Before Bordeaux 2015 en primeur slides away into that pre-Brexit haze, it’s worth picking over the learnings from a campaign that showed this traditional method of selling still has some resonance with the market.
A week or so ago, I did my annual visit with several wine brokers and merchants to pick over how things went. These men (and occasionally women) are always the best way to take the temperature of the mood in Bordeaux, and most were cautiously optimistic, although thoroughly scornful of certain chateaux. One was, fairly unusually, happy to go on the record with his thoughts, showing it seems to me a growing awareness that the issues with En Primeur can no longer simply be swept under the carpet.
Anyway, before getting to that, a roundup of the numbers. Globally, 353 chateaux released their wine in the 2015 campaign, a little higher than last year, as you would expect with a vintage that was hyped for its quality. The average price rise, according to figures from three brokerage firms, was 28% on that of 2014.
‘But that number is skewed,’ points out broker François Leveque, ‘by the high price rises towards the end of the campaign. In fact the majority of estates kept their price rises to between 15 and 20%, something that is perfectly legitimate within the context of the vintage, and it was these wines that accounted the large majority – as high as 80% – of the sales’.
According to Eleanor Wine Index, a company that provides a platform for trade between négociants and fine wine merchants worldwide, the appellation that showed the highest price rise overall was Pessac Léognan, with a 37.5% rise for the red wines (‘although starting from a lower base, so remaining relatively reasonable overall’ says Leveque). This was followed by 31.9% from Saint Emilion and 31.4% from Pomerol.
In the Médoc, where quality of the wine varied far more, a rather more depressing picture emerges of brands clearly choosing to ride on the back of overall vintage perception rather than intrinsic quality. I am not alone in thinking that the 2014 vintage was exceptionally good in most of the northern Médoc, and in many cases more evenly so that in 2015, and yet we saw average rises of 29.5% from Pauillac, 21.5% from Saint Julien and 18.9% from Saint Estèphe this year. The Margaux appellation still pushed things at 25.1% but here the acclaim for the wines meant higher prices were more justified. For the northern Médoc, I have to say that I’m sticking to my purchases from last year – and in some cases buying a few more 2014s while I still can.
Five thing we learned from the Bordeaux 2015 campaign:
Misplaced sellers’ remorse
I can’t tell you how many chateaux owners who released early and sensibly are regretting it now. I have had four or five conversations with estates who think they ‘underestimated market demand’ by releasing at reasonable prices. I am very happy to pass on François Leveque’s retort to those chateaux: ‘Those who feel that they missed out by not raising their prices higher are missing the point. Chateaux are not here for one shot but for the long term, and their customers remember where they made money, and will buy those wines in the bad years’. Leveque cites Grand Puy Lacoste, La Tour Martillac, Carbonnieux, Fieuzel, Cantenac Brown, Labegorce, Beausejour Becot, Pape Clement and La Pointe as good value wines that offered margin to their customers this vintage.
Second wines are now firmly ‘repositioned’
Take a look at the release prices of the vast majority of second wines from classified estates this year, especially those of 1855 classified estates. You’ll notice that their prices are now setting a firm new bar, and my guess is that we can expect this to become the ‘new normal’.
Pessac Léognan still has a way to go
Of the three appellations of the vintage – Margaux, Pomerol and Pessac – it was the first two that really benefited from the idea of a rising tide floating all boats. Pessac Léognan is still not widely enough known in the minds of consumers to be able to sell on ‘appellation’ rather than brand, and it still saw a patchy success that encompassed the big names but not the rest. It really does make you question whether the creation of the AOC back in 1987 was such a good idea. Might they not have been better to stick with Graves, when their wonderful classified wines are, after all, Crus Classés de Graves?
The allocations system is breaking down
Chateaux are releasing less wine En Primeur, we all know that. But it seems that these same chateaux are not always playing fair. I know of two merchants from the States who did not receive their usual allocation from négociants but when they approached the chateaux directly were then ‘slipped an extra few cases’. This is of course the chateaux prerogative, but it seems clear that the business-as-usual idea has now fully broken down. En Primeur as it was reflected an old pattern of behavior that is changing. We might regret its loss but it is no longer the reality of how people do business.
There is one clear opportunity for chateaux that they continue to ignore
It is clear that the United States and Asia have really started to disconnect from the idea of En Primeur. So keeping wine to sell later makes sense. But it is still incredible that so many of chateaux are sticking to the strategy of releasing tiny amounts of highly priced wine. ‘It is again proof that they are not thinking long term,’ says Leveque. ‘It is simply crazy to think that they can sell 30% now at a high price and then 70% at the same price or higher down the line. Most Médoc estates have 500,000 bottles to shift, and all they are doing is alienating the market. The ideal model is surely selling 50-60% at a truly attractive En Primeur price to create demand, which will then mean the wine actually gets sold through to consumers, which then creates demand and price rises on the secondary market, so when they release the second tranche of bottled wine, they are then able to capitalise on justified price rises’.
Top Five Release Price Value in terms of relative price to today’s 2010
Chateau Pape Clement
Chateau Pontet Canet
Top Five Most Increased Prices Compared to 2010
Chateau du Tetre + 89.47%
Chateau Bellgrave (Pomerol) +47.48%
Chateau Olivier (white) +32%
Chateau Croizet Bages +25.71%
Sarget Gruaud Larose +25%
Top 5 Decreased Prices Compared to 2010
Chateau Beausejour Duffau -60%
Chateau Ausone –51.79%
Chateau Mission Haut Brion (red) -50%
Chateau Coutet -42.11%
Malescot Saint Exupery -42%
Data source: Eleanor Wine
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