Koch’s Jefferson lawsuit thrown out of court

Bad news this week for billionaire wine collector William Koch, who has lost his bid to reinstate a lawsuit against Christie’s that claimed the auction house “induced” him to buy counterfeit wine. As reported on db.com, the US Court of Appeals in Manhattan last week upheld a 2011 ruling by US district judge Barbara Jones dismissing Koch’s suit after finding that he waited too long to sue, agreeing that the statute of limitations had expired.

“For wine, timing is critical, the same is true for causes of action,” said US district judge John Koeltl, who was sitting on the appeals court for the case. “I’m very disappointed by the decision. The appeals judges dismissed the case for a technicality, although we know they got a lot of the facts wrong, but they’re the ones who decide what the facts are,” Koch said. “Christie’s got away with an incredible hoax,” Brad Goldstein, a Koch spokesman, told Bloomberg. Koch filed a lawsuit against Christie’s in Manhattan in 2010, claiming the London-based auction house had sold him counterfeit wine “for many years.”

Koch also said that Christie’s had “induced” him to buy four bottles of 1787 Château Lafite engraved “Th.J” that had purportedly belonged to American President Thomas Jefferson from German wine dealer Hardy Rodenstock in 1987 because Christie’s described the wines “positively” in auction catalogs during the 1980s. The wines were allegedly discovered in the mid-‘80s when Rodenstock claimed to have found a cache in a bricked-up cellar in Paris. Koch had the bottles tested in October 2000.

One of the purportedly fake Jefferson bottles

In dismissing the case last year, Jones said Koch knew the bottles were counterfeit and that he bought the wine out of a “desire to gather evidence against Christie’s.” Jonathan Lerner, a lawyer for Christie’s, told Bloomberg: “Today’s court ruling was clearly correct, Koch’s claims turned to vinegar a long time ago. The only hoax in this case was the allegation in the complaint that ‘no credible question’ had been raised about the wine until shortly before the complaint was filed.”

Koch should have made inquiries about the wine by October 2000, when a report was issued about its authenticity, the appeals court said. He filed his suit in 2010. A historian at Monticello, Jefferson’s former home in Virginia, issued a report in December 1985 that determined “no solid connecting evidence could be found between Jefferson and the Th.J wine.” While the report didn’t become public at the time, newspapers including the New York Times published articles saying there was “scholarly doubt” about the authenticity of the wine. Koch has previously sued Rodenstock and American auction houses Zachy’s and Acker Merrall & Condit for fraud.

Lambrusco trending in London and New York

Lambrusco is experiencing a revival in both London and New York, particularly with younger consumers who aren’t burdened by the Italian sparkler’s negative connotations. As reported on db.com, in a recent New York Times article in praise of Lambrusco, wine columnist Eric Asmiov commented: “I’ve been delighted to see delicious evidence of its rebirth here in New York.

“Restaurants dedicated to the hearty, rich cuisine of Emilia-Romagna, like Via Emilia and Osteria Morini offer extensive lists of Lambruscos. Five years ago, I would have been hard pressed to find a handful of Lambruscos in retail stores, now I can easily put my hands on a few dozen different bottle,” Asimov added.

Liz Nicholson, wine director at Roman trattoria Maialino in Gramercy Park, has also noticed a surge in demand for Lambrusco from young consumers. “We have people coming in and asking for Lambrusco. Even if they don’t really know what it is, they’ve heard about it,” she said. In London meanwhile, Quo Vadis in Soho, Obika in South Kensington and Michelin-starred Casamia in Bristol all have Emilia Romagna’s largest and oldest Lambrusco producer – Chiarli – on pour.

Owner Anselmo Pellini (pictured) is passionate about changing consumer perceptions. “My big aim is to get Lambrusco taken seriously again. We take our winemaking very seriously and want to bring the quality message back,” he said, adding, “It’s a tough challenge as Lambrusco’s reputation was badly damaged in the ‘70s and ‘80s with the cheap, low-alcohol versions sold in the UK and US. Our wines are nothing like that – the majority are dry and around 11% abv.”

A listing at three Michelin-starred restaurant Osteria Francescana in Modena, voted the fifth best restaurant in the world at this year’s San Pellegrino World’s 50 Best Restaurants, is helping to elevate Chiarli’s reputation. “What many UK and US consumers don’t know is that Lambrusco secco can be drunk throughout a meal. It pairs incredibly well with grilled meat, pasta and cheese,” Pellini said.

