Bordeaux 2007: will new markets cause a price hike?
April 3, 2008
Guy Woodward in Bordeaux
With reviews of the Bordeaux 2007s generally mixed, attention is turning to the appetite of the market for the wines - and their likely pricing.
The Bordelais themselves are conceding that the vintage does not have the appeal of preceding years, with the president of the Union des Grands Crus Patrick Maroteaux descibing it as 'difficult' yet 'interesting'.
'We believe it will contain many surprises,' he added.
While critics and buyers alike have picked out some highlights among dry whites, Sauternes and assorted Right Bank wines, notably Pomerol (most of the Medoc is still to be tasted), much will come down to the price of the wines.
'It's not a vintage for the long term,' said Decanter consultant editor Steven Spurrier. 'It's not a speculative vintage, so the prices have to come down.'
The role of the negociants and courtiers will be to try to rein in producers and make them set prices which reflect the vintage. But while all argue that a price cut is appropriate, few are convinced it will emerge.
'It's all very well us saying to chateaux that prices need to come down, but if there's market demand, the prices will reflect that,' said Patrick Jestin, chairman of negociant giant Dourthe-Kressman.
'Ultimately, the chateaux listen to the market, not to the negociants.'
Many negociants are concerned about the lure of emerging markets, and their impact on the market in general.
Bill Blatch of negociant Vintex is 'worried', he says. Start-up companies are looking to supply the emerging eastern markets with 'whatever is on offer, at the prices their customers will pay'.
The chateaux have no loyalty, he says. 'If we miss a vintage, we risk losing our allocation next year, even if we've bought for many years.
'But these start-ups can afford to buy because they don't sit on stock - they move it straight on to places where there's new demand, and that drives up prices. It's a worrying, unsustainable situation.'
With the weak dollar precluding much American custom, US merchants are notable by their absence.
The high value of the euro is also likely to drive away many UK buyers, according to the courtier Max Lestapis. 'There's less interest from the US and UK than normal, and prices will have to come down, particularly at lower levels,' he said.
Some commentators even warned of a repeat of the inflated prices of 1997, when the Bordelais overpriced a mediocre vintage.
'This looks like 1997 all over again,' said Geoff Labitzke of San Franciso distributor The Estates Group.
'The owners are saying the same things they said then. They are not going to lower prices by much. They have other markets in Asia and Russia, and that will be a problem for us {in the US}.
But Jestin said such a scenario was unlikely to be repeated.
'1997 was a less good vintage, was too highly priced, the economy was strong and the millennium was coming. Now, the economy is weak, and the US is no longer an option as a final destination for these wines.
'So the question is whether Chinese, Japanese and Russian customers will take up their options in what is an average vintage.'
If they do, prices are likely to be only marginally lower than in 2006, if at all.
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Having lived in Singapore for 6yrs, Japan for 5 before that and spending considerable time in China, Hong Kong, Korea, Thailand and Taiwan, I seriously think the supposed demand originating from the Far East is seriously inflated to keep the market up. Fine wine is still a relatively rare product and high sales growth from a low base doesn't mean much to global demand/supply.
Rob Perman
..."in what is an average vintage". Do you mean the least attractive in many many years? 2000, 2003 and 2005 were all vintage of the century, 2006 almost, 2001, 2002 and 2004 were "classic"...2007 is "average"...political correctness...
Antoine Songeur
I, for one, have no intentions of purchasing any red wines from this vintage if the prices reach even that of 2004. There is still a lot of 2004 Bordeaux available and I really like these wines. Of course, if I want to spend serious money this year, I am currently being bombarded with offers for 2005 Bordeaux - some of which I am taking up. Sure, if the price is right, I may pick up a bit of Sauternes or well-priced whites like Latour-Martillac, but for reds, forget it unless we see prices in line with other poor vintages like 2002. If the Russians and Chinese are foolish enough to pay serious money for mediocre wines, let them; I'm sure the chateau owners will put their wasted money to good use...
Dave Marra, Ireland
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Having lived in Singapore for 6yrs, Japan for 5 before that and spending considerable time in China, Hong Kong, Korea, Thailand and Taiwan, I seriously think the supposed demand originating from the Far East is seriously inflated to keep the market up. Fine wine is still a relatively rare product and high sales growth from a low base doesn't mean much to global demand/supply.
