Merchants: Low Bordeaux 2008 prices 'destroy' value of past two vintages
April 21, 2009
Panos Kakaviatos, and Richard Woodard
The low prices of 2008 Bordeaux futures mean the 2007 and 2006 vintages are 'doomed', say UK and US merchants.
But there is a difference of opinion on either side of the Atlantic, with Americans bemoaning the loss of value of these vintages, and UK merchants cautiously welcoming the fillip low prices of the 2008s have given the market.
Washington, DC-based MacArthur Beverages is offering its remaining stocks of 2006 Bordeaux at half-price, selling at a loss after the pricing of the 2008s 'destroyed' the value of the 2006s.
'I am reliving the 1997 vintage all over again,' said store manager Mark Wessels, while another DC-based importer, Ed Sands said, 'It is more difficult to sell stocks when you have comparable bottles [the 2008s] at half the price.'
Christian Navarro, co-owner of Wally's Wines & Spirits in Los Angeles, also said lower prices for 2008 wines would not help.
'We bought heavily in 2005, semi-heavily in 2006, and less in 2007, but with these new prices coming out, we will have to devalue all these inventories.'
Meanwhile, in the UK, Armit CEO Ian Ronald described 2008 pricing as 'reasonably encouraging', but added that the company was unable to buy as much wine as it wanted because so little had been released so far – with some châteaux holding onto stock in the hope that prices would rise.
'[The Bordelais] are past masters at this,' he said.
'They're trying to encourage the market forward. It might well work for the top wines, but it certainly won't for the lesser wines.'
He added that some merchant offers were 'below what is commercially sane' and were almost certainly based on the dangerous gamble that sterling would strengthen against the euro.
'In a year or so, many of the merchants will still be here, but some will not, and therefore customers need to be careful of who they go to,' he advised.
Farr Vintners director Tom Hudson compared Latour 2008 at £1,590 a case with the 2007 vintage at £2,450. 'That kind of says it all – 2007 is doomed,' he said. 'It can only go down in value.'
Tom Mann of major merchant Bordeaux Index said it was still 'early days' in the campaign, with the market unlikely to find its true level until Robert Parker revealed his assessment of the vintage.
'There's a lot of 2007 still in the pipeline,' he said. 'But interestingly, a lot of châteaux have said they'll discount the 2007s if you buy 2008. There are a lot of deals flying around at the moment.'
Mann said Bordeaux Index had even managed to increase its allocations of certain wines, such as Léoville Barton, and had taken a stock position on certain châteaux after being 'pleasantly surprised' by the price.
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Is there always a problem for each solution with wine merchants ? It's been two months they ask for low prices on the 08...
Laurent Bourricaud
Decanter, or at least the merchants, got the point exactly wrong in the title of the article, "Low Bordeaux 2008 prices 'destroy' value of past two vintages." The value of the 2006 and 2007 Bordeaux vintages - in consumer's eyes - was destroyed by the greed of the Bordelais in setting the original prices far too high, and by the trade in acceptting those prices. 2008 is lower, but still not low enough. Only the foolish bought 2006 and 2007 Bordeaux.
A. Skroback, NYC, USA
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