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Wine Competitions: Who Benefits?

Wine enthusiasts should read the feature that was published on November 14 in the Wall Street Journal:
http://online.wsj.com/article/SB10001424052748703683804574533840282653628.html

The article, “A Hint of Hype, A Taste of Illusion,” reviews two well-publicized studies by statistician Robert Hodgson that support the notion that repeated judgments of the same wine, by the same wine expert, are so widely disparate that the ratings and medals given to wines are meaningless. When Hodgson studied the results of multiple wine competitions, he found the medals were spread around at random, essentially what one would expect by chance alone. Winery owners are well aware of this, and many of them admit to sending their wine to many different competitions because the wine, assuming it is good, will eventually win a gold medal by chance if submitted to enough competitions.

Winery owner and winemaker, Richard Alfaro, of Alfaro Family Vineyards in Corralitos, California, pointed out to me the hard reality about wine competitions. He noted that most of them are profit driven, not passion driven. The San Francisco Chronicle Wine Competition, for example, is a prestigious event and receives almost 5,000 wines for judging. That amounts to $300,000 in entry fees alone. In addition, multiple bottles of the same wine have to be submitted by the winery for judging. After the judging, a public tasting of the medal winners is held in which the wineries pour their wines for free. Last year the Chronicle sold 5,000 tickets ($45 in advance, $80 at the door) amounting to at least another $225,000. Most of the people working the event, including the judges, are volunteers and much of the food, water and logistics is either donated or supported by sponsors. On top of this, if a winery wins a Gold Medal, the Chronicle strongly encourages the awarded winery to advertise in the annual San Francisco Chronicle Wine Competition results issue, contributing significant advertising revenue to the organizers. When you look at the numbers, it is easy to see why there is a tremendous number of wine competitions.

So who really benefits from wine competitions? Wineries may not profit because the expenditure is significant if they enter multiple competitions, diluting the potential value of added sales revenue. If a wine does win a Gold Medal, it may quickly sell out, but other wines in the winery’s portfolio may suffer from perceived relative inferiority. Boutique wineries rarely benefit because they simply cannot afford to enter several competitions and often choose to enter none at all. The wine consumer derives little benefit because the results are not widely publicized and a majority pay no attention to medals won in wine competitions. It is wine critics’ scores that draw their attention and drive sales. Those who benefit the most from wine competitions are the organizers who pad their wallets through a falsely perceived premise that medals are awarded by judges who are infallible.

Your comments are welcome: prince@princeofpinot.com.

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