Over the last decade several Israeli wineries have created a niche consistently producing internationally recognized premium wines. Getting glowing reviews from Robert Parker, Hugh Johnson and several wine magazines, these wines became the standard bearers for Israeli wine. For instance, the widely heralded and appreciated boutique wines of the Domaine du Castel, Margalit and Yatir wineries have been fetching over NIS 200 a bottle and often selling for considerably more as these wines mature years after their initial release. Under their Yarden label, the Golan Heights Winery spearheaded the effort for commercial wineries to keep pace with their Katzrin series while Carmel’s Limited Edition as well as Barkan’s Superieur also gained a loyal following. Yet, even at these prices, the most expensive Israeli wines did not even scratch the “sticker-shockable” price tag that wines from Bordeaux, Piedmont or Napa often carry. As an example, a bottle of 2007 Chateau Lafite Rothschild (the wine family who founded the Carmel Winery) sells for a hefty NIS 1600.
The hundreds or sometimes thousands of dollars that are being charged for future releases or at wine auctions certainly caught the notice of Israeli winemakers and CFOs. Bordeaux’s Chateau Petrus often sells for over $1,000 a bottle at first release, yet it’s unheard of for an Israeli wine to sell for even a quarter of that price and the wines are just now pushing more frequently towards NIS 400.
A few Israeli wineries have been testing the waters for “über-expensive” wines. The Zauberman winery was one of the first to see if prestige buyers would flinch as he was offering part of his small 5,000 bottle yearly production for NIS 500 a bottle. Yet even though the reviews were generally good, Israel’s highest priced wine wasn’t getting the highest praise from local or from international critics that wines half its price were receiving.
A few new releases could significantly change the landscape of prices for top-tier Israeli wines. Two of Israel’s largest producers, the Golan Heights Winery which produces five million bottles a year, and the Dalton Winery which produces one million bottles, have recently released ultra-premium wines that are selling for almost twice the price of their previously highest priced wines. The Golan Heights Winery, under their Yarden label, produce their Rom (“elevated” in Hebrew) wine, a combination of Syrah, Cabernet Sauvignon and Merlot. With only 6,000 bottles released, it represents one-tenth of one percent of the winery’s production so they are saying it’s their best wine from their best grapes from their best vineyards and that conveys prestige and value at $90 a bottle. Dalton offers its 2006 Matatia featuring Cabernet Sauvignon, Merlot and Cabernet Franc making it the only Bordeaux-style blend of these powerhouse wines. The smaller commercial winery, Ella Valley, which produces 2,000 bottles of its ultra-premium E wine, is charging NIS 380 for what it hopes is a wine that best represents what is possible in Israel’s Judean Hills. This wine was recently awarded a gold medal by Decanter Magazine in the UK.
Now wineries might be hard pressed to say that this new class of wines is twice as good or in twice as much the demand of their next tier or even Castel’s Grand Vin or Yatir Forest, but it doesn’t work that way with other luxury products. A $ 5,000 Rolex wrist watch isn’t targeting the same market as a $300 Bulova or a $50 Casio, but there is a particular though small segment of the population that is willing to pay for the status of the most expensive watch or wine and a certain segment of the marketplace that is inspired to find them outlets for “liquidating” their assets with plenty of price points and perceived quality levels in between the highest and lowest priced offerings.
It may take several years as these wines mature before they reveal their true potential. The wineries provide their rationale for these seemingly astronomical prices by explaining that these wines use their best grapes from their best vineyards. These wines receive tender loving care above and beyond the attention given to any of their other premium or mass market wines, including unique oak aging techniques. So scarcity of these wines is a justifiable rationale, but will people pay if they find or are convinced that other wines surpass these wines in complexity, balance or expressiveness, but at lower prices? Time will tell and it may take three-five years before a consensus of experts chime in but let’s look forward to those corks popping in a few years and getting a chance to find out for ourselves.