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Bordeaux prices rise
September 10, 2007
By Sophie Kevany
Average prices for Bordeaux are rising, the Bordeaux AOC Winegrowing Union says.
Describing the upturn as 'a wind of hope', the Syndicat Viticole AOC Bordeaux et Bordeaux Supérieur said last Friday (7 September) that as supplies of wine have fallen, prices have risen.
Prices prices per 900l tonneau in 2006/2007 are gradually rising, and unwanted stocks are diminishing, according to the Union, which is the largest in the region, accounting for 60% of Bordeaux exports and 66% per cent of domestic consumption.
These elements are supported by reports of a small volume harvest for 2007.
Prices, which for many years held at an average €1,100 per tonneau, dipped to an average of €835 per tonneau during the 2005/2006 sales campaign.
Figures for August to July 2006/2007 showed a rise in prices of 5.3%, and an increase in sales volumes of 15%, the Union said.
The price per tonneau now stands at an average of €880, said Union president Bernard Farges, who noted this was still a far cry from the €1000 minimum necessary for profitability.
Farges also noted that arrachage (grubbing up of vines) and crisis distillation measures had also played a role in rebalancing the market.
The challenge now, he said, is to maintain the supply and demand balance and not, as American pig farmers tend to do, fall into the notorious 'hog cycle'.
The hog cycle is a phenomenon of American agribusiness, describing a pattern whereby higher profits for pig farmers lead them to rear more pigs, which causes prices to collapse as the glut hits the market. The farmers then decide to rear fewer pigs, and later when the pig shortage hits the market profits rise again.
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