Eye-catching price cuts of up to 30% on several prestigious wines helped to create a buzz around the Bordeaux 2019 vintage releases, according to a new Liv-ex report, released to its trade members.
It said this year’s condensed campaign proved a ‘surprising success’. Expectations were low, following the cancellation of the official en primeur tasting week in April and forecasts of a global economic recession due to the coronavirus public health crisis.
Some wines sold better than others, however.
There was ongoing debate, too, about the inclination of some estates to hold back a greater proportion of their stock from the en primeur campaign.
‘Despite the uptick in demand this year, many châteaux chose to ignore the opportunity to sell greater volumes,’ said Liv-ex.
Matthew O’Connell, head of wine investment at BI Fine & Spirits, told Decanter.com, ‘The dynamics around pricing and demand were generally positive and the main limiting factor for the campaign was available quantities.’
Price cuts and top sellers
Prices fell by an average 21% versus the 2018 vintage releases just over a year ago, said Liv-ex, and this helped the campaign to bring back ‘some of the magic of the past’ for buyers.
En primeur returns have been patchy over the last 15 years, as previously reported.
Some estates – including Mouton Rothschild, Pontet-Canet, Haut-Brion and Figeac – dropped prices by more than 30%.
‘Bordeaux 2019 price cuts were a nod to market stress,’ said Liv-ex, noting that critics – including Decanter’s Jane Anson – had been very positive about the overall quality of the vintage.
The top 20 merchants in the UK saw sales revenue fall by 10% on average versus the 2018 vintage campaign, although sales by volume rose by 15%, said Liv-ex.
‘The stand-out successes, according to merchant members polled, included Pontet-Canet, Lynch-Bages, Mouton Rothschild, Mission Haut-Brion, Pichon Lalande and Clinet,’ said Liv-ex.
‘Châteaux that made the correct reductions sold well and quickly,’ said Thomas Parker MW, buyer at Farr Vintners in London. ‘Lots sold out to pre-orders and we had to go back to Bordeaux and ask for more,’ he told Decanter.com.
While other wines didn’t sell so well, Parker said that ‘it has certainly been a success for us, especially when you consider the mood leading up to the campaign’.
It wasn’t only the estates with the deepest price cuts that led sales, according to Will Hargove, head of fine wine at Corney & Barrow. It’s important to look at individual estates’ back-vintage availability and pricing history.
He highlighted Calon Ségur, which was down by 10% on an ex-London basis versus the 2018 release, less than some of other estates. However, the wine was rated 97 points by Jane Anson and Calon has a history of price rises on the secondary market.
In recent years, ‘en primeur has been the cheapest place to buy their wine’, said Hargrove.
Liv-ex said Calon Ségur 2016 has risen in price by 20% since release, in a market where several of peers have struggled for momentum.
What about US buyers and tariffs?
In the US, Clyde Beffa Jr, co-owner of K&L Wine Merchants told Decanter.com that good sellers this year included Pontet-Canet, in particular, plus the first growths* and Léoville-Poyferré, Lynch-Bages, Pichon Lalande, Ducru-Beaucaillou, Léoville Barton, Phelan Ségur.
However he said it was a ‘so-so’ campaign in general. ‘Properties that lowered their prices from the lofty 2018s by 20+% did well,’ he said, adding that there were also ‘some big disappointments’.
He continued, ‘We bought much less than we did in 2009, 2010, 2015, 2016 and 2018, so we sold less than in those vintages.’
Shaun Bishop, CEO of merchant JJ Buckley, said the campaign went very well under the circumstances, albeit with buyers focusing on a relatively narrow band of top names. ‘Three best sellers were Pontet Canet, Lynch-Bages, and Cos d’Estournel,’ he said. ‘Other top sellers included Lafite Rothschild, Figeac, Ducru-Beaucaillou, and Léoville Las Cases.’
There had been concern that 25% US import tariffs might affect demand, but neither Beffa nor Bishop saw this in the campaign.
Because the wines are still in barrel and not due for delivery until 2022, it’s possible that tariffs may no longer apply when the vintage is shipped.
Beffa said, ‘If there are tariffs, we will charge at delivery or customers can cancel their order.’
Bishop added, ‘Buyers were given the right to cancel orders if tariffs increase at time of shipment.’ However, he added, ‘Consequently, some negociants refused to sell under those circumstances, so many allocations were cut and some customers’ demand was greater than the supply.’
*Latour left the en primeur campaign in 2012.
