Brian Palmer, in this Slate article, makes some good arguments for buying ultra cheap wines. He, correctly, points out that American wines (and I will add Canadian wines) do not suffer from the same challenges that cheaper European wines suffer: namely outdated equipment and poor sanitation. North American wines simply can't put out bad wines at any price level because they are already fighting the quality stigma.
One note for the Canadian market: our prices are substantially higher for comparative bottles not because the retailer is trying to gouge, but because the tax levels are so high federally and provincially. A $4 bottle in the U.S. would cost about $10 here. Of course, the government is the retailer so when you think about it perhaps we are being gouged. I have often wondered what readers outside of Canada thought about the prices of wines I have used in the tastings. We do pay quite a bit more for wine - and all alcohol, actually - than people south of the border or in most of Europe.
There are two points I will argue with, the first is whether or not, as he calls us, "lay people" can distinguish between cheap or expensive wine. I did a tasting a short time ago where I pulled a joke on the tasters by including a bottle of home brewed wine. The wine was not unpalatable by any means but, the tasters were pretty quick to identify that they did not think it was particularly good. Cheap wine that is not good wine is easy for most people to pick out and the more you experience wine the more you will look for wines that offer more complexity IF you are thinking about the wine as you drink it. If you are simply going to wash down food with it or drink it for the buzz, then you should only be looking for a wine that doesn't make you gag. There are plenty out there. And as Palmer points out, if you don't like it you are only out a few bucks. But, for me, when it comes to a special evening out, I will still spend a couple of extra dollars to find a wine that I think will enhance the moment. That still doesn't mean I will be taking a loan to purchase it; there are plenty of good wines in the $10-$20 range in the LCBO.
The second point is whether or not "a little consolidation might be a good thing". I think Canadians have had their fill of consolidation in many industries and the lack of competition in telecommunications is proof enough of that; we pay the highest cell phone and internet rates in the world. I like many of our smaller wineries and think they force the larger companies to maintain a higher standard of quality. Competition is seldom a bad thing from a consumer's standpoint.
But, my minor arguments aside, I think Palmer is right to suggest you can walk into any liquor store and pick out a cheap bottle of wine and usually not be disappointed. So, here's a challenge to you: go to the liquor store this weekend and pick up a <$10 bottle of Ontario wine and decide for yourself. My recommendations are any of the 2 Origins Collection which is available at the Wine Rack at Longo's 2 for $10, or any of the Chateau des Charmes Chardonnay or Cabernet for $6.30 (LCBO code 38810, 38828).
Edit: the price for the 2 Origins Collection wines were 2 for $20. My apologies.
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