Bordeaux 2011: Merchants predicting ‘pain ahead’ despite price drops

Some UK wine merchants are predicting painful months ahead for the Bordeaux market despite more top chateaux dropping their prices this week.

Leading the discounts in the latest releases is Ducru Beaucaillou, down by 50% on last year to €75 per bottle. Another release this week was Vieux Chateau Certain, seen by many as the wine of the vintage, down to €96 from last year’s €180. Chateau Ausone is also down by around half, albeit still at €500 ex-Bordeaux.

Falling prices have seen chateau owners criticised for waking up too late to market realities. Asian demand for new releases has slowed. Meanwhile, trade insiders say buyers are seeking older vintages that are ready for drinking now, and are cheaper in some cases.

‘The campaign never really got going,’ Marcus Edwards, MD at Albany Vintners, told Decanter.com. ‘There are many reasons that merchants didn’t buy. Mainly, we know negociants still have stocks, and we don’t expect prices to rise between now and when the wine becomes physically available.

‘I think there will be pain ahead in the next six months,’ he added.

Other chateaux released this week were Beausejour at €50.30; Larcis Ducasse at €34.20, down by 31.33%; Chateau Brane Cantenac at €31.20, down by 42%; Pavie Macuin down by 49.23% to €39.60 and Chateau Talbot down by 33.3% to €26.40.

Lafite chose to release both Carruades, unchanged from last year at €108 ex-Bordeaux, and Duhart Milon at €57, down by 36%.

Some economists believe investors may move into wine as a safe haven from volatile financial markets. Up to now, though, there is little sign of this. The fine wine investment index, Liv-ex, fell by 4% in May and is at its lowest level since early 2010. Another fall is expected in June, Decanter.com understands.

Written by Jane Anson in Bordeaux