Opinionista Michael Fridjhon 27 March 2014

E-tolls, wine, and the cons they have in common

In the past six months or so – pretty much ever since e-tolling acquired an air of the inevitable about it – we've heard (mainly from ANC officials) why we should leap at the opportunity to keep on paying for the roads we've already paid for. Their arguments range from civic duty (the gentle guilt approach) to compliance with the law (the wrathful god message). This is much safer ground than the earlier discussions around the necessity for e-tolling in the first place.

Once the courts ruled that it was legal for the process to go ahead, they could comfortably gloss over the concerns which had been at the heart of the extended public campaign against the whole question of tolls in the first place.

But here’s the thing: the decision of the courts cannot – and has not changed – the central objection of those who will have to pay. Beyond the debate about whether or not road taxes should be diverted from the purpose for which they were originally designated (in other words, why should we pay tolls for “free-ways”), there looms the elephant in the room. If we agree that the highways needed the upgrade, and the fiscus couldn’t find the money to keep the heart of the South African economy mobile, why was e-tolling the government’s preferred method? And of course, we all know the answer. Everything from the costs incurred in installing the system, to those that will be spent on the collection of tolls, are a corrupt form of rent-farming. The high collection cost has everything to do with patronage: those who have been interposed into the system are the politically well-connected. The Gauteng Highway Improvement Scheme is nothing less than the ANC’s next generation Arms Deal.

The obvious way of raising the funds would be by way of an increase in the road tax. Here the authorities tell us that this would be inequitable – an expression, in the context of those using it, that rivals Hitler complaining about the Allies’ “aggression.” Suddenly it’s wrong for the folk who daily use the highways to generate the bulk of the country’s economic activity, and thus land up contributing the bulk of the country’s tax-take, to expect those who live elsewhere and enjoy the fruits of their labours to pay for the roads around Johannesburg?

However, even this should not be an impediment: it’s perfectly possible to levy a differential road tax on each and every province (and in fact, provincial legislatures could then request Parliament to do so, and thus help collect funds for the upkeep of the ever-deteriorating road infrastructure). In other words, if Gauteng alone had to pay for its freeway upgrade, this could have been achieved with a Gauteng-specific road tax. Without the gantries, without the edifice of the Sanral toll collection enterprise, without the endless disputes about duplicate number plates etc, the money would have kept rolling in from every side.

When someone goes to such extraordinary lengths for a less efficient and more costly solution, you just know the whole proposition is rotten to the core. This has nothing to do with public consultation (or the lack of it) – just as the arm’s deal had nothing to do with defence (as the collapse, decay and redundancy of most of those fateful purchases, and the failure to collect on promised exchange benefits has long since proved). Part of the problem for Zuma has been his relative lack of access to the patronage honey-pot enjoyed by his predecessor. Mbeki was able to reward his loyal camp-followers with a range of opportunities, from BEE deals to contracts. Zuma has had to be a lot more creative in a far less flexible environment, and the e-tolling set-up was perfect. An essential infrastructure upgrade, opaque and inscrutable, it was too good an opportunity to let go, even if it angered his alliance partners: where, after all, were they likely to go anyway?

What, you may ask, has this to do with the world of wine? From the Gauteng toll roads to the vineyards of the Western Cape is a distance measured in centuries, as well as kilometres. The answer lies in the fact that the human brain is a truth-seeking device and while, as individuals, we are often fooled, cumulatively, en masse we can smell a dead rat, even before it has begun to fester.

Just as road-users swiftly worked out that the e-toll programme had very little to do with an effective (and cost-effective) way of paying for the highway improvement, so consumers – at least in this country, approach wine-pricing with a healthy dose of cynicism. Over the years we have watched producers use price as a marketing strategy (hardly an original idea) and, as a nation, we have responded with gratifying caution. Of course, there have been exceptions. Tim Hamilton Russell and Eben Sadie, for example, seem to have maintained premium positioning despite regional and varietal competition. By and large, however, those who sought attention by over-the-top pricing have had to nurse their wounded egos while waiting for others to fill the gap.

The tactic works something like this: choose a price – an outrageous price; offer “limited quantities” of your oenological “treasure” for this extraordinary amount. Leave the punters and trade gasping for breath – and then announce you’ve sold out. Then take back orders for the next vintage. Those who have kept this up for any length of time have either wisely produced very little wine, and/or have announced from time to time that they are skipping a vintage because the fruit quality has not meet the high standards demanded by the super-premium positioning. Invariably they have deep pockets, so they can afford to hold back the stock to dribble onto the market, or keep it for their ‘library.’ They also offer it liberally at tastings. Deep in their hearts, they don’t value it at the price at which it has been positioned, which is why they know they also have to give it away.

In fairness, there’s no sensible way to price wine. At the trophy estates the owners cannot recover their annual running costs in wine sales: sure as hell they’re never going to be able to service putative debt, or the opportunity cost of the capital invested. This means – at least at that level – that selling price is a thumb-suck. How much will the faithful pay for the next near-miracle? If the very top end of the domestic market is somewhere between R1,500 and R2,000 per bottle (and I can think of several wines which are nominally priced at these outrageous levels), does this make the next tier (R800 – R1,200) “good value?” If so, are the R400 – R600 offerings the bargains of the vintage, a mere notch above distressed wine sales? When you can get a perfectly decent bottle for R50, and you can still taste the difference (and wonder why you should pay more) at R100, you very quickly stray into the weightless stratosphere, where it’s difficult to say what’s upside down, and what, if anything, can be done to leave you feeling grounded.

What you do know is when a producer is coming at you with the vinous equivalent of stripper and a feather, the intention is to distract what’s left of your rational mind. The bigger the boobs, the skimpier the garments and the more astutely the feather is manipulated, the easier it is to determine what is happening – and why. After that, it’s simply a matter of choice: to what extent do you need the illusion that it’s done for love, rather than for money? Some of the best – or at least longest-lasting – marriages are arranged alliances, precisely because ‘fit’ is less transient than romance and/or testosterone. Perhaps this isn’t a bad recipe for wine-buying. DM

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"A long habit of not thinking a thing wrong gives it a superficial appearance of being right and raises at first a formidable outcry in defence of custom. But the tumult soon subsides. Time makes more converts than reason." ~ Thomas Paine

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