Ben Smith, communications manager at Enotria, has recently seen sales of Chiarli’s 100% Pignoletto, Modén Blanc Brut, soar in the UK. “People are going bananas for it, the British public can’t get enough of it,” he said, adding, “A lot of people think of Lambrusco as sweet, but the best examples are dry, clean and  refreshing. And at around £15 a bottle at the top end, they’re also incredibly good value.”

The power of wine competitions

Wine competitions are a lottery. Evidence of the random nature of the results came to light in 2009, when winemaker and retired statistics professor Robert Hodgson published a report in the Journal of Wine Economics, which found that the winning of a gold medal at a wine competition can be statistically explained by chance alone. The report analysed over 4,000 wines entered in 13 US competitions. Of the 2,440 wines entered in more than three competitions, 47% received gold medals, but 84% of these same wines also received no award in another competition, indicating that the probability of winning a gold medal at one competition is stochastically independent from the probability of receiving gold at another. Hodgson concluded that there was almost no consensus across the 13 competitions regarding wine quality. “I take awards results with a huge pinch of salt because there’s such a huge chance for random results,” admits Andrew Maidment, director of Wines of Argentina.

But despite this rather damning report, or perhaps because of it, producers in their thousands continue to enter wine competitions, presumably under the premise that if you make a competent wine and enter it into enough competitions, that wine will almost certainly win gold eventually. Though some producers, such as South Africa’s Eben Sadie and Ken Forrester, have spoken publicly about their dislike of the wine competition model, refusing to enter any of the awards on the market. For those that do take part, wine competitions are a win-win situation for both the organisers and the participants, with the former putting them on for the profits, and the latter entering for the visibility and bragging rights a medal win brings. Further along the buying chain, consumers gravitate towards award winners in supermarkets, using the shiny gold medal sticker as a quality signpost, while retailers continue to rely on medal winning wines to boost sales.

Wine competitions serve all sectors of the industry, but with the recent proliferation of competitions flooding the market, is their power becoming diluted? Singapore-based wine writer and editor Ch’ng Poh Tiong is skeptical about the number of new competitions that have appeared in recent years: “There’s an ocean of different competitions from every wine region in the world – every wine fair has one – it’s mind-boggling.” Deborah Pratt of Canadian wine producer Inniskillin agrees: “The increasing amount of wine awards out there starts to dilute their importance. Consumers are less likely to react to the results if the market is flooded with similar competitions.”

So which competitions still carry weight? The big three: The Decanter World Wine Awards, International Wine Challenge and the International Wine and Spirits Competition appear to be in a league of their own from the rest of the competitions around the world. “As with all things, from cars to hotel chains, the brand is important,” says Poh Tiong, adding, “Reputation is everything, otherwise you’re just another competition from the rabbit’s hat.” The big three aside, Jo Ahearne, winemaker for Marks and Spencer, believes competitions with a specialist focus like the New Wave Spanish Wine Awards “give a narrower spotlight” on the winners. Local competitions are proving important in their own markets, such as the Concours Mondial de Bruxelles, Vinitaly, the Australian show competitions and the SA Awards in South Africa. “Occasionally, medal wins at a local competition can have wider influence,” says Michael Cox, director of Wines of Chile. “A big win at an Australian show can affect sales substantially, and make or break a wine’s reputation,” Cox adds, though Poh Tiong believes the idea of Australian judges awarding medals to Australian wine to be “almost inbred.”

Having organised The Wine Review Wine Challenge since 1991 – a successful wine competition born of Singapore-based wine magazine The Wine Review, Poh Tiong decided to discontinue it last year and launch an online wine competition geared around matching wines with Asian food – the Perfect Pairing Awards. “We were part of the wine awards mix, but there were so many like us, so I decided to do something completely different and focus on food pairings. It was a cold-blooded business decision, but a differentiation worth making,” says Poh Tiong. The competition pits wines against three popular dishes from three key Asian cities – this year Singapore, Hong Kong and Beijing took part. “It seemed a logical path. There’s a lot of focus on pairing wines with Asian cuisine and I think it answers the needs of the consumer,” says Poh Tiong.

