OK, so I should start by saying that today’s post about ‘Black Holes’ has nothing to do with the James Webb Space Telescope and the plethora of discoveries that have started to unfold since its launch. Believe it or not this is to do with Spanish banking!

Some years ago, when an importer purchased wine from a bodega payment would be made quite simply by sending a cheque through the post (hence the often abused expression “the cheque is in the post”!).

These days, thanks to advances in technology, this old system has almost completely disappeared, and invoices are now mostly settled by electronic transfer. Using this system money can be moved almost instantaneously, although transfers between businesses usually take up to 24 hours within the same country, whilst overseas transfers should normally be completed within two working days (depending on the countries involved). Well, that’s the theory at least….

My experience in Spain, however, is not quite so straightforward, and perhaps could best be described as erratic. When a customer pays us by transfer we usually receive confirmation (a copy of the transaction), providing us with the exact time and date that it was completed. Unfortunately, this is where, on some occasions, our money vanishes into a ‘banking black hole’ and then magically re-appears up to a week later in our account. This normally only happens when we start to follow up the missing transfer. Personally I think that this is a scandal, and certainly should not happen in this day and age. Do you sometimes get the feeling that your money is being manipulated?….

In the last week or two, despite the baking temperatures, we have been clearing the corner of one of our vineyards. Yes, this did involve cutting a few trees, but I should emphasise that we did seek the appropriate permissions, and that the trees that we cut were mostly eucalyptus, not indigenous to Galicia, considered by many to be invasive, and the cause of many a forest fire in our region. There were two, or perhaps three reasons for doing this work….

Firstly, because we are obliged by law to clear forest areas and scrub land, precisely to reduce the risk of fires. Secondly, because this small piece of land is actually registered as a vineyard, and has never been exploited as such. And thirdly, because of the price of grapes at the moment!

This third reason is actually a major concern for Rias Baixas this year, and all because of one single bodega! I shall not name the property concerned (perhaps for liable reasons), but every bodega locally knows exactly who they are, and that they are owned by a much larger Company from outside Galicia. The simple fact is that they are desperate for grapes, and as such have been making ridiculous, unsustainable offers to local growers, often going door-to-door and poaching thousands of kilos of grapes from their neighbouring wine cellars. I should mention they the size of the bodegas that they are plundering from are not small, and have been left very, very angry indeed (something of an understatement).

Suffice to say that these tactics (apart from being completely unethical), have caused an artificial surge in the demand for grapes, and will no doubt result in highly inflated prices, just at a time when consumers are reducing their spending, and perhaps seeking opportunities to trade-down a little. Enough said, I will stop before my blood boils!

Well, I really don’t know what more I can say about our weather, except that it continues to be both changeable and unpredictable. Having said that, I am sure that many wine regions around the world are telling the very same story. There has been no sustained period of any type of ‘settled’ weather, and indeed it continues to vary wildly almost from day to day. Take this weekend for example – Saturday sunny, with a warm wind and temperatures in the high 20’s °C (towards 80°F), and then Sunday morning cold and wet, with temperatures nearly 10°C lower at about 17°C (63°F). The other weather characteristic of 2022 is that, when there has been sunshine, the air temperature has often remained cool – refreshing in some ways, but again, not really great conditions for our fruit.

To repeat my story of the other day, our cellar is still full to bursting with prepared orders. Of course, we love this scenario, but we now just want to get them out and on the road! Road hauliers have somehow been reluctant to give us firm dates for collections as yet, and my guess is that this is to do with the current shortages of both containers and drivers. We now find ourselves is the strange situation whereby we have stopped preparing large orders until we have more space!

In my previous 2021 posts I have mentioned the quality of the wine itself, the low yield per kilo, and the crazy grape prices. As if these complications alone are not enough, they has been further compounded by the knock-on effect of the Covid crisis. Energy, transport and dry goods prices are all suffering badly as a result.

As the recovery from the pandemic got under way, then so the demand for energy increased rapidly. Gas reserves were already depleted by a cold winter, the generation of power from wind turbines was down (simply owing to a lack of wind), immediately followed a baking summer in many countries placing a huge demand on electricity grids for systems such as air conditioning. Almost the perfect storm.

Increased production costs caused by new energy tariffs, together with unprecedented demand on raw materials, such as paper (for packaging), had also led to sharp increases in tariffs for dry goods. Bottle production for example, depends heavily on gas supply, for their ovens – it’s a very frightening trend.

International supply chains are also under huge pressure. The infrastructure simply cannot meet demand caused by the hangover from Covid and the sudden upsurge in business. Ports are overloaded, ships are queuing, containers are out of position and there is a shortage of drivers and road transport to help clear the backlogs. The price of a container can now be as much as 300/400% more than last year!

The long and short of it all is that the cost of living for all of us will increase, and very unfortunately for us (and our region), our business and wines will simply get carried along by this tsunami.

The story of the 2021 vintage really starts with the 2019 and 2020 vintages. In my last post I mentioned the style of these wines, but the other significant factor was the volume produced – they were not big vintages at all.

A few months after the onset of Covid-19 albariño producers really started to feel the effects. Hotels and restaurants closed, and with it the on-trade business dried up completely. The only sector that appeared to benefit was the supermarket sector (small wine shops and liquor stores were also locked down). As consumers were not able to eat or drink outside their homes, so the supermarket business took off…. but regrettably, at a cost. Whilst trading with supermarkets proved lucrative, it was much more to do with volume than profit. Cellars were simply happy to see wine going out, not knowing how long the Covid crisis would last.

