on promoting Port worldwide. Unfortunately, the recently terminated President of the IVDP did NOT spend the money (whether directed by the Minister of Ag as some suggest, or not) which made it easy for the Portuguese gov't able to abscond with the funds WITHOUT informing the Port trade, or even providing an explanation to them after the fact. This is absolutely criminal ... (literally) but likely ... little will be done at this point.

There's a reason why a few producers have chosen to move away from applying for the IVDP's Selo da Garantia for their Douro wines (NOT Port though, as of yet) and opting for DOC labeling on the back of their bottles instead ... for those that take notice of such things. It is lately and I've been informed that this choice is due to subtle protestation or a quiet revolt against paying money for Selo's that was supposed to be used to fund the IVDP's promotional efforts that instead wound up in the aforementioned "war chest."

But the broken Beneficio rights issue goes MUCH deeper than the Selo - IVDP monies. This is one of the most challenging issues facing the Duriense and has been for some time, yet it continues to be ignored, or at least dealt with in any real sense by the regulators or the Port trade itself. An informed exposé of this topic badly needs to be written.

[DRT]

An informed exposé of this topic badly needs to be written.

Feel free to post it here, Roy

Thanks for the information. Very interesting about the use of back labels for Douro DOC wines as the story I have always been given is that it was just the new way of doing it.

I must confess that I do not understand enough about the Beneficio or the financial goings on at the IVDP to give any useful comment but would be very interested to learn more about it as it is obviously a highly important and emotive issue.

[Roy Hersh]

Derek,

I cannot be sure that what I was told about the Douro wine labels, is in fact true, as I will admit the individual who provided this info (a well known Port shipper) is no fan of the current Beneficio system.

That said, the financial ramifications of the Lei de Terco as well as the Beneficio rights, are badly mis-understood by the masses of Port lovers.

For many years, when I've read people's posts about how the Port trade is making so much money and charging too much for their latest VP releases, I just shake my head and say nothing, realizing that it is sheer ignorance, (I say that in the kindest sense ... as in "uninformed" not meaning stupid) and that these Port lovers think that all that goes into it is the cost of the juice, the label/cork/bottle etc. That is SO FAR from reality it is ridiculous.

Just for example, if a Port producer wants to increase their sales by volume the following year by 10%, they will have to increase their production by 30% to do so and then have to hold back 2/3 of that increase. The exhorbitant carrying costs of doing so are outrageous but nobody ever thinks of things like this. I can give MANY other examples, but why bother. People will never care what the realities are of pricing when it comes to Port; they're only thought is: how does the price affect my ability to purchase the Port ... or not. I do understand that way of thinking, but it leaves out so much of the bigger picture.

The Beneficio topic is worthy of a book, but changing the system would take so much cooperation from all parties, that it is very unlikely it will happen in our lifetimes. Blowing up the system is clearly NOT the answer. Fixing it the right way, slowly and thoroughly by creating an inter-organizational committee to work on this is likely the only way, yet very sadly ... I don't see this happening. All sides are losing in the mean time and the fate of some of the great people in the Douro, is hanging by a very thin thread.

There's a reason why there was the violent reaction to the drop in the Beneficio from 110,000 pipes in 2010 to 85,000 in 2011. It was NOT a mistake to lower the Beneficio this year ... in fact, it was a sad, but very necessary move. However, raising the bar from 100,000 pipes to 110,000 pipes in 2010 was not only a terrible decision by the recently departed head of the IVDP, but nearly catastrophic and IS the cause that brought along this year's "effect." But this is going way to deep into a territory that few comprehend, so I will duck out of here, before I say something that will piss off a LOT of people.

[g-man]

Roy, what is this carry cost?

Land in the douro is so cheap, I can't possibly imagine the cost of carry being anywhere near exorbitantly high.

i've heard from a napa valley wine maker for example that a typical high end cab will take ~20$/btl to manufacture. ~14$/btl if you own the land the grapes grow on.

Are you saying that the carrying cost is anywhere near ~15$/btl to justify a 70$/btl release price after teh us 3 tier system?

[RAYC]

For many years, when I've read people's posts about how the Port trade is making so much money and charging too much for their latest VP releases, I just shake my head and say nothing, realizing that it is sheer ignorance, (I say that in the kindest sense ... as in "uninformed" not meaning stupid) and that these Port lovers think that all that goes into it is the cost of the juice, the label/cork/bottle etc. That is SO FAR from reality it is ridiculous.

