By Lauren Drewes Daniels
By Alice Laussade
By City of Ate
By Scott Reitz
By Lauren Drewes Daniels
By Alice Laussade
On an October evening, James Winkler works a crowd of some two dozen mostly young, attractive professionals. The group sits in rapt attention as he evangelizes for a substance that is as intimidating and inscrutable as it is coveted: wine. They laugh at his anecdotes, such as the one involving a customer who demands that her husband pour French wine over her body as she lies sprawled across a table in the buff. Champagne is poured.
"I think every woman in America should start off with a glass of champagne at about 6:30 in the morning," he insists. "I'm thinking two would be perfect, but I'll be satisfied with one. I think you'll be a better woman for it, you'll live longer, and I think your day would go much better."
Dark-haired and plump, Winkler is a class instructor at Tony's Wine Warehouse and Gourmet Restaurant on Oak Lawn Avenue. For years Tony's has chiseled a lucrative niche by donating wine classes to charity and loading them up with naïve connoisseur wannabes to taste 18-20 wines before leveling a sales pitch for offbeat wines at steep prices. How lucrative? Dun and Bradstreet Inc. estimates Tony's rakes in $1.7 million in annual sales from the 3,500-square-foot restaurant and retail shop. Owner Michel Monzain says actual revenues are much higher.
2904 Oak Lawn Ave.
Dallas, TX 75219
Region: Uptown & Oak Lawn
This deeply irks many longtime professionals in the Dallas wine trade. Tony's, they insist, butters its bread by dispensing instructional swill during class sessions--preying on participants' gullibility to justify inflated prices, often for wines well past their prime obtained mostly from distributor closeout lists. This sullies the whole wine trade, they say.
Exhibit One: The tasting sheet dispensed at the beginning of each wine class. "Tony's is a professional wine merchant specializing in wines from small boutique wineries," it reads. "These chemical-free wines mean no headaches, allergies or harmful reactions."
The message is unmistakable: Tony's wines are carefully selected to keep you free of hives, pulsing migraines, puffy eyes and other symptoms of rogue allergens. Or overindulgence, it turns out. Buy your wines at a grocer or a less careful merchant and the errant additives might wrack you with dry heaves or turn your bed into a whirling dervish.
Exhibit Two: Bizarre classroom oratory. "Rating systems and books written about wine are kind of silly to me," Winkler says to his class. "I've read them all, I've studied them all."
Talk quickly turns to oak.
Wine fermented and aged in French oak barrels tastes like mushrooms, Winkler says. Wine matured in American oak tastes like a campfire. The reason? In America, winery workers jump inside the barrels and scorch the sides to a thick char before they're filled with juice. In France, it all boils down to what the trees eat.
"The tree that produces this barrel grows up against every black and white truffle in the world," he explains. "When you cut this tree down, the tree has been feeding off these mushrooms for centuries. And when you cut the tree down, all of the oil that's in these truffles is inherently in this oak."
Hence, these barrels are expensive. Typically, a single 50-gallon French oak barrel costs between $35,000 and $65,000, Winkler says. Burnt American oak barrels carry a $30,000 price tag. Oak barrels coopered in Australia--produced from a French oak forest replica (Australia is the first country in the world to successfully replicate a French oak forest, according to Winkler)--cost roughly $40,000. This is why wines fermented and aged in oak aren't cheap. Presumably, it's also why Tony's wines aren't cheap.
None of this is true. Viticulture and enology scientists at the University of California, Davis, insist Tony's health claims are false--even libelous to high-volume wine producers. And while the flavors imparted by French and American oak barrels are distinct, they have nothing to do with mushrooms or burnt barrel staves. Actual oak barrel costs range in the hundreds--not tens of thousands--of dollars: roughly $700-$1,100 for French and $350-$550 for American.
When asked to defend statements dispensed as fact during Tony's wine classes, Monzain says he can't be held responsible for what his instructors tell customers. "I don't control everything they say," he says. When pressed further, he characterizes my questions as a witch hunt and issues a threat. "Me, I don't use court," he says flatly. "Besides court, I use the best investigation company in the country. And I'll find out everything about that person since the day he was born."