By May/June 2021 the on-trade tentatively started to re-open, but once it did start up, then what followed was something of a cascade. It appeared that restaurant customers were making up for lost time, and consequently orders were flying out of our door almost as quickly as we could prepare them! Having resisted the temptation to flirt with supermarkets, we still had stock, whilst those that had succumbed to the temptation suddenly had a crisis on their hands. By August 2021, many cellars (including many big players) were simply running out of wine – a month or two before the new vintage was even ready to be picked.

A mad scramble ensued. Cellars were desperate to buy tanks of wine at almost any price, and, as a result, the vintage 2021 problem started to emerge. In a small wine region that still relies heavily on buying grapes from producers, Pandora’s Box had well and truly been opened. 2021 was destined to become the year of grape ‘ransom’ (regardless of quality)!

There are still a couple of puzzling things arising from the Covid-19 story. For example, I believe that, at least some of Spain’s comparative success in containing the virus over recent months has been down to the rigid enforcement of the use of masks everywhere in public (including out on the street). It is very odd, therefore, that the Spanish government has recently decided to relax this a little, just at the exact moment that the virulent new Delta variant has hit the Spanish peninsula! This is a little like the UK Government allowing flights from India to continue for weeks after this new ‘Indian’ variant was discovered. These things are complete mystery to me….

On a more positive note, our warehouse is full (of orders), albeit that since taking my photos a couple of days ago, most of these pallets have actually been collected. We have gone from full to empty in 48 hours! Our mission now is to restock, and we have been busy preparing tanks and trying hard to procure all the ‘dry goods’ that we need. (Dry goods are the bottles, corks, capsules, labels and cases). I used the word ‘trying’, because many of our suppliers have been hit by the same tsunami of business as we have, and like us, they are desperately trying to fulfil orders as quickly as they can. I have heard first hand that even some of the biggest spirit brands have been hit by the same delays, leading to stock shortages on shop shelves.

However, I guess that we shouldn’t be complaining about having too many orders….

Since the last week of May, and up until today, the weather has at least remained dry. Temperatures, however, were still struggling at around the 20°C mark (68°F), and it wasn’t until the second week of June that the thermometer finally hit the mid-to-high 20’s C (75-85°F). The good news is that these conditions proved to be almost perfect for flowering, and by the time that today’s rain arrived, the bunches had already started to take shape, with the small berries starting to grow almost to the size of peas (actually more like ‘petit pois’ at this stage!). Of course, this recent combination of rain and sun has meant that the vine plants themselves are extremely vigorous and the canopies are thick with vegetation. There will clearly need to be some thinning of leaves over the coming month or two.

On the business front things are also looking much brighter, as a few important markets slowly emerge from this disastrous pandemic. New orders have been arriving thick and fast, and to be honest we have almost been struggling to keep up. No sooner do we bottle a new tank, than the whole lot is out of the door! I think it’s pretty fair to say that we are not complaining….

After year’s of discussion, debate, argument (and perhaps just a little coercion), Brexit is finally done… on paper at least. Of course, there are still a further 11 months of negotiation to complete before we finally know how the UK economy will emerge from this, the biggest political upheaval in modern history.

At midnight last Friday (11pm UK time) it was all over, with perhaps just 52% of the UK population in celebration whilst the other 48% were possibly still reeling in shock and disbelief. To say that the UK was polarised by this event is something of an understatement. Crowds gathered, corks were popped – some for joy, others in consolation. Some wanted bells to ring out around the nation, whilst others held candlelit vigils. It was a moment of great division.

In reality, after all the brouhaha, the ‘celebrations’ ended up being a bit of a non-event. For me, there was one person in particular who summed up the moment beautifully by offering us the best possible solution – “we’ll just have a cup of tea and go to bed”!

For now at least, we have no real option but to sit back and see what the future brings for our trade with the UK.

Without any doubt, for the people of the UK, Brexit has become the biggest political debate of all time. It has divided friends, families, regions of the country, businesses and most significantly, the politicians of the UK Parliament. Never have opinions been so polarised, and never has one subject dominated the headlines for such a long time. I think it’s probably fair to say that the majority of British (and some EU) citizens have had enough, and are simply tried of hearing about it every waking moment of the day (despite the fact that it will ultimately determine the future of their country).

Without mentioning the pro’s and con’s of Brexit, my intention is simply to write briefly about how this might effect the way in which we trade with the UK.

Firstly, if the UK does not remain a part of the Customs Union, then the export process itself will be come slightly more complicated. Whilst, in theory at least, there is currently free trade between member states and goods can circulate freely within EU borders, there is still a significant paper trail that needs to be completed. However, once this is done our wines can move quite easily from ‘tax warehouse’ to ‘tax warehouse’ (warehouses using the system need to be inspected and approved). If the UK drops out of the union, then not only will the paperwork change, but potentially there could be huge queues of trucks waiting to have their loads (not just wine) checked and cleared at the port of entry. Motorways approaching the ports could quickly become huge lorry parks…..

The final complication is currency. Whilst the UK has never entered the monetary system, and still retains the GB Pound, money markets are now more volatile than ever. Uncertainty has resulted in a significant drop in the value of Sterling against the Euro, meaning that all goods purchased abroad have now suddenly become more expensive for UK importers. This increase will have to be paid by someone, and I’m very afraid to say that this will most probably be the poor end consumer!

The aviation research firm Skytrax announced its 2019 ranking of the best airlines in the world on Tuesday.

In first place was our newest customer – Qatar Airways, where our Castro Martin wine will very soon be served in their First Class cabins. We send them our warmest congratulations!

It goes without saying that we have offered our own services at any time to conduct free in-flight tutored tastings!