Consolidation within the wine industry continued apace this week as the highly-regarded Napa producer Pahlmeyer was sold to wine behemoth E.J.Gallo. These sales of small, iconic family-owned wineries are understandable—the owners want to retire and cash in and companies like Gallo have the resources to make very attractive offers. But I’m always sad when I hear about them.
Of course Gallo, itself a family owned business, can make good wine if they want to. The question is whether they will want to, or will cost-cutting, profit taking and corporate-style decision making take its toll eventually. Someone should do research on the effects of corporate takeovers on wine quality. My guess is that wine quality suffers. Here’s why.
When “big wine” buys a valuable brand like Pahlmeyer, money flows out. That’s money that cannot be used to make wine. How does “big wine” make that money back? Reducing costs by consolidating employees and production facilities, raising prices, blending in wine from cheaper grapes, using cheaper barrels—none of that is designed to improve wine quality.
But in addition, something less tangible but even more important is lost. Successful, independent family wine businesses such as Pahlmeyer represent vision, hard work, risk taking and a personal investment in wine quality—it’s their baby, their life’s work, and compromising on quality is a painful choice because the family’s identity is bound up with the wine. A wine conglomerate doesn’t have the same personal investment in quality. Gallo has lots of brands. If one isn’t successful, others will be. This is a business decision, not a labor of love. That lack of personal investment makes it easy to cut corners should the need arise.
It’s that personal investment in quality that attracts me to a winery and its products. All things being equal, the product of a labor of love will always have an edge over a bottom line baby. Pahlmeyer wines were never my first choice but I’ve enjoyed them when I’ve had the opportunity to taste them. I no longer feel the same urgency to taste them again.