Most coversations I have heard re: release prices being "too much" are based on the feeling that prices for back-vintages in the secondary market do not support release prices for the new vintage (a few big Parker-points excepted). I do not think that it is sustainable for the port trade to rely on "enlightened" Port lovers to overlook that reality. Looking at the 94s/97s, if a port of can be purchased after 14/17 years of professional storage at less than the release price of the current vintage, the disconnect will be too large for many to ignore.

Just for example, if a Port producer wants to increase their sales by volume the following year by 10%, they will have to increase their production by 30% to do so and then have to hold back 2/3 of that increase. The exhorbitant carrying costs of doing so are outrageous but nobody ever thinks of things like this. I can give MANY other examples, but why bother. People will never care what the realities are of pricing when it comes to Port; they're only thought is: how does the price affect my ability to purchase the Port ... or not. I do understand that way of thinking, but it leaves out so much of the bigger picture.

Faced with finite resources for port purchases, there has to be an allocation based on value. Yes there is a "bigger picture" in terms of the port industry, but there is also usually a bigger picture from the perspective of most individual consumers (for whom port is an indulgence/luxury to be fitted around: reduction of personal debt, pension, taking care of family, charitable donations etc.).

So if there are IVDP regulations (such as the rule of 2/3, to use your example) that are causing exorbitant input/carrying costs and are not fit for purpose, this is surely the area to concentrate on and i do hope that some sort of consensus can be reached (and action taken) before it is too late for the livelihoods of many in the Douro and their businesses.

[Andy Velebil]

Roy, what is this carry cost?

Land in the douro is so cheap, I can't possibly imagine the cost of carry being anywhere near exorbitantly high.

i've heard from a napa valley wine maker for example that a typical high end cab will take ~20$/btl to manufacture. ~14$/btl if you own the land the grapes grow on.

Are you saying that the carrying cost is anywhere near ~15$/btl to justify a 70$/btl release price after teh us 3 tier system?

Don't have time for a long post, but Port you have the law of the third, so you can't sell all you make. You've got overhead, saleries, travel, promotion, taxes, etc. that all adds up. It's costs a LOT, actually a HUGE amount of money to run any wine company and the Douro is even more expensive than many. More later.

[uncle tom]

Most coversations I have heard re: release prices being "too much" are based on the feeling that prices for back-vintages in the secondary market do not support release prices for the new vintage (a few big Parker-points excepted). I do not think that it is sustainable for the port trade to rely on "enlightened" Port lovers to overlook that reality. Looking at the 94s/97s, if a port of can be purchased after 14/17 years of professional storage at less than the release price of the current vintage, the disconnect will be too large for many to ignore.

Sadly this is still true, although there has been a little narrowing over the last couple of years.

Although there has been no negative reportage surrounding the 2003 vintage, those who bought at release, paid for storage and now sell at auction; are netting an average of around 65% of their total investment - which is not good..

The producer's solution to this problem seems to be to slash production and starve the market into submission - some of the top names are only bottling around a tenth of the volume of VP they produced 40 years ago.

But is this a good idea? - better, IMO, to knock prices of VP back by a third and set out to double or treble sales.

Tom

[mosesbotbol]

There's a reason why a few producers have chosen to move away from applying for the IVDP's Selo da Garantia for their Douro wines (NOT Port though, as of yet) and opting for DOC labeling on the back of their bottles instead ... for those that take notice of such things. It is lately and I've been informed that this choice is due to subtle protestation or a quiet revolt against paying money for Selo's that was supposed to be used to fund the IVDP's promotional efforts that instead wound up in the aforementioned "war chest."

Very infrequently do I ever see a Selo on a Douro wine, virtually all modern Douro's have DOC label on the back. Personally, I like the way it looks better and don't associate the Selo with Douro wines. Each region has a nifty looking label on the back that works better for the consumer.

[uncle tom]

I've never liked the selos - they do nothing for the appearance of the bottles, especially in markets that demand a tax strip as well - which makes the bottles look a right mess..

The selos do little for product security, as they are printed on plain paper that can easily be copied; and checking the numbers (whilst possible) can't be done on line.

Time to move on, IMO, and use more modern security methods, either within the labels or under the capsules.

Tom

[jdaw1]

and checking the numbers (whilst possible) can't be done on line.

Fixing that is such an obvious step, but an an anathema to a secretive bureaucracy.

Come the revolution, it will be possible to check bottle numbers online.