Bordeaux 2008: First Growths tipped for 100 a bottle as market takes control
March 31, 2009 Adam Lechmere and Guy Woodward in Bordeaux
After decades of ruling the markets the Bordelais are finally facing the fact that this year the market is in control.
The first taste of Bordeaux's 2008 vintage has begun against a backdrop of nervous uncertainty from producers.
As en primeur week gets underway, conversations from St-Emilion to St-Estephe start and end with money. And there are signs are that the chateaux owners are adopting a more defensive, conciliatory position on pricing.
Pomerol kingpin Christian Moueix, speaking as head of the long-established negociant family of Jean-Pierre Moueix, spoke of the need for the chateaux to work with the market.
'We are already seeing an attitude adjustment from many chateaux it's an opportunity for wine merchants to impose themselves,' he said, hinting at the possibility of buyers regaining the balance of power.
He also said that chateaux in a strong financial position might not need to sell en primeur pointing out that out of 11,300 producers in bordeaux, 10,000 don't use the system. 'It's not a disaster if you don't sell en primeur. This year we may see more [leaving the system].'
At Chateau Angelus in St-Emilion, owner Hubert de Bouard suggested otherwise.
'It's never a good thing when you're not in the market. The world is open now. A buyer can say, Ok, I'm in Italy next week I will buy Italian wines instead of Bordeaux.'
With early signs suggesting the vintage could be better than expected particularly on the Right Bank producers are desperately trying to focus the minds of visiting press and trade on the quality of the wines.
At last night's opening dinner, Sylvie Cazes-Regimbeau, head of the Union des Grands Crus, pleaded with the assembled press to 'help us make consumers love our wines', in a speech which referenced the financial climate, and hinted at a more co-operative commercial position from chateaux owners.
As ever, commercial rumours and hearsay are running riot, with speculation that the first growths will come out early as early as the start of May or Easter at bargain basement prices. Figures as low as 110 (less than half last year's release price), are being suggested.
Pierre Lurton of Chateau Cheval Blanc told decanter.com that their price would come down 'considerably.'
Chateau Margaux managing director Paul Pontallier, when asked if there was a possibility prices for first growths would be as low as suggested, did not rule this out.
'Every year we adjust our prices to the market. If the market condition requires it we will do it,' he told decanter.com.
Frederic Rouzaud, managing director of Pauillac Second Growth Chateau Pichon-Lalande, said he 'wouldn't be surprised if the First Growths came out at 100 a bottle'.
On the issue of the timing of release prices again the subject of febrile speculation Pontallier said, 'Many factors affect the date we set the price. Vinexpo (the Bordeaux trade fair in June) is not the most important factor this year. Will we set the prices earlier? It's an open possibility.'
At Chateau Latour, Frederic Engerer also hinted that the First Growths would come out early with their prices.
'When the markets tough like this, we should give the trade as much time as possible to devise their strategy,' he said. 'It would be the responsible thing to do for First Growths to come out early.'
But for all that, beneath the surface optimism, there are any number of producers who will testify to how difficult things are going to be this year.
One prominent Medoc producer said they were 70% down on visitors this year. Others have said that American visitors are as much as 50% down.
As for the Americans that are here, prices are all that matter. Hinting at a 50% reduction on last year would be welcome, Annette Alvarez Peters of giant American wholesaler Costco said, 'This is a better vintage than 2007 but we are making no decisions yet. It will come down to price.'
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It is absolutely clear at this point that the First Growths have to target the opening prices of their 2004's which were generally at 96 Euro First Tranche to the Market from the Negociants. Once they have done that and come out early, should that prediction hold true, most of the other wines that also have to sell, will have to "take it in the shorts", i.e. their prices are expected to be so much lower than the First Growths, they may simply be looking like bargain basement wines, at least compared to the previous 3 vintages. This in turn could stimulate big buyers like Costco, who by the way is a Retailer, not Wholesaler, to come back in the market and buy some good quantities. Otherwise, all these other wines, top to bottom, can look forward to being offered for sale in the French Supermarkets' Foire Au Vin (read: Fire Sale), which is so popular with the domestic consumers, and 2008 would be dubbed the Super Market Vintage of the Century.
Gil Lempert-Schwarz, Las Vegas, Nevada, USA
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Adam Lechmere and Guy Woodward in Bordeaux
