American belief in great en primeur 'shaken and probably destroyed'
November 3, 2009
By Panos Kakaviatos
There is considerable doubt amongst American merchants as to how they are going to sell the new and apparently stellar 2009 vintage.
Wine merchants will buy 2009 Bordeaux futures, but they say that previous vintages are unsold, the economy is uncertain, the exchange rate unfavourable – and they doubt Robert Parker can score it higher than 2008 anyway.
Michael Glasby of the American retailer Premier Cru in California predicts that 2009 Bordeaux wines will have to 'fight for their place more fiercely than all the previous ”vintages of the century”.'
He told decanter.com, 'The conviction that en primeur in a great vintage is always worth buying has been shaken and probably destroyed.
'There are many [2008s] still available at their initial level and plenty of highly-rated 2006s and even 2005s available at no more than their initial release price.'
In the midwest, merchants predict a difficult sell, despite or even because of the claims for 2009.
Thomas Keim of The Vino Source Corporation in Minnesota said, 'I see an incredibly soft market for both 2008 and 2009 – especially in the Midwest.'
With the market for wines over US$40 'almost non existent because of the economy', Keim said consumers are 'sick and tired of hearing “vintage of the decade” for what is now the fourth and fifth great vintages of the decade in 2008 and 2009.'
Others, such as Gil Lempert-Schwarz, chairman of The Wine Institute of Las Vegas and consultant to New York-based wine auctioneer Acker Merrall & Condit, say that Robert Parker 'has run out of points'.
'When you score a wine 98-100 [Château Lafite Rothschild] and a greater wine comes right after, what to do? You're out of luck unless you “downgrade” the 08s and then “make room” for the 09s.'
The recent decision by Diageo – self-described as the 'world's leading premium drinks business' – not to buy Bordeaux futures will also make sales more difficult, according to Chris Adams of the retailer Sherry-Lehmann in New York.
'Diageo was a significant factor [for futures buying], and its departure from Bordeaux will have a huge impact on the market,' Adams said.
Importers who buy directly from Bordeaux negociants see Diageo's exit as 'an opportunity to obtain more allocations' in 2009, but worry over excessive price increases.
'I hope producers show some restraint in their price increases and that they will release good quantities at first tranche, given the weak economy and exchange rate,' said Mark Wessels of importer MacArthur Liquors in Washington DC.
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Most professionals would agree that 2008 was a surprisingly good
vintage, with some lovely wines, but not a great one. 2009 is
undoubtedly a great vintage - unless, like us, you were hailed on in
May. Gavin Quinney, Chateau Bauduc
The news that the US might be falling out of love with the en primeur / futures system has to be good for genuine Bordeaux lovers who have been excluded by hyped prices from buying their favourite wines. It will also - on a tough love basis - be good for many Bordeaux wine producers who may finally have to learn how to interact with customers on a more direct basis, rather than abdicate the responsibility to a a handful of journalists. That's not to say that some form of en primeur system will not, or should not survive. Plenty of other regions, from Burgundy and the Rhone to Napa and Barossa have producers who successfully offer and sell their wine in barrel. But none of these areas has created the mad annual circus of the spring en primeur campaign in Bordeaux when buyers are confronted with varied and potentially unrepresentative samples of wines that are - as their producers often acknowledge - at a stage of their evolution that makes them very hard to judge.
Of course, rumours of the death of en primeur may be as exaggerated as news of a comprehensive post-crunch clean-up of Wall Street and an end to the crazy bonuses that incidentally helped to fuel the boom in crazy Bordeaux pricing. Even if the US doesn't regain the taste for buying in this way, there's a chance that China will take up the slack - especially given the Chinese taste for gambling. But it would be a mistake to underestimate the cleverness of the new wine fans in Beijing and Shangai. They will be well aware of the withdrawal from the market of a big, savvy player like Diageo, and of the weakening power of the critics' points and, like diners who hesitate before entering an empty restaurant, they may choose to sit on their money. A little of that kind of sanity would do the wine world a lot of good. Robert Joseph
Today's modern wine trade buyer is looking for good representation of an estates respective terroir and fair pricing. No longer will wineries be able to gouge the market with inflated image margins. An image margin in wine is the extra margin in the price built on the owners's self-perceived glorification for their own product. Typically, this is encouraged by a critics review. Well-informed trade buyers can see right through this…and they should, since they are just as accomplished in the developments of their own palettes as a Parker reviewer.
The evidence for high image margin wine not selling is especially seen in California, where top producers are slashing prices because they have back inventory building. Our belief at Hedges Family Estate is that wine prices are determined on the summation of consistent quality from one vintage to another, and not one built by the media. Word of mouth about the quality-to-value ratio is a wineries best long-term strategy for selling vintages. Why focus your marketing efforts to a few media wine critics, when you have a huge ocean of professional buyers who can judge for themselves.
The en primeur fiasco of setting prices based off wine critic's reviews, often at ridiculous levels, will soon end. This seems like just the greedy tragedy the industry needs for reevaluation of wine pricing. It is sad that it takes a recession for people to realize it. Christophe Hedges, Hedges Family Estate
I doubt very much that the En Primeur market will ever die, however I fully agree with Mr Joseph when he mentions "the weakening power of the critics' points". The whole concept of whether to buy a wine based on Mr Parker's score has got rather out of control. I will forever doff my cap to his wine tasting skills but surely a wine buyer should not rely on his points alone. Might the old adage of if you follow the flock you step in the sh*t apply here?. What will happen when he joins the great majority!
A private collector should follow the advice of his or her wine merchant, afterall that is what they are there for, in many cases have been doing for centuries, and it is they who ultimately have to put their money where their mouth is. Edward Pilkington, Dorset
Of which American belief were the merchants speaking? Those of the few Wall Street bonus babies who could afford to play that game? Certainly not those of us who are not getting bailed out by a profligate and irresponsible government. In any event, the "American belief" has been shaken, but not stirred. The en primeur market will revive; the Dutch did not stop growing or buying tulips in 1649, they just priced them to market. Lewis C Taishoff
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