The Bordeaux market has begun to regulate itself, and fears of a bubble are ill-founded, the head of the Union des Grands Crus has said.
Sylvie Cazes (pictured), managing director of Chateau Pichon Lalande and recently re-elected president of the UGC told Decanter.com that the 2010 en primeur campaign has proved that Bordeaux is beginning to find a balance between price and demand.
Cazes said, ‘Of course there is concern about high prices but we are aware of the need to keep a balance.’
The situation with the new Asian markets was similar to the entry of America into the Bordeaux market in the 1980s, she said, when there was the same worry that European buyers were deserting Bordeaux as chateaux chased the new market over the Atlantic.
‘Every time there is a new market, tension is created. It happened with America in the 1980s and it happened with Asia last year. But this year has been more stable – there hasn’t been the same excitement.
‘Everything is self-regulated and now we have a good balance between Europe, Asia and the United States, although the US has been difficult. There is still great demand from Asia but it is not increasing as much as it did with the 2009 vintage.’
She added, ‘I don’t believe in bubbles – with a bubble you have a great increase, then it bursts. I don’t think this will happen – the market will stabilize itself, and with 2010 we are seeing the start of that regulation.’
Cazes also stressed that the extraordinary prices the first growths had reached was a ‘special phenomenon’.
While many agree, there are senior figures in Bordeaux that – both privately and publicly – fear that prices are reaching unsustainable levels.
Discussing the price of St Emilion first growth Cheval Blanc, which released at €900 per bottle from negociants and has proved extremely sluggish in the market, one Bordeaux veteran, who wished to remain anonymous, told Decanter.com that Chinese buyers may begin to get cold feet.
‘If this virgin market [China] sees that they are the only country buying this at this enormous price, they may well see that they are being fleeced, lose face, and turn a very cold shoulder towards Bordeaux.’
In Bordeaux, Mathieu Chadronnier, managing director of negociant CVBG Grands Crus, refused to predict the existence or otherwise of a bubble but conceded that in some cases, prices were indeed ‘out of control’.
Written by Adam Lechmere