When questioned on pricing, Monzain points to the "group discounts" offered during wine classes. As the last few tastes are splashed and the buzzes drone, the class specials pop up like clover blossoms. A rare wine is introduced: a 2002 Beckmen Estate Cabernet Sauvignon. "Don't mention that we poured the Beckmen," Winkler says slyly. "This is a wine that never gets poured in class." He says this wine carries prices ranging from several hundred dollars to $1,200 on restaurant wine lists (restaurant wine list markups are roughly twice retail). But if you make a class purchase, he will slash the bottle price to $59 from Tony's regular price of $89. But hurry. Only three or four cases remain.
Yet the Beckmen Estate Cabernet Sauvignon carries a suggested retail price of $24.99, less than half Tony's "deep-discounted" price. After surveying a few restaurants, we found the Beckmen priced at a low of $39 at Sapristi! Bistro and Wine Bar in Fort Worth to a high of $52 at the Oak Grill in Ojai, California--a far cry from the up to $1,200 Winkler presented.
So, it seems, are Tony's customers.
According to sources in the distributor and wine brokerage businesses, Tony's Wine Warehouse built its retail trade in large part by buying heavily from distributor closeout lists. From these lists, retailers and restaurateurs can buy wine at steep discounts, sometimes for pennies on the dollar. The complexion of these lists is varied. Sometimes it consists of what's left of the previous year's vintage after a wine producer releases the most recent vintage. At other times it is seeded with overstocked wines that may have been neglected by distributor sales forces, overwhelmed by the sheer number of labels.
And then there are the "distressed" wines. These are wines that have been damaged. The reasons can range from extremes in heat or cold, to packaging failure, to age. "It's well to remember...that 90 percent of all of the wine produced in the world is as good when six months old as it is ever likely to be, and most of those wines will deteriorate, not improve, after their second birthday," states The New Frank Schoonmaker Encyclopedia of Wine. So the potential for distributor warehouses to accumulate stocks of wine that might be past their prime is marked.
Distributors have a huge incentive to unload these idle wines, as their inventory is subject to ad valorem taxes. "We're all looking for an outlet for this stuff," says a source who once worked in distributor sales. It's how Monzain finds a market for these wines that draws fury.
Once he purchases the closeout wines, or any wines, for that matter, Monzain marks them up--not at several times wholesale or several times the discounted closeout price, but several times the producer's original suggested retail price. Example: Among his warehouse aisles, formed by rows of pallets stocked with wine cases, is a 1999 Husch Mendocino Chenin Blanc. According to Husch Vineyards, this wine had a suggested retail price of $8.50 upon release. Tony's sells the same wine for $24.95, a hefty three times retail markup.
Monzain--who strenuously denies Tony's buys most of its wines from closeout lists, and indeed, the store does carry some current releases--vigorously defends the pricing on this wine. "It's 1999. It's not a recent release," he says. "As a wine gets older, it gains in value...All wines gain in value as they get older."
"That's definitely not true," says Ronn Wiegand, publisher of trade journal Restaurant Wine and the first person in the world to hold both Master of Wine and Master Sommelier titles, the industry's highest professional designations. Wiegand counters that the percentage of wines that do gain in value as they age is extremely small, well under 5 percent.
Monzain explains his business model demands these high markups, because he offers customers tasting samples before they purchase. "Last year we opened 3,400 cases for sampling," he says. "So we cannot be at the same markup as everybody else because of that extra expense. But people are happy to be able to sample."
Yet not every wine producer is happy about the impression their wines will leave with inflated price tags, tasting samples or not. One of the wines included in the Tony's wine class list is the 2001 Foppiano Russian River Valley Cabernet Sauvignon. The Tony's "front line price" for this wine is $44.95. That price drops to $29.97 if it is purchased in a mix-and-match case (12 bottles) from the class list. Yet the suggested retail price for this wine is $17.50. "I think somebody really upcharged it," says Jo Diaz, spokeswoman for Foppiano Vineyards. "It's an outrageous price...Wow, whoever is doing that is doing an injustice--to the wine, to the family, everything."
