Bordeaux sales damage

[Andy Velebil]

As we've talked about recently seems BDX has indeed gone too far and now the backlash has started. Oh well, can't say they don't deserve it for being so greedy.

Speaking to db, Corney & Barrow MD Adam Brett-Smith said of 2011 Left Bank Bordeaux, “Unless they do something of unbelievable drama there is going to be no interest at all.”

Referring to Bordeaux pricing of the 2010 vintage, he added, “As so often in Bordeaux, they pushed it too far, so there has been a correction.”

http://www.thedrinksbusiness.com/2011/1 ... -bordeaux/

[Roy Hersh]

When a wine region decides to go from mainstream affordable (1980's-1994), then turns hoity toity (1995-2004) and then heads into a stratospheric priced luxury item far out of reach for most consumers, (2005-date with 2010 futures being ridiculously priced) ... it is more than the Robert Parker scores that are to blame.

Those that were not old enough to buy Bordeaux pre-2000 vintage, have no idea how affordable that juice was at one time. Sure you can buy some non-Cru Classe bottlings even from 2009/2010 at prices <$75.00, but 1st through 5th growth wines are no longer affordable for the typical wine enthusiast. Even ardent fans of Claret who were long time buyers en primeur are pretty much priced out of the market these days for the names that used to be in reach. How this will affect the young wine buyer who is now emerging, or the next generation ... unless there is an unlikely major correction ... is anybody's guess. But my dollars have long ago walked to other wine regions that offer far better values, like the Douro!

When you see 2010 prices come out (directly on the heels of 2009 Clarets actually hitting the marketplace) like:
Cheval Blanc @ $1250 (96-98 RP), Ausone @ $1699 (98-100 RP), Pichon Baron @ $205 (97-99 RP) ... congrats to C. Seely! : ), Cos @ $289 (RP 95-97 RP), Margaux @ $899 (96-98 RP), Ducru @ $229 (RP 96-98), Haut Brion $899 (98-100 RP), Latour @ $1199 (98-100), Palmer @ $289 (95-97 RP) and Lafite @ $1299 (98-100 RP) ... then you have to start wondering if Bordeaux isn't just pandering to the elite, super rich and Asian markets!?!?

Is that a sustainable strategy? We'll see.

I doubt many on this Forum will be buying much in the way of the aforementioned 2010 Bdx gems. Not when there was so much quibbling over the prices of "1st and 2nd growth" Vintage Ports @ $60-85 USD, like 2007's when they were coming to market in 2009.

When I looked over the breadth of 2010 en primeur prices I received, not just the blue chips above ... but the whole gamut, I then naturally checked the RP scores too. What I found striking was how high Parker's scores were for this particular vintage (I won't even "go there" with 2009's). It made me question if this was his swan song vintage with rating Bordeaux and his farewell present to some of the producers.

[Eric Ifune]

I remember when the 1982 futures came out. People were astounded at the prices. They were used to the 70's prices. Then the 1996 prices came out, people were astounded again. Then the 2000's and people thought they couldn't get any higher. Since then the 2003's then the 2005's, and now the 2009 and 2010 have continuously raised the bar. While new markets (Asia) have opened, the number of buyers have decreased. Speculators have also made an appearence. Grand Cru Classe Bordeaux have now reached the status of Ferrari's. Their problem, I think, is they make too much product to maintain such prices.

[Andy Velebil]

Bordeaux has basically shut out the younger and newer wine drinker. What effect this will have on their future isn't good. With so many other wine regions making top quality wines at far cheaper prices there is now a whole host of newer wine drinkers that will never experience BDX early in their wine drinking careers, instead focusing on other regions. Not being 'raised' on BDX like so many older wine drinkers were, they won't associate BDX with being the pinnacle of wine making. It will just be another overpriced and over-hyped region which they will continue to tune out while focusing on other regions.

Not to mention older wine drinkers that now take their money and spend it elsewhere, as Roy also mentioned he has done. They're living off their old long term hype of being the best, the benchmark. It's inevitable they will falter of they continue down the path they're on.

