Bordeaux bets on top quality but cheap 2008 vintage
In the midst of an economic downturn, the big wine estates brought prices down sharply, opening the way for traders to target middle market wine drinkers once again.After months of gloom, Bordeaux wine traders are hoping the 2008 vintage will revive the market after steep price cuts and rave reviews from the world's most influential connoisseur.
The southwestern French region's rarest wines are sold every spring as a futures commodity, 12 months prior to bottling. With the world gripped by recession, many had been fearing financial disaster.
The futures sale only concerns a tiny percentage of the 800 million bottles the Bordeaux region produces annually but the prices of the top 20 wines help determine the public perception of the quality of the vintage.
This year, the big wine estates brought prices down sharply, opening the way for traders to target middle market wine drinkers after a period when the finest wines were priced for sale to only the richest speculators.
As Patrick Bernard, owner of wine merchant powerhouse Millesima, explained: "If the top 20 wines double or triple their prices as they did in 2005, all of Bordeaux wine is perceived as expensive. The first wine on the market was Angelus, one of those 20 wines, and they cut their price by 40 percent. A few days later, the First Growths came out with a 45 percent decrease and then Yquem with a 65 percent decrease."
Other premium wines were released at the same time to maintain momentum. Leoville Barton dropped its ex-cellar price to 23 euros and sold out within a few hours.
"It was much better than I expected," said Lilian Barton, co-owner of the legendary estates Chateaux Leoville Barton and Langoa Barton, and director of her family wine merchant, Les Vins Fins Anthony Barton.
In addition to dropping their prices, the chateaux had hoped to demonstrate their independence from American wine critic Robert Parker, nicknamed the "Million Dollar Nose" for his influence on the market.
Parker is a champion of Bordeaux's wines but many in the industry feel that he wields too much power with his rankings, and three-quarters of the wines were put on sale before he had given his verdict.
The demonstration of defiance was only partly successful, at best.
Several sources said that sales prior to the release of Parker's ratings, with the exception of a few star buys, were subdued. The tempo changed when Parker awarded the vintage spectacular ratings.
"The buyers went berserk," said Barton.
Clients who had pleaded poverty in early April suddenly found the wherewithal to buy on futures.
Despite annoyance with the fickle importers, Barton, Anson, Bernard and others were relieved to see the return of traditional customers who had been pushed out of the market in recent years by skyrocketing prices.
The vintage was very good and there was a dramatic drop in price -- buyers are stocking up for customers who buy wine to drink rather than to invest.
"This was the vintage to buy for the consumer," enthused Bernard.
Unlike nearly all of the other 400 wine merchants, Millesima, with annual revenues of 52 million euros, sells directly to the consumer in 11 European countries and America.
"Direct sales to European consumers has been good,” said Bernard. “There's no currency problem and they haven't been able to afford it over the last few years."
Bernard will buy 35,000 cases this year, a 10 percent increase over last year even though most chateaux are offering customers only 80 percent of their usual allocations because of a small crop.
While the 2008 futures campaign is slowly drawing to a close, there is little doubt that for many it succeeded in resuscitating not only sales but also the image of Bordeaux wine as a consumer product.