Professionals in the Dallas wine trade, some of them Tony's competitors, fear they will permanently lose customers once they learn they've been lured by false wine information to purchase very simple wine at highly inflated prices. What will these consumers think once they discover a wine for which they paid $30 at Tony's costs less than $15 at a wine shop in Plano?
"It's hard enough to get people to drink--in my world--wines with funny-sounding names," says one wine salesperson. "When you make them expensive, and if they're closeouts that may have been wines that have seen better days, I'll never get that customer back."
Then there's the dubious information. One of the most consistently circulated Tony's myths concerns "deep root wines," or the claim that vines with deep roots (up to 10,000 feet deep, according to Winkler) produce superior wines.
"That's an old wives' tale that sort of floats out there," Wiegand says. "It's never been proven."
Bogus information or not, the classes consistently fill. Monzain donates hundreds of Tony's wine classes to auctions every year, primarily to charities that benefit children and animals. The donated classes are structured to accommodate roughly 25-35 people with a donor value of $1,000 or more. The object is for the winning bidder to invite dozens of family, friends and business associates to the class. Tony's also conducts open classes twice a month where anyone can attend, space permitting, for $40 a head, although store salespeople liberally dispense complimentary wine class coupons.
Although Monzain insists he doesn't generate much income from the classes because many of the attendees don't purchase wine, it's difficult to understand why he would devote substantial time and space to the gatherings if they didn't generate healthy profits. He says Tony's conducts roughly 100 classes a month, devoting at least two rooms--dubbed Sonoma and Napa--to the wine confabs, with class participants tasting wines while they nosh on appetizers priced from $7.50-$18.50 a head. On one Saturday night, cheers and applause from the rooms seeped into the store and restaurant as the aisles between the pallets of wine cases filled with people waiting to slip into the next set of classes. From what we observed from several classes, it's not uncommon for participants to walk out with hundreds--even thousands--of dollars in wine purchases.
It was all too much for Amier Taherzadeh, owner of Chateau Wine Market and son of Stone Trail Restaurant owner Tony Taherzadeh. Last April, Taherzadeh published an e-mail newsletter with an article titled "Fraud in the Marketplace." In the missive, Taherzadeh relays some of the alleged falsehoods presented at the Tony's wine class he attended. One of the wines featured during the class was a 2000 Windtree Cabernet Sauvignon, the value-priced secondary label of the Ferrari-Carano Winery in Sonoma. The Windtree currently carries a Tony's price of $49.95, case-discounted to $24.97, more than the suggested retail price of $34 for the 2002 Ferrari-Carano Cabernet Sauvignon, that producer's premium label. When Taherzadeh questioned the price, he says the instructor insisted Tony's gets "the restaurant allocation of wines" from producers--a first or second superior crush--while other retail shops get inferior bottlings of the exact same wine.
That comment elicits laughter from a California winemaker whose wine is prominently featured in Tony's wine classes. "The wine gets all bottled on the same run," he says. "It's one master plan that's made, and it's consistent for every case...I sat through one of their wine seminars, and I couldn't believe how they were talking about winemaking practices...It was like, what are you guys doing, making this up as you go along?"
Taherzadeh concludes: "Okay Dallas, Michelle [sic] and Tony's Wine Warehouse is mocking you. They think that you are unable to tell the difference between good and bad wine, between the truth and garbage and that there is enough people in Dallas that he can rotate the entire city of Dallas through his facility with his donated wine tastings...He is taking a business that I love and warping people's minds."
Taherzadeh refused to comment to the Observer. But this past August, he issued an "Apology and Retraction," citing Tony's loyal customer base. "I apologize if anyone was offended by my opinions and I retract my article," he concluded.
Monzain admits he instructed his attorney to send Taherzadeh a "cease and desist" letter after the e-mail newsletter was brought to his attention. "He could have been sued for a lot of money," he says.