[Brian C.]

Having enough people who will pay seemingly any price for your product is a great problem to have. As a consumer who is big on value, it is certainly mind boggling, but markets are not always rational. China has drastically altered the market for Bordeaux. Seemingly no other region matters. There is very little, if any, real price relationship when comparing Bordeaux to other regions, save for a select few items like DRC. If/when China's economy contracts, we will probably see Bordeaux prices come back in line and have more correlation to other regions. Until then, this is the market we have today, whether we like it or not.

As for Bordeaux, even if they offered first growth wines at what many here might consider a fair price, they are going to be scalped on the open market by plenty of opportunistic buyers. Why should the producers allow anybody else to capture this profit? If the bubble pops, the producers will make the necessary adjustments. I'm guessing many will be thrilled if/when prices ever come down to Earth, and plenty of people who have missed it will be clamoring for it anew. How much have the production costs changed since prices have taken off in earnest? If the producers are paying a lot more to make and market the wine these days, then that could be a problem, but otherwise, what else could happen?

[Tom D.]

Clearly the pricing of top growths, and many middle growths, has far out paced not only the ability of Bordeaux lovers to pay, but also the actual quality of the wine. Their is nothing about anything I've tasted from these recent vintages that, in terms of quality alone, can justify current pricing compared to older vintages. When the ultra-high end and status-seeking buyer disappears, due to either the economic cycle or the fickle nature of such demand, the real Bordeaux lovers will not step in and pick up the slack demand.

So the bubble will certainly burst, and it will lead to much more than a simple adjustment by Bordeaux producers. By the dozens they will, as they have in past cycles, be forced into failures or distressed sales. They have been running up debt at alarming rates, investing in infrastructure that can only be supported by outrageous pricing. And when that pricing drops, it will have to drop dramatically to bring back buyers. Bust cycles have traditionally hit the bordelais very hard, and the next downturn may be the most severe yet, especially if you throw in the unprecedented overall dysfunction of the European economy and banking system.

[Roy Hersh]

There hasn't been a true bust in the Bdx cycle in nearly 40 years.

[Tom D.]

There hasn't been a true bust in the Bdx cycle in nearly 40 years.

Roy, do you think that means we are overdue for one? Or that Bordeuax has become immune to cycles?

My opinion is we are struggling to recover from a recession of historic severity, so it's not inconceivable one more economic shock (like the oil shock of the 1970's) could push Bordeaux over the edge along with a lot of other markets.

[Moses Botbol]

Grand Cru Classe Bordeaux have now reached the status of Ferrari's. Their problem, I think, is they make too much product to maintain such prices.

That and counterfeit bottles.

[Ray Barnes]

Here's some more sticker shock. I seem to recall all the 2010 First Growths came out at 600 euros ex-negociants, except Latour came out at 780 euros. And it gets worse:
http://www.decanter.com/bordeaux-2010/e ... ne-tops-1k

I hope this link works.

[Andy Velebil]

Here

Each year, there will be approximately 100,000 cases, or 1.2 million bottles, from the top 8 Bordeaux estates: the left bank first growths Haut Brion, Lafite, Latour, Margaux, and Mouton, plus the right bank wines from Petrus, Ausone and Cheval Blanc, and adding the premier first growth in Sauternes, Chateau d’Yquem.

That's a huge amount of very expensive wines from a small handful of producers.

[Ray Barnes]

I believe Bordeaux needs to replace its 1855 Classification with the following price categories:

vendez le chien (sell the dog)
vendez l'auto (sell the car)
vendez le maison (sell the house)
vendez l'enfant (sell the kid)
vendez toutes les choses (sell everything)

[Andy Velebil]

I believe Bordeaux needs to replace its 1855 Classification with the following price categories:

vendez le chien (sell the dog)
vendez l'auto (sell the car)
vendez le maison (sell the house)
vendez l'enfant (sell the kid)
vendez toutes les choses (sell everything)