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Bordeaux 2014: Future Bright or Bleak?

Posted: Thursday, 05 February 2015 12:56

Bordeaux 2014: Future Bright or Bleak?

Feb 05: The En Primeur of Bordeaux 2014 will be ready to unfold by the end of next month but its success would depend upon whether the Bordeaux producers get the pricing right by reducing, although the quality is better than 2013 and not like 2009 or 2010, writes our Bordeaux Correspondent Pallavi Vatsa who has been told by many outsiders that this may be the ‘last chance’ to keep the system alive even as the locals are tight lipped

First the Good news

It is true all around the wine producing world but more than anywhere else in Bordeaux to link traditionally the weather to deadly or marvelous prognostication for the quality of the wine to come. Click For Large ViewFor 2014 the weather was sunny but not overly hot, so the grapes have retained freshness and drinkability and the overall reports about the 2014 harvest bring good news for both red and white wine producers in Bordeaux.

“We dare….” announce the UK wine merchants

According to the latest sales figures from August 2013 to August 2014, exports for Bordeaux wines were down 18% in value and 8% in volume.  China, which has been considered as an alternative market for Bordeaux wines in recent years, showed a drop of 26% in value and 25% in volume. The past three years of difficult harvest and many more years of “unfair” pricing strategies can be blamed for this drop in demand for Bordeaux wines.

The en primeur system cuts a very different picture from the global view of Bordeaux wine sales. Amongst the 7,000 wine estates, around 5% sell as futures before the wine is bottled. This depends greatly on the vintage, for example in 2010 around 450 wines were sold en primeur, while in 2013 the number was around 200.

That many consumers in the UK and beyond have stopped buying Bordeaux wines en primeur, because they see no value in it.

‘The [en primeur] price should represent value for money in that the wine will not be available at a later date for a lesser amount. This has patently not been the case with the last four (arguably five) vintages,’ says the letter as reported by Decanter.

Simon Berry of Berry Brothers and Rudd tells delWine very clearly that Bordeaux wine makers have to price their wines so that they are cheaper than mature vintages, to revive remind. He believes that the 2014 is good vintage and optimism is everywhere in Bordeaux but at the same time for someone to look at en primeur as investment, the prices have to come down.

“Owing to the below average vintages in the last years, people have to find a reason to get excited about the en primeur. If the Bordelais do not lower the prices, people are going to swing away from Bordeaux wines and as they have been doing in the previous years, will be in the search of wines from around the world.” Reflecting on how times have changed, he says, “Bordeaux did account for 50% of our profits at Berry Brothers and Rudd but in the recent years wines from Rhone in France, Spain and Italy are rising up significantly.” 

What is the solution then? Will en primeur slowly disappear? How can the Bordelais make the best of it? He says that History alone cannot let the system survive.  “Well, the rest of the wine world is doing without en primeur. What the Bordelais should do is have a careful look at the market. They must allow the trade to get the message out that it is a good vintage. Their job is to make great wines, our job is to get people excited about the Bordeaux wines but we cannot do the job if the prices don’t come down.” When asked about the supply chain, he says “it is very transparent these days. If the prices of en primeur are reduced by say, 25%, we will follow suit while selling them.” Bottom line? “Very simple. Look at the market. Reduce the price,” Simon says.

The “Bordeaux” point of view

Most of the Bordelaise whom I tried to contact refused to comment on this. Melanie Tesseron of Chateau Pontet Canet (Grand Cru Classé from Pauillac) boldly says, “Our main concern is making a great wine. Right now we are in the process of Blending (“assemblage” as it is called in French) and we see no reason why we cannot offer our consumers a great wine from this vintage. As far as pricing is concerned I am very positive, specially keeping in view the dollar exchange rate. Apart from that, it would be unfair to give any kind of label to en primeur campaign so early”.

Click For Large ViewI met Paul Pontallier, the Oenologist and the Director of one of the crowning glories of Bordeaux, Chateau Margaux and he said “there are various factors which define the price of a vintage. And we are not only well aware of those factors but take them into consideration and try to fix the price accordingly.  One of the very important of these factors is the quality of wine. At Chateau Margaux we have great wines from 2014 and we invite wine professionals from around the world to come and taste the vintage. To decide the price or to decide lowering the price without tasting the wine would be unfair and premature.”

Jeffery Davies, (whose brokerage house, Signature Selections has been described as being on the cutting edge of Bordeaux by Robert Parker) who is also planning to enter the Indian wine market soon, says without mincing words, “The problem is really simple:  people buy futures because the wines will cost more when they are actually released; doing so is thus a good investment. But if they don't appreciate, there is no incentive to buy them on a futures basis. The second problem is equally simple:  the distribution chain, i.e. the Bordeaux negociants, and their customers (importers around the world) aren't making any money on these campaigns and they have not for several years now. So, I think this is the "last chance" campaign:  if prices on the 2014s are not judged reasonable by the market, this could well spell the end of futures campaigns as we have known them for the last three decades.”

From what I see in Bordeaux, there is a certain and calm sense of optimism among the bustling cellars. After three tough vintages, most chateaux are assured that the 2014 vintage will be the most promising since 2010. Certainly not phenomenal like the 2009 and 2010 but they will certainly bring high quality wines in large quantities. To put it simply, in terms of yield, we will be way above last year.

En primeur still being most recognizable methods of selling Bordeaux, the whole of Bordeaux will suffer greatly around the world if the chateaux don’t get it right for the upcoming campaign. Only some months after the last year’s en primeur campaign (where the 2013 vintage failed to charm the world’s press and wine buyers ), there was a common prayer for the 2014 to be “good” or at least better than the last. “Good” in terms of quality and volume so that the chateaux are not tempted to raise the prices as they generally do in “exceptional” vintages.

“There are no secrets that time doesn’t reveal,” someone once said. In the coming months not very far from now, as the Bordeaux 2014 en primeur campaign unfolds, there will be more dialogues and discussions but no more secrets!

Pallavi VATSA

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Tags: En Primeur, Bordeaux, Pallavi Vatsa, Decanter, Simon Berry, Berry Brothers and Rudd, Chateau Pontet Canet, Paul Pontallier, Chateau Margaux, Jeffery Davies, Signature Selections

       

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