Sunday, July 11, 2010

Bordeaux 2009 - Where did the Wines Go?

I have to admit that we didn’t expect much from the Bordeaux 2009 campaign. We all knew the quality was outstanding, but nobody really seemed sure of demand or, more importantly, prices. We have been buying en-Primeur since 1996, so are relative whippersnappers, but I think even the old dogs were surprised. Demand for the best wines was unprecedented and we were fortunate that the relationships with the negociants we regularly work with in Bordeaux held up, even under severe pressure, and we were able to secure the majority of the wines we were looking for at the all-important opening price.

In terms of value, our sales were 30% higher than in the campaign for the 2005 vintage, but in terms of volumes we purchased 25% less. That gives you an idea of how the pricing went!

Yet, despite the predictions of pricing catastrophe, the wines have sold well and the majority have increased in value – by an average of 15% - 20% so far. There were, however, some wonderful pricing blunders on the part of the Bordelaise – wines such as Figeac, Ducru Beaucaillou, Cos d’Estournel, Yquem, Troplong Mondot and a few others all came out at prices that spoke more about their respective egos than any attempt to offer value to the eventual customer. Needless to say, they are all still available at their opening prices – and in some instances there have been behind the scenes offers where prices are dropping. If you blew it and priced too high, a very public humiliation where your prices are seen to drop is something you’ll do (almost) anything to avoid.

But customers that secured the wines at opening prices will be happy. Significant price jumps occurred with the release of the 1982, 1990, 2000 and 2005 vintages – and the higher prices have then carried forward – and in many instances actually lifted the prices of the older vintages as well.

But one question still puzzles me: where has all the wine actually gone? Aside from the statistics about sales by volume and value, the one striking fact from our perspective is that we have very little stock left. Normally we would accumulate stocks so that we can keep reserves for future years. This year it was just too expensive – if you wanted, e.g. to hang onto 10 cases of each of Lynch Bages, Leoville Barton and Pontet Canet it would be the guts of €30,000 tied up. Just for 3 wines. Add in a couple of Pomerols and St. Emilions and you're over €100K very quickly. If we are/were like other retailers (and I presume we are), then most of the stock has actually sold right through to end customers – which is good for the overall stability of the market.

However it’s an expensive challenge (or maybe ‘mistake’) if a retailer over-orders and then has to carry the stock forward – in Bordeaux terms, the most expensive vintage mistake to date! It will be interesting to see where everything stands in 8 months time with hopefully no casualties along the way.

In the meantime, those wonderful wines are ageing peacefully in the cellars of the respective Châteaux – and most are getting more delicious and more expensive by the day!

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