Won't get fooled again

An adapted version of a column in the current edition of Meininger's Wine Business International

This is the story of a rather wealthy Hong Kong-based businessman we'll call Aaron (choosing a random name at the top of the alphabet).

Aaron is a regular En Primeur buyer, who places an order for a reasonable number of very top end wines every Spring. Like many other people, he did not get nearly as many bottles of 2009 as he would have liked, but overcame his disappointment and readily took the call from his regular merchant 12 months later. Demand for the 2010s he was told, was once again going to be high; he had the choice of drawing up a wish list with no guarantee of getting anything on it, or he could "buy forward". This option increased the chances of securing the wine, though possibly at a far higher price than he might want or expect to pay.

Aaron replied that he liked neither of these options. What he wanted, as a regular customer, was for the merchant simply to let him know what he could have and at what price. At this point there must have been a misunderstanding because the merchant presumed that Aaron was placing a firm forward order. A few weeks later, he phoned to say "I have some really good news! You're very lucky to have got all the wines you wanted, but I'm afraid they were a bit dearer than we expected". Aaron took one look at some of the prices and said "No thank you very much!"

"But you have to take them" came the response, "You ordered them."

"Surely", Aaron countered, "If I was so incredibly lucky to get them, you'll have a waiting list of other customers who'll be fighting to take those wines off your hands".

"You ordered them" came the obdurate reply. "You take them".

Aaron pointed out that his understanding of the law led him to believe that the merchant would have a very hard and expensive time trying to force him to do so, before finally acquiescing and taking half of the cases - and vowing never to have anything to do with that company again.

Aaron was not alone in not enjoying the experience of buying 2010 Bordeaux. Indeed, from what I understand, there are rather a lot of Chinese in Hong Kong and elsewhere who have not taken up their orders, not to mention a few high profile European merchants who have opted not to take up their allocations either.

The picture in 2011 is worse. Far worse. According to one negociant, this was "the worst En Primeur campaign in 30 years" with only 20% of the wine having found buyers. Call him or one of his competitors today and you might even be offered the latest vintage of some of the first growths that were so famously hard to obtain just twelve months ago.

"What I really resent," Aaron says "is being taken for a fool". And that is precisely the mood of many Chinese buyers. These are not unsophisticated people. Almost none of them adds Coke or any other soda pop to their Bordeaux and even if they can't speak English, they are often very well informed about what is being written and said about them in that language. When France's Nouvel Observateur revealed last year that "Asian millionaires' thirst for the best Bordeaux wines has sent prices skyrocketing, and the most prestigious Châteaux have been turning astronomical profits as a result.", they heard about it. When Time magazine article, in March 2011 talked of a "China-driven bubble" and offered various questionable explanations for the Chinese readiness to pay over the odds, including the story that the king of Thailand was prescribed red wine by his doctor, they heard about that too. Imagine what it feels to walk down a street and to overhear your neighbours gossiping about how much you've overpaying for your rent; that's precisely the way the Chinese are feeling today.

There are all sorts of reasons for paying over the odds for anything, as anyone in the luxury business knows, but essentially they all boil down to the buyer wanting or needing to make the transaction. 2009 Bordeaux was desirable wine, and like 1982 for a generation of new American wine drinkers, a great first step onto the wine ladder for Chinese novices. The "need" to buy 2010 and still less 2011 is far harder to demonstrate. It remains to be seen whether 2010 is or is not the finer vintage, as some UK critics claim, but without the head of steam 2009 received from Parker et al, it was not a must-buy. And certainly not at the prices that are being asked for 2011.

The recent Union des Grands Crus de Bordeaux  tasting at Vinexpo Hong Kong should give the Bordelais pause for thought. Two  years ago, a mass of Chinese tasters eagerly gathered to sample the 2006 and 2007 vintages; the words 'feeding frenzy' were used. This time, the wines on offer were 2009s. In other words, this should have been a very memorable event: the vintage of the century being presented in Hong Kong, the current hub of the wine world. And yet... it seemed to be far, far calmer than in 2010. The room was admittedly larger, so it was hard to judge whether there really were fewer tasters than two years earlier, but the fact that this was even being discussed speaks volumes; there certainly weren't more.

In the same building, in an admittedly far smaller room, Chinese tasters were queuing to taste examples of Grand Cru Chablis. In 2010, it is very doubtful whether the Union des Grands Crus de Chablis could have attracted any kind of audience. China was not interested in white Burgundy. Today it is. And it's increasingly interested in red Burgundies, white Germans, New Zealand Gewurztraminers and all sorts of  other fare.

If the producers in these countries treat the Chinese with respect, they may well find that the relationships they are building may last a little longer than Aaron's has with his London wine merchant.