After the war, Monzain says he was subjected to continuous persecution growing up because he was a Jew. At the age of 6, he says, he learned that he had personally murdered Jesus Christ and was continually beaten up by other boys until the age of 9. The experiences fomented a determination to get to America.
"He's kind of an interesting character--if you get to know him and delve into his pathology, so to speak," says a wine salesperson. "He would tell me stories about how bitter he was, how much he hated the fact that he grew up being discriminated against."
Monzain says he reached the United States in 1954 as a young exchange student, settling in Michigan and later in California and New York. He entered college at the age of 16, studying geophysics at the University of Houston and business at New York University before landing a position in the French Embassy at 19.
His foray into wine came in the early 1980s when he established a wine import firm: Michel Monzain Selected Wines. The firm prospered, and he eventually established offices in New York and Los Angeles and even had an interest in a German winery in the Mosel region. He relocated to Dallas after his far-flung offices on the coasts proved too impractical.
Disaster struck in the mid-1980s with a series of scandals after wines from Italy, Germany and Austria were found to have been contaminated with diethylene glycol (an ingredient in antifreeze) and methanol. At least eight deaths in Italy were blamed on the methanol contamination. The scare strangled European wine imports to the United States, and Monzain's business began to unravel.
But just as his business was collapsing, Monzain says he was approached by Midlothian businessman Tony Sanders, who founded Tony's Wine Warehouse in April 1987. "After eight months and he had lost enough money, he said 'Do you want it? With the debts?'" Monzain says. "He got into it for fun, and the fun got enough." Monzain purchased the business in January 1988. "Our original idea was to go about and buy the total output of some of the special wineries over there [Europe] and bring it back over here," says Sanders, now a real estate investor and close friend of Monzain's. "It's basically the same concept that we started with." Sanders says buying from closeout lists was also part of the strategy.
For the first five years, Monzain ran Tony's strictly as a retail wine shop. But he slowly transformed the business into a wine education source through classes and charity donations. Classes grew steadily from once a month to once a week; eventually, he crowded the schedule with several classes a week. The restaurant came years later at the behest of his customers, he says. The restaurant seems an afterthought, though, as the service is clumsy (some servers don't speak English) and the food mostly mediocre.
Monzain deliberately targets novice wine enthusiasts, eschewing often tiresome wine sophisticates. "The message here is wine is agriculture, not snobbism," he says. "People like our message. The wine snobs don't like our message."
He also seems to have taken a cue from the wine contamination scandals that ravaged his import business. Monzain insists the wines he carries are from small producers and are chemical-free. Taped near Tony's cash register is a recent article about a Dutch study linking wine consumption with a reduced risk of stomach cancer. Scrawled in pen at the top of the article is a caveat: small-production wines only. But are the wines Tony's carries exclusively from small producers?
After perusing Tony's wine stock on several visits, we found two wines with the Silver Ridge label, including the 2001 Barrel Select California Silver Ridge Petite Syrah for $34.95 (suggested retail is $10, according to the winery). Silver Ridge is produced by the Bronco Wine Company of Ceres, California--the fourth-largest winery in the United States, selling an estimated 20 million cases annually, according to Wine Business Monthly. Bronco gained fame with its Charles Shaw wines, nicknamed the "two-buck Chuck" after they went on sale in the Trader Joe's grocery chain for $1.99 a bottle.
The Tony's wine class tasting list includes a Chardonnay and a Merlot from Salmon Creek, also a Bronco brand. Last spring Bronco CEO Fred Franzia, nephew of E. & J. Gallo Winery co-founder Ernest Gallo, challenged restaurants to limit wine list markups and sell Salmon Creek wines for less than $10 a bottle after he offered to set a wholesale price of $2.50. Tony's front-line prices on these wines are $35.95 for the Chardonnay and $34.95 for the Merlot, which drop to $11.98 and $11.65 respectively with case discounts.
