Bordeaux 2011: Chateau Angludet first to release

Matthew, thank you for your long reply. But there is one terrible misunderstanding here: I do not think at all that speculators should benefit from the system. I do belong to those old fashioned people who buy Bordeaux to drink it because they love it. If I honestly told you here what I think of speculators decanter would probably refuse to publish it. So I completely go along with you. My first comment was more an attempt to analyze the consequences of a policy of high ex chateau prices for the en primeur system. And what you see now is more or less what I suggested: that almost nobody buys and the system comes to a halt. I do understand that chateaux don`t like speculators to make the profit. But if they come out with speculative prices themselves the customers won`t buy and everybody will lose.

Michael, thank you, I read the blog.

It seems to me that it is entirely consistent with the enor of my earlier post and particularly my closing paragraph.

His thesis is essentaily that the system rewards (and should reward (1) chateaux, becuase they achieve greater distribution through negotiants, (2) negotiants because they make a margin on the sale to the final constomer, and (3) the "final customer, who is the most important person of all, [because] he or she has bought the wine at a good price en primeurs, far cheaper than it would be were they to try to buy the wine at a later date."

It is clear that when talking about customers, he is talking about people who purchase wine to drink it.

Notably absent is any reference to your thesis, that the system must benefit the speculator. In fact, that thesis is contrary to the whole spirit of the article, because the reward to the consumer, who actually drinks the wine, is that it is purchased early and so at a good price. The consumer purchasing on the secondary market from a speculator enjoys no such advantage.

In fact, the article even discourages (by implication) the practice of purchasing to fund drinking, buy holding half your allocation and selling it for a profit.

I think the en primeur system is great, if the price accomodates consumers (not speculators) who are prepared to display the necessary faith and confidnece it takes to hand over a large sum of money for a wine still in barrell (and so its final characteristics and quality by no means certian), well before receipt.

That is the third component of the system and a fundamental component to make the system work. If the only, or even the chief, argument for responsible release prices is so that speculators can make a profit, then there is no case for en primeur.

The sad reality is that pricing low to reward consumers means the prices are also low enough to encourage speculation. Unless a stop can be put to that, it seems to me that the en primeur system is doomed. Why on earth, I repeat, should chateaux price anything other than at the level the market will bear, if the result of doing otherwise is that people profit from their labour and employment of capital, simply by buying low and then immediatly selling high? As the article acknowledges, the obvious (and by no means wicked) response from chateaux will and should be to hold back thier production and then sell it at the price the market will bear.

Matthew, if you want to understand the primeur system better and why everybody (the chateaux, negociants, distributors and last but not least the customers) should and - to make the system work - must profit read the article of Christian Seely in his Blog (christianseely.com). This man is the managing director of AXA and responsible for Pichon-Baron, Petit Village and Suduiraut and other Chateaux. To quote him: "For all this (the primeur system) to work, the prices en primeur have to be right." So don`t get mad about my comment, but read the blog and calm down! And let`s hope for reasonable prices!

Michael, why should the producers "think of the rest of the market players" and allow them to profit of their wines?

Like anyone else, I am sorely disappointed by the way wine prices, and those of Bordeaux in particular, are going. But you can hardly blame the Chateaux for pricing at the point the market will bear. Why on earth would they price any lower, if the reason for doing so is to allow a speculator to profit from their hard work, simply to keep the "system in balance"?

En primeur serves a useful purpose: allowing producers to free up capital, by avoiding a long wait from harvest to release without sale. They can then invest in the next vintage. It is not a system designed to allow profit from speculation. In fact, its a damn shame that there is wine speculation at all.

If you'd rather purchase your wines on release, for the same price as en primeur, do so. But don't complain that you are no longer able to make a profit.

I would be much more sympathetic if your complaint was that, by pricing so high, and thereby and eliminating the "dynamic of growth", chateaux are not rewarding the good faith, trust and loyalty, consumers show when purchasing en primeur.

+1 @Adrian

There is one main reason for me as a wine lover to stop buying futures: there is no price advantage anymore. Look at the market trends of the 2009 and 2010 wines and you will see that the prices today are more or less the same as they have been at the beginning of the futures campaign (with very few exceptions). So why buying now when you can buy the wines in two or three years for the same price? This is what happens: the whole system of buying futures is being destroyed from within by prices which prevent a dynamic of growth. When the prices are too high from the beginning they will not go up later, as you can see now. If the chateaux think they can make the profit alone (by making high prices) without thinking of the rest of the market players the whole system gets out of balance.

I have bought this wine previously, but at this price I will avoid this year and look for better value elsewhere. If this is the taste of things to come I may avoid 2011 altogether - especially as Rhone 2010 is so good and much better value!

Not all Merchants are in London! Also available in Birmingham at Frazier's Wine Merchants. (40% of our allocation already sold)

This is like trying to judge the price of a Rolls-Royce from the price of a Mini.