It’s Time to Get Real

The practice of selling Bordeaux soon af ther vintage is no longer helpful for consumers or the wine trade.

Bordeaux’s wine industry was once a big family. The finest chateaus acted as the locomotives for the Bordeaux train, pulling the lesser estates along behind them.

No longer. Bordeaux has reached a crisis, where the locomotives have uncoupled from the train and are charging ahead on their own. The top wineries follow such distinct and individual business models that they can no longer be considered part of the same market as the rest.

During the 2012 en primeur week in early April 2013, Arnaud de Laforcade, Château Cheval Blanc’s chief financial officer within the LVMH luxury stable, admitted the change.

“We are moving from wine as ‘noble agriculture’ to ‘luxury goods’—whether you like the words or not,” he said.

I’ve been tasting Bordeaux en primeur for 25 years. Nobody tasting the 2012 wines in April would consider them investment worthy. They will never appreciate in the way some past vintages have (2000 and 2005, for example). These are wines to drink, as you can read in my free online reports on close to 300 barrel samples.

Within a week after the tasting, enough estates released prices that the split was obvious. First growths Margaux and Mouton released their wines at €240 a bottle ($312), while Lafite released its at €315 a bottle ($409). Bear in mind, these prices are from the chateaus to the négociants, not the retail price.

Though these prices are the cheapest since the 2008 vintage was released, look at these: Rauzan-Ségla, a fine Margaux property, released at €36.50 ($47); Lynch-Bages, always a favorite, released at €60 ($78).

Is a bottle of Château Lynch-Bages really only worth a quarter of the price of a bottle of Château Mouton-Rothschild, a near neighbor in Pauillac?

Bordeaux is a peculiar market, as the top chateaus do not sell to the world directly, but through négociants. As the world’s largest wine market, thousands of offerings, not just the ones I tasted or the top 50 or so you hear and read about, are traded on La Place de Bordeaux, the equivalent of the Bordeaux wine stock exchange.

If the current system of La Place continues, then so should the en primeur system, but with one important modification—a small change that would help 99 percent of Bordeaux producers and consumers.

Exclude the first growths (and others who think they should be first growths) from being sold en primeur. The wines I’m talking about are Haut-Brion, Lafite, Latour, Margaux, Mouton and Yquem, plus Angélus, Ausone, Cheval Blanc, Cos d’Estournel, Ducru-Beaucaillou, Léoville-Las Cases, Pavie and Pétrus.

These producers distort the system by charging prices that bear no relationship to the rest of the market. And it’s no coincidence that companies whose main focus is selling high-end brands own some of these properties.

Cheval Blanc and Yquem, owned by LVMH, for example, are opening ultra-luxe accommodations at their wineries.

Latour, owned by one of France’s richest men, François Pinault (head of luxury company Kering), pulled out of the Bordeaux en primeur system beginning with the 2012 vintage. It plans to hold wine back until the market can absorb even higher prices.

These “Power 14” steal the headlines from the remaining chateaus, even though major names like the Left Bank’s Pontet-Canet and Léoville-Barton, and the Right Bank’s La Gaffelière and Beau-Séjour Bécot, still charge reasonable prices, in line with their quality.

And they completely mask the hundreds of chateaus that show good value wines each year at the en primeur tastings.

This price differential between the first growths and the rest, plus stock manipulation through tiny releases during the en primeur season, is the bottom line.

In vintage 2000, Lafite was released at 2.8 times the release price of Lynch-Bages. In 2012, the differential is 5.25 times. It’s no longer the same world, and the first growths and their counterparts should not be part of it.

If they were not, then maybe we could get back to what Bordeaux should be about: red wines that are delicious to drink and worth cellaring for fun and family.

Published on May 28, 2013
Topics: BordeauxFrench WinesWine Trends