Friday, 12 February 2016

12.2.15 Important Debate on Sherry’s Position

Bodegas Williams & Humbert was the scene for yesterday’s forum on Sherry sponsored by the publishing group Grupo Joly. It was well attended by both the public and the trade, counting Beltrán Domecq, César Saldaña and Evaristo Babé among them as well as members of the city council. Jesús Medina, W&H managing director, spoke in positive terms about the situation in which Sherry finds itself before opening the debate.

He said that in the last 10 years Sherry had gone from excess production to a balance between supply and demand but the continuing slide in sales, which continues but which is slowing down, is limiting profitability. Yet Sherry is fashionable and has taken important steps towards profitability. It is on the right road though there is a long way to go and there remain important challenges. He made some suggestions for helping it on its way.

Jesus medina addresses the audience

Quality is the key, and he sees the example of Italy as one to follow, where after abandoning bulk, wine sales have increased by 15% in volume and by 20% in value along with a proliferation of high quality producers. “Profit is the result of quality, not quantity” he said, continuing that “in Jerez there is still much to do as sales are concentrated in mature markets which see Sherry as a mature product, there are too many BOBs and consumers are ageing and will ultimately be lost.” To turn this situation round he pointed out the need to diversify both markets and consumers by reinforcing the presence of Sherry in bars, hotels and restaurants and relying on quality.

The four main Sherry markets, Britain, Spain, Holland and Germany, account for 90% of sales, and all of them except Spain are in decline. He said it was not so much a question of abandoning these markets but of finding new ones like the USA, the world’s largest consumer of wine and with the money to buy it, and others with strong potential like Canada and Asia. Although Spain is now Sherry’s biggest market, it is largely because other markets are declining. Only 1.5% of the wine consumed in Spain is Sherry, and that is largely in Andalucía and at ferias.

Medina encouraged the trade to take advantage of the help it has had from its fashionability, being spoken and written about by experts and journalists, having been the European City of Wine. He also pointed out that what is fashionable is not the sweet and medium Sherry but the good and interesting stuff like Palo Cortado and unfortified Fino, yet innovation was not new, and he mentioned W&H Añadas, Barbadillo’s Manzanilla en rama, Lustau Almacenistas and the VOS and VORS wines. He continued “now is a very propitious time for innovation with young winemakers focussing on the soil and the vineyard who don’t use the traditional solera system as it masks these characteristics.

Cesar Saldana, Beltran Domecq, Luis Arroyo (Bodegas Arfe), Faustino Rodriguez (Bar Juanito)

Such wines are complementary to solera wines and there is much to be made from classifying the vineyards, like they now want to do in Rioja and they have done in France for ages. This would allow for better grapes to fetch a better price, something which can’t happen with the solera system where they are all mixed together. Then he called for a simplification of the types of Sherry to clarify wine which is difficult to communicate thanks to the huge variety of wines inherited from the history of making wine to suit each buyer. He said that the five main types: Fino and Manzanilla, Amontillado, Palo Cortado and Oloroso should be kept and labelled as dry, medium and sweet as necessary.

His final point was that he felt Manzanilla should be brought back to the DO Jerez, back to the start with a single DO which could defend everybody’s interests without distinction and with unity in the trade. Before taking questions he called for unity instead of argument and for a greater effort to promote Sherry with the support of gastronomy and wine tourism, something for which he applauded the efforts of the Consejo.

During the debate Jesús called for a reduction of regulations which form obstacles to the generation of profit. He said that Spanish businesses were burdened with 28,000 of them, mostly national and regional, and that taxes on alcohol needed revision. Asked about BIB he said that he disagreed with the rebels and that BIB harms the prestige of the product and that rules are there to be obeyed, though he believes in dialogue.

Asked by a bodeguero about the fortification of Sherry with spirit produced in Jerez, if it could be produced at a sensible price, a project he was working on given that spirit and some vino de color came mainly from La Mancha, Jesús replied that he saw little point as there are insufficient vineyards to grow the necessary grapes and what happens now is legal. On a point about promotional investment he noted that “we are not nearly investing enough, and while it has increased a little it is far from what it once was, and far less still than other DOs”. As an example he said that three well-known DOs were investing between them 18 million in the USA while Sherry had little more than 1.5 million for the whole world.

In response to a question about his view of the arrival of the multinationals with the recent takeover of the old Domecq, Medina touched on Brandy de Jerez which he believes has a promising future, and he felt the Andrew Tang takeover was a good thing, an investment of 275 million euros in Jerez Brandy.

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