Asia demand forces Bordeaux merchants to buy back stocks
Stocks of many upper-end wines are so low in Bordeaux that local wine merchants are currently buying back stock sold to British buyers.
BORDEAUX, France, April 9, 2008 - Stocks of many upper-end wines are so low in Bordeaux that local wine merchants are currently buying back stock sold to British buyers over the last few years.
"There is no stock left in Bordeaux," said Ben Kennedy, Bordeaux buyer for
London-based wine retailers Justerini and Brooks, which turns over about 20
million euros worth of Bordeaux wines annually.
"Nothing is left in the chateaux, they have been cleaned out several times
over," he said.
Kennedy said Bordeaux merchants are buying to supply increased demand in
Asia, particularly China, Hong Kong and Korea. Pressure on stocks has been
further intensified by the removal last month of high taxes on fine wine
imports to Hong Kong, Kennedy said.
Other British merchants confirmed the effect of the removal of Hong Kong
duty, which went from 40 percent on the value of imported wines to zero.
They said prices for top Bordeaux, in particular from the 2005 vintage, had
shot up by 30 percent to 40 percent in the last few weeks.
Two other factors are contributing to the spike in wholesale demand for
Firstly, for the 2005 vintage, there is the increased interest from
consumers and collectors expected to follow the release in the next few weeks
of up-to-date tasting notes by US wine guru Robert Parker.
Parker, who was in Bordeaux last week to taste barrel samples of the most
recent 2007 vintage, also took the opportunity to re-taste the now bottled
And secondly, for all vintages, there is the fact of sterling's weakness
against the euro.
"It is cheaper for them to buy it back from us at the moment, because of
the currency situation," said Simon Staples, buyer for another London based
wine merchant, Berry Brothers and Rudd, also in Bordeaux last week.
"But if we sell, then we get left with no stock," he said. "So in our case
they are trying to buy, but we are not selling."
Bordeaux's primeur wine tasting week, when the latest vintage from about
200 top chateaux is sampled prior to its sale in two or thee months time,
ended last week on a higher than expected note for producers, and one of
concern for buyers.
Commenting on last week's tastings of the 2007 vintage, Kennedy said
prices for last year's Bordeaux must come down on the previous harvest to
reflect both lower quality and the strength of the euro.
If not, producers risk losing established markets such as Britain and the
US to Burgundy, Rhone or Spain.
The 2007 vintage, which was practically written off by critics before they
had even tasted it, has certainly been uneven for reds, with many described as
"hollow" or lacking in weight. Good reds however are described as fresh and
Whites across the board have been lauded, with critics praising dry whites
for their consistency, freshness and acidity. Sweet whites from Sauterne and
Barsac were also praised as rich and clean, with buyers saying it may be the
best since 2001.