Yet Monzain insists Salmon Creek is a small-production label in the Bronco portfolio. Bronco doesn't disclose specific case production figures, but a spokesman for the winery said that the big value/price relationship Bronco is seeking with Salmon Creek requires fairly substantial case production levels.
Monzain shakes his head and pulls a 1992 Gallo Northern Sonoma Estate Bottled Chardonnay from his shelf to illustrate. Just 2,025 cases of this $30 suggested-retail-price wine were produced (he says he sells it for between $50 and $60). "This is handmade," he says, presenting the label. "You think the family is going to drink the other stuff?"
For our case purchase, the salesman offered us tastes of most of the wines he presented but cautioned he would not be able to meet our pricing criteria. "I can help you with ones a little higher up," he said.
Tony's sales pitches are remarkably similar to classroom lore. "I'll give you a quick explanation about...the barrels," the salesman said, giving the mushroom-campfire yarn that explains the differences between wines made from French and American oak barrels.
As he poured a sample of Poppy Hill Cabernet Sauvignon from California, a man slipped from behind the counter and left the store. The salesman paused and smiled. "Now that he's gone, I can do something about the prices," he said. He pulled out a sheet. "Now that he's gone, this is what I can show you. The normal prices are these." He pointed to a column on the left. "I can do it for those prices." He pointed to a column of much lower prices on the right. "But I couldn't...do it until he was gone, because he's the owner...So I can do you better prices on things. So I was doing it kind of half-heartedly with you."
As we assembled our case, mostly from the wine class tasting list, he stopped to retrieve a special wine: A 2000 Godwin Alexander Valley Merlot. He billed the Godwin as a baby Opus One, the ultra-premium Bordeaux-style wine created via a joint venture between Robert Mondavi of the Robert Mondavi Winery and Baron Philippe de Rothschild of Châteaux Mouton-Rothschild. "[Opus One is] a kind of California version of a Merlot, and this I've been told is very, very similar to it," the salesman said. Yet Opus One, which retails for $165 per bottle for the 2002 vintage, is primarily Cabernet Sauvignon--from 80 to 97 percent, depending on the vintage--with just a splash of Merlot. "The reason why it's that expensive is because it's always written up in wine magazines," the salesman said. "And everyone believes what a wine writer says...I don't read wine magazines...Stuff like this, Godwin, that's not written up in wine magazines...it doesn't need to be written up in wine magazines." He cut us a deal: He slashed the price on the Godwin from $89 to $59 (it has a suggested retail price of $24.99, though some Internet sources list it as high as $28).
We took the Godwin and a rosé from Provence after a strong recommendation from our salesman. To sweeten the purchase, he threw in a couple of free bottles: a 2004 Salmon Creek White Zinfandel and a 1995 Reine Pédauque white Côtes du Rhône. The wines from our second buy were all white, including a 1997 Byington Santa Cruz Mountains California Chardonnay (suggested retail $22, Tony's price $59.95), a 1996 Chehalem Reserve Oregon Pinot Gris (suggested retail $19, Tony's price $34.95) and a 2001 Valley of the Moon California Pinot Blanc (suggested retail $15, Tony's Price $39.95).
"From a distributor's standpoint, some of the exclusives [Tony's] has are really nice wines," says wine broker Susana Partida. "But they're outrageously overpriced and they're few and far between."
"Here are the facts," he says emphatically. "There's no sugar in this bottle. There's no chemicals in this bottle. There's no...basically no calories in it...And hear me when I say this, y'all, there's no hangover in that bottle. Nothing in that bottle will get you sick, unless you're silly enough to drink two of them by yourself and then you deserve it: It's called alcohol poisoning. You will not get a hangover on this wine." Alcohol, he says, is not the cause of hangovers; it's the extra things producers, specifically large American producers, blend into their wines.
Of course this is rubbish. Sweet German Rieslings are loaded with residual sugar. And sugar doesn't cause hangovers. "The most common factor in hangovers is dehydration--too much ethanol and not enough water," says Dr. Roger B. Boulton, a chemical engineer in the department of viticulture and enology at the University of California, Davis. "If sugar was the issue, then most of the people in the United States would have hangovers almost every day, because of the sugar intake."
