A bitter row has broken out between the Hospices de Beaune and Burgundy negociants over the unnaturally low prices fetched at the weekend’s auction.

Arguments revolve around the suggestion that prices were kept artificially low by a cartel of negociants.

While Louis Fabrice Latour, president of the Burgundy syndicat des negociants, denies there was any price fixing, he admitted negociants met before the auctions and decided a message had to be sent out to the growers: don’t expect high prices.

‘We had to send a signal to our growers,’ he said, explaining that if Hospices prices had stabilised at 2002 levels – instead of dropping 10% below that level as they did – negociants would have ‘stayed at home’, and been very cautious about how much bulk wine they bought from their growers.

He added, ‘and that is not something the growers want. A lot of them are in a very tight financial situation.’

Alain Suguenot, Hospices chairman and Beaune mayor, said he was ‘disappointed by the sale results’.

Staff of the Hospices disagree with the widely-held notion that the annual auction is taken as a barometer of Burgundy prices. ‘It was never meant to be an economic indicator,’ Suguenot said on Sunday. ‘And if they were to become one, then they would stop being a charity auction.’

Other senior members of the Hospices agreed, and expressed their bitterness at the results – which would mean less funds for the traditional recipients of Hospices charity, the poor, sick and elderly of Beaune.

One said he was bitter because some of the cuvées, like cuvée Savigny les Beaune Arthur Girard, were sold at their actual market price (€1967 per barrel) which is much too low for a charity auction.

He said, ‘It’s not the drop in price that is bothering us, because we expected it, but the way it has been organised. I don’t think the Hospices purpose is to be a mirror of the economic health of the Burgundy wines.’

There will be meeting of the Hospices executive council in December which one member said would be ‘heated’, but admitted it would be difficult to come to terms. According to the arcane rules of the 150-year-old auction, the negociants are the only bidders for full barrels, and if the Hospices tried to sell the wines for itself it would quickly come up against the power of the negociants.

The last person to try to change the rules was negociant Andre Boisseaux in the 1980s, who demanded to buy bottle lots. His attempted boycott failed.

‘If the Hospices were to try to sell their wines themselves, that would be considered a declaration of war’, warned Latour.

Written by Florence Kennel