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Paranoia in Bordeaux
Early this morning, Maria Miller, a British government minister, finally bowed to the inevitable and resigned. A politician who had been vocal in calling for transparency over members of parliament's expenses in 2009 had been been found to have over-claimed £5,600 or £45,000 (depending on who's counting) more in her own expenses. For several days before she accepted her fate, Ms Miller's supporters had vainly tried to claim that the media was unfairly treating her as a scapegoat. This position was somewhat undermined by the fact that many in her own party were as critical of her as any journalist.
An hour or two later I read that Christian Seely of Chateau Pichon Baron was complaining about a "concerted effort" to undermine the 2013 en primeur campaign and "to talk the vintage down in the press"
To be fair to Mr Seely, a clever man I really like and respect, he was facing a tricky task. His chateau has, I'm sure, made a pretty decent 2013, especially given the challenges of the vintage, and he's played the game - at least partly - by reducing his prices by 17% against the 2012. But, and it's a huge but, he needs to sell some wine. And that means saying stuff that he certainly might not be saying if he on the buyers' side of the desk.
If 2013 has had a poor press since the time of the harvest, that might have just a little to do with some of the comments that were made by producers at the time. British-born Gavin Quinney, owner of Ch Bauduc, and a contributor to jancisrobinson.com said that 2013 was the worst vintage he could remember and that "the reds will be extremely variable at all price points". Stephane Derenoncourt bluntly called it a "shit vintage" and Michel Rolland told Decanter.com that 2013's were "drinking wines... not for ageing". Visitors to Bordeaux during the harvest returned with horror stories of ugly, rotten grapes.
But the people who really matter are the ones who are going to are being asked to buy these wines and, as Liv-Ex reveals, over 70% of the professionals who have tasted the first growths ranked them as fourth or fifth in quality when set alongside 2007, 2008, 2011 and 2012. While a few chateaux have bucked the trend and produced really high quality, long-lived wines, they are the exceptions to a rule in which 2007-like "restaurant-wine" is actually something of a compliment. Mr Seely acknowledges that the previous four vintages have all dropped in value since they were released en primeur. He boldly suggests that this one will buck the trend. Maria Miller's supporters may similarly believe that she will bounce back after her present travails. I wouldn't bet on either. However good the best 2013s, I cannot see any reason to buy them in barrel today when I could spend my money on older wines in which I have reason to believe.
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Totally agree. Two other points: 1) Christian Seely's Châteaux always make the best possible wine, so although they will have outperformed the average in 2013, so they do every year - the price drop needs to reflect the vintage, not their winemaking abilities. 2) What on earth will the producers do if 2014 turns out to be a stunning year? They won't be able to 'only' increase their prices by the amounts they have reduced this year, and they will be faced with the same problem that happened previously - high quality vintages with some age will be available for less in the market, making it pointless to buy en primeur even great wines. They should reduce the prices of the 2013s to what they are worth as wines. Which is a minuscule fraction of what they are charging.
ReplyDeleteI think "minuscule fraction" is a little hyperbolic, but your point about the 2014 is well made. My objection is to the way that even people I like and admire seem to think it normal to expect everybody happily to play a game whose rules they the Bordelais have devised
ReplyDeleteI think that essentially the problem is this:
ReplyDeleteUp until, say, 2008, the chateaux sold their wines for very reasonable prices, and the people who made all the money on great vintages were the negociants and speculators.
In 2009 and 2010, the Chateaux all decided that they wanted a larger slice of the pie, and hiked their prices significantly (money which they are now spending on new wineries), and released a smaller proportion of their wines, holding back more stock for second and third tranches.
The system that supported the market in the past relied on negociants and wine merchants putting their money where their mouth is year after year, and financing stock. Often the wine DIDN’T appreciate in value, but what stockholder lost on poor vintages was subsidised by the substantial gains they made on the vintages that DID appreciate in value. (I remember buying up (for Sainsbury’s) loads of the delicious, short-lived, but attractive 1997 vintage at 40% below the release price, as negociants released funds to allow them to spend big on the much hyped 2000s)
After 2009 and 2010, Chateaux started to believe their own hype, and that the intrinsic worth of their wine was a great deal higher than it had been in the nineties and early noughties, and are still refusing to drop the prices back to a sensible level that will see all of their wines sold. The end customer does not want ‘pretty’ wines at investment prices, so why on earth should negociants and wine merchants continue to support the system by holding stock for the long term when these wines are very unlikely to appreciate in value?
Up until now, the ecosystem of Chateau, courtier, negociant, shipper, auction house, speculator, end drinker, has proved robust enough to survive decades of change, with, over the medium-term, enough in it for everyone to remain bought in to the concept.
If the Chateaux get too greedy, it seems to me that the system of the Bordeaux ‘place’ is in danger of breaking entirely, and with more and more Chateaux looking for more direct routes to market that give them more control over their pricing, image and profitability, this dysfunction is likely to get worse. Wouldn’t it be fascinating to know in whose hands the ownership of the stock of the 2011, 2012 and 2013 vintages now lies? Are the Chateaux left with a huge amount of unsold stock, or have the negociants obediently soaked it all up at the asking price, and are waiting for the next up-cycle to cash in?
I predict that the ‘place’ will survive, that Chateaux will drop their prices on the quiet to negociants with plenty of cash, and a long view of the investment cycle, and that there will be another ‘shortage’ in 4-5 year’s time when the next vintage of the century comes along.
Characteristically incisive Justin. From what I hear, those 2011's and 2012's and definitely 2013's are chez the negoce who are now selling at a discount. Whether the chateaux are funding any of the discounting is not clear, but it is not coincidental that several negociants are for reportedly for sale, apparently at prices that cover little more than the value of their stock.
ReplyDelete