This highlights a recurring Tony's theme: Wines sold at Tony's are potentially safer because they contain no chemicals or additives and therefore will not cause headaches, allergic reactions or hangovers--unless you poison yourself with alcohol. And the list of chemicals Tony's claims large wine producers blend into their wines is alarming.
"Why do you people get headaches?" asks instructor Jean Bernard during a Tony's wine tasting class. "I tell you, it's the glycol, the penicillin, the asbestos filtration, the coloring, the flavoring and the added sulfites. That's your box and jug wine." Bernard explains that Europeans do not put chemicals into their wines, and that all Tony's wines are chemical-free. "We do not carry wines that have chemicals in them," he insists.
Winkler goes even further: "America is the only country in the world that will put a chemical, or will try to put a chemical, in a bottle of wine."
The truth is, virtually all wine producers across the globe utilize at least some chemicals in the wine production process, including sulfites to sterilize the wine, tartaric acid (derived from grapes) to correct acid deficiencies, bentonite (clay) and egg whites to precipitate out proteins, defoaming agents, compounds to remove trace metals, yeast nutrients to assist in fermentation and enzymes to clarify and stabilize wines and remove proteins. The Alcohol and Tobacco Tax and Trade Bureau (TTB), the agency that regulates the alcohol industry, publishes a list of materials authorized for the treatment of wine and juice.
But what of the other substances Bernard alludes to? According to Boulton, it is illegal to use glycol, penicillin or non-wine-derived colorings or flavorings in the standard winemaking process. Added sugar is legal in some states, such as New York and Texas, but is prohibited in California. Asbestos filtration, he adds, hasn't been in use since the 1970s.
"They're all standard wine, whether it sells for $3 for a four-liter box or $100 for a 750-milliliter bottle," says Rich Gahagan, a wine consultant and former wine technical advisor at the Bureau of Alcohol, Tobacco and Firearms, precursor to the TTB. "They're all standard wine, and if you use any coloring materials, it's no longer standard wine."
The addition of colorings and flavorings, Gahagan explains, changes the product designation from table wine to formula wine such as wine coolers or fruit-flavored wine products, and such additives must be declared on the label by law. With respect to wine-related allergies and headaches, he adds that the triggers for such maladies are largely unknown, but it's far more likely the culprits are organic byproducts resulting from yeast or bacterial fermentation than chemical residues that might remain from the wine-making process.
Yet Monzain insists these chemicals are used in large-production wines, especially in the United States. "I had a former winemaker from one of the major wineries claim that animal fat preservative was added to their wine," he says. "But I won't give you his name." Monzain repeats Bernard's assertion, insisting some winemakers use penicillin, asbestos filters and glycol. When told the use of such substances in wine violates federal law, he is dismissive.
"You're not supposed to make phony dollar bills either," he says. "I say wines...mass-produced have been known to use those methods. I don't say they are using it."
"That is just all scare tactics," counters James Wolpert, chairman of the department of viticulture and enology at UC Davis. "To go down this road that says those guys are poisoning you with their products so buy ours because we don't poison you isn't a good thing to hear. Since they're saying that European wines are better, that aims directly at California's large producers...it's libelous."
Still, does dispensing false information to justify inflated prices violate Texas law? According to Lou Bright, general counsel of The Texas Alcoholic Beverage Commission, the Texas alcoholic beverage code has a rule stating that advertising may not be false or misleading in any respect. But he says he can't determine if Tony's retail materials and practices run afoul of that rule.
Monzain says any questions about his business practices amount to little more than persecution. "Again are you following up on Vichy collaborators or are you following up on finding out facts for yourself?" he asks, alluding to the French client government during WWII that collaborated with the Nazis. "This is basically a McCarthy witch hunt...Would we have 83,000 customers if all of those things were being done? I mean, some of those people would be real dumb to buy from us."