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| September 13th 2007 |
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| Beginning of a new era in Bordeaux |
by James Lawther MW
It was clear that the 2006 Bordeaux vintage was going to be anything but easy.
Yields were down and there was little stock of older vintages on the market. Meininger's Wine Business International followed the play as it unfolded.
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As the 2006 Bordeaux futures campaign drew to a lengthy close, it was clear that this year’s carnival ride had been anything but smooth. Prices remained high (down 9.4% overall on 2005 for the 265 châteaux on the market at the beginning of June), the Americans were notable by their absence and, excepting a limited number of well-established grands crus who hit the correct price to quality button, onward sales from Bordeaux proved difficult.
“It’s been a campaign using forceps,” comments one well-informed insider. On the back of the 2005 vintage and with a difficult harvest (rain and rot) 2006 was never going to be an easy sell.The en primeur tastings at the beginning of April, however, indicated that quality, if not at the level of 2005, was selectively there and with some better than expected scores from Robert Parker and other commentators, a glint of optimism appeared in Bordeaux.
The question was: would release prices return to something like the level of 2004 to allow the ‘value’ aspect into the equation and healthier margins in the chain of distribution? As the first prices appeared at the beginning of May, the answer was plainly ‘no’. “The châteaux have clearly decided to consolidate and treat 2005 as the beginning of a new era rather than an exceptional vintage, hence prices have carried through to 2006,” laments Bill Blatch of Bordeaux négociant Vintex. Fuelling the pricing strategy was the perceived absence of back vintages on the market and the possibility of a smaller crop in 2007 due to coulure. A flurry of buying of older vintages, particularly from Asian markets, due to the success and price of 2005 has indeed reduced stocks and, of equal consequence,increased their value, but not everyone was willing to follow this line.
“The classed growths are kidding themselves if they think there’s no wine on the market. Apart from the stronger brands like Léoville-Barton, there’s still plenty of wine in Great Britain and the United States,” says Sebastian Payne MW, chief wine buyer for The Wine Society in the United Kingdom.
As a result, the campaign ran at two— if not three—speeds, with classic brands at a good price selling well through Bordeaux and onwards. A second group of châteaux sold to the Bordeaux négociants.And then there were those that did no business at all. Châteaux that sold well provided the full package of reputation, quality, Parker points and, of most importance, an attractive price.
"The point of en primeur, which people tend to forget, is that prices should be less than wines that are physically available in bottle today. The percentages between release prices don’t matter a dot,” explains Stephen Browett of London merchant Farr Vintners. Château Lynch-Bages was one of the runaway successes of the campaign (“We sold 500 cases in 24 hours”, says Browett) and |
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News Analysis |
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Page 2 of 2 |
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a bright example of a successful pricing policy. The prix de sortie on the Bordeaux market (La Place) was €34. This was more than the 2004 (€22) and less than the 2005 (€42) but,critically, was less than the cheapest bottled wine on the market today, which happens to be the 2004 at €40.
This type of pricing allowed margins for distribution and the possibility of offering the consumer an attractive price. “Our concern is always twofold, to maintain the reputation of Lynch-Bages and ensure that there’s good distribution of the wine around the world,” explains its managing director Jean-Charles Cazes. Other châteaux that followed the same policy and were successful included Beychevelle, Calon-Ségur, Carbonnieux, Domaine de Chevalier, Lagrange, Léoville and Langoa-Barton as well as Talbot. The Right Bank was less in evidence, but Larcis-Ducasse, Pavie-Macquin and Clos Fourtet were all deemed good value.
At the time of writing, some of the ‘must haves’ and Super Seconds were beginning to appear. Château La Conseillante at €60 was selling without problem,while Montrose and Pichon Baron looked measured in their pricing. The first growths were expected to be expensive, and came out in line at €270. For many, this was close to 2005 prices,but merchants still fell over themselves to acquire an allocation.
Elsewhere, wines moved slowly through the system. Château Rauzan-Ségla had sold 60 percent of its 2006 by mid-June, but with a price tag higher than the available 2004, 2003 and 2001 was less courted overseas. Château Gazin at the same release price as the 2005 was eventually taken up by the Bordeaux négociants, but again was less sure of a market elsewhere. Unbelievably,Château Cantenac-Brown 2006 at €36,50 was double the price of the 2005 at €18,50. Consequently, there was no business here.For the majority of the petits châteaux that work through the Place de Bordeaux, business was sparse. For many,though, it was not a particularly good vintage and there was little incentive for either the shipper or consumer to buy before the wines are released in bottle.
“My prix de sortie was less than in 2004 and 2002 and I’ve only sold 35-40 percent of my 2006, but I’m told that is considered good this year,” says Thierry Valette of Clos Puy Arnaud in the Côtes de Castillon. Where, then, have the wines been selling if there’s been onward distribution? “The French and Belgian supermarkets have been buying heavily and otherwise the traditional export markets like the United Kingdom, Switzerland and Scandinavia have purchased,but with less enthusiasm than in 2005,” says Erik Samazeuilh of courtier Tastet & Lawton.
Heiner Lobenberg of Gute Weine in Bremen, a leading German en primeur merchant, was more upbeat. “After a long period of bitterness, my clients have grown accustomed to the higher prices for the top 50 growths. I’m following through on all of my allocations and even increasing some.” A little has gone to Asian markets like Hong Kong, Taiwan and Singapore. “This is mainly to secure stocks, as these countries are new to the en primeur game,” says Thomas Smith Knudsen of Bordeaux négociant Beyerman who run an office in Hong Kong. ‘It’s a very hot market,’ said Nick Pegna, managing director of Hong Kong‘s Berry Bros, who has many interested, but inexperienced, Asian buyers. Fair value is not yet discussed a lot in Asia, but as knowledge levels increase,consumers there will begin to behave like classical consumers elsewhere.
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