Producers are becoming more cynical about wine competitions, and discerning about which ones they enter. “Wineries are getting a bit tired of supporting someone else’s bank balance,” says Gary Jordan of South African producer Jordan Wine Estate. “With everyone trading off each other, you have to ask yourself, ‘what am I getting in return?’” If properly publicised, a medal win can lead to a surge in sales. “We see fantastic sales uplifts on award winners. The increase depends on the base sales, but you can double, triple, or even quadruple sales quite easily with a well marketed win,” says Sainsbury’s wine buyer Julian Dyer, adding, “The quality of our own-label wines is unparallel, but our customers don’t necessarily know this, so an award win is a great way of proving their worth.” But recently, both winemakers and retailers have noticed that big wins don’t have the impact they used to. “You can’t win a medal and expect your wine to walk off the shelf. It’s a lot harder work now; you really have to let your customers know about it,” says Jordan. Simon Doyle of Concha y Toro agrees: “Ten years ago, awards wins had a much more immediate impact. Now it’s more steady as you go, with a gradual increase in sales rather than a sudden surge.

In a bid to shout about its numerous award wins, Concha y Toro has released a print advert featuring a wine rack filled with CyT wines, each of them labelled with their medal win alongside the tag line: ‘Which award-winning wine is your favourite?’ “Awards are one more tool in the promotional tool box,” says Alison Dillon of Wines From Spain. “We’re fortunate in the UK to have some of the top international competitions on our doorstep, but it remains to be seen whether this emphasis will shift as Asia starts to flex its wine buying muscles,” Dillon adds. In terms of catching the consumer’s eye in the aisle, opinion is divided as to whether or not to use medal stickers. “I try not to put stickers on my bottles, it’s not our style – they end up looking like Christmas trees,” says Jordan. Andrew Maidment of Wines of Argentina thinks consumers don’t understand the differences between the competitions, let alone the medals: “I read an article that said consumers consider a ‘commended ‘ award better than a bronze medal, because bronze is seen as coming third and commended means experts have given it the thumbs up.”

Stickers aside, in which markets does a big win matter most? Outside the UK, the US, Canada and Asia take awards results the most seriously, especially from the big three (DWWA, IWSC and IWC). A points-driven culture, American consumers are more open-minded about wine recommendations. “Awards results are very important in the US market. Consumers have grown up with Robert Parker and The Wine Spectator scoring wines out of 100, so a big win has an immediate impact over there,” says Concha y Toro’s Doyle. With a lack of concrete knowledge about wine, coupled with a keenness to learn, awards results also have a big impact on Asian consumers’ buying habits. “The average Asian consumer hasn’t even heard of Decanter, but if they were in a supermarket faced with four similar wines, they would gravitate towards the one with the medal,” says Poh Tiong. Doyle agrees: “Wine knowledge in Asia is at a much less mature level than in Europe, so consumers are still looking for pointers when choosing wine, and an award win carries weight. Chinese retailers are also more open-minded about marketing award wins,” he says.

Many wineries seeking representation abroad enter international competitions in the hope that a gold medal might land them a UK listing. “A big award win at an international competition could make us taste that winery’s wines if we didn’t know them, and see if they suited our style,” says M&S’s Ahearne. Maria José Sevilla, director of Wines From Spain, believes the New Wave Spanish Wine Awards serve as a barometer for UK wine trends. “We’ve seen positive effects from the awards in terms of a foot on the export market for some and new listings in the on– and off-trade for others,” says Sevilla. Though not everyone is in favour of wine competitions. Chief wine critic of The New York Times Eric Asimov can’t see the point of them: “I don’t pay attention to wine competitions and put no stock in the results. The idea that tasting several hundred wines in a day is going to yield credible and meaningful results is a myth that I’d rather not do anything to uphold. It doesn’t present consumers with the best wines in the world, only the best of what were available. Robert Parker and The Wine Spectator still carry more weight in the US with their ratings than the results of any of the big wine competitions," says Asimov.

Love them or loathe them, wine competitions are here to stay, serving both as a benchmark for producers to see how their wines match up against their contemporaries’, and a valuable quality signpost for novice wines buyers. For Andrew Maidment of Wines of Argentina, it all boils down to the need for a point of difference. “There’s a desperate desire among producers to make their product stand out. The market is so fiercely competitive, if your wine isn’t instantly recognisable as unique, then you’re a nobody.”

Article originally published in The Drinks Business magazine.