5,600 or £45,000 (depending on who’s counting) more in her own expenses. For several days before she accepted her fate, Ms Miller’s supporters had vainly tried to claim that the media was unfairly treating her as a scapegoat. This position was somewhat undermined by the fact that many in her own party were as critical of her as any journalist.
An hour or two later I read that Christian Seely of Chateau Pichon Baron was complaining about a “concerted effort” to undermine the 2013 en primeur campaign and “
Totally agree. Two other points: 1) Christian Seely's Châteaux always make the best possible wine, so although they will have outperformed the average in 2013, so they do every year – the price drop needs to reflect the vintage, not their winemaking abilities. 2) What on earth will the producers do if 2014 turns out to be a stunning year? They won't be able to 'only' increase their prices by the amounts they have reduced this year, and they will be faced with the same problem that happened previously – high quality vintages with some age will be available for less in the market, making it pointless to buy en primeur even great wines. They should reduce the prices of the 2013s to what they are worth as wines. Which is a minuscule fraction of what they are charging.
I think “minuscule fraction” is a little hyperbolic, but your point about the 2014 is well made. My objection is to the way that even people I like and admire seem to think it normal to expect everybody happily to play a game whose rules they the Bordelais have devised
I think that essentially the problem is this:
Up until, say, 2008, the chateaux sold their wines for very reasonable prices, and the people who made all the money on great vintages were the negociants and speculators.
In 2009 and 2010, the Chateaux all decided that they wanted a larger slice of the pie, and hiked their prices significantly (money which they are now spending on new wineries), and released a smaller proportion of their wines, holding back more stock for second and third tranches.
The system that supported the market in the past relied on negociants and wine merchants putting their money where their mouth is year after year, and financing stock. Often the wine DIDN’T appreciate in value, but what stockholder lost on poor vintages was subsidised by the substantial gains they made on the vintages that DID appreciate in value. (I remember buying up (for Sainsbury’s) loads of the delicious, short-lived, but attractive 1997 vintage at 40% below the release price, as negociants released funds to allow them to spend big on the much hyped 2000s)
After 2009 and 2010, Chateaux started to believe their own hype, and that the intrinsic worth of their wine was a great deal higher than it had been in the nineties and early noughties, and are still refusing to drop the prices back to a sensible level that will see all of their wines sold. The end customer does not want ‘pretty’ wines at investment prices, so why on earth should negociants and wine merchants continue to support the system by holding stock for the long term when these wines are very unlikely to appreciate in value?
Up until now, the ecosystem of Chateau, courtier, negociant, shipper, auction house, speculator, end drinker, has proved robust enough to survive decades of change, with, over the medium-term, enough in it for everyone to remain bought in to the concept.
If the Chateaux get too greedy, it seems to me that the system of the Bordeaux ‘place’ is in danger of breaking entirely, and with more and more Chateaux looking for more direct routes to market that give them more control over their pricing, image and profitability, this dysfunction is likely to get worse. Wouldn’t it be fascinating to know in whose hands the ownership of the stock of the 2011, 2012 and 2013 vintages now lies? Are the Chateaux left with a huge amount of unsold stock, or have the negociants obediently soaked it all up at the asking price, and are waiting for the next up-cycle to cash in?
I predict that the ‘place’ will survive, that Chateaux will drop their prices on the quiet to negociants with plenty of cash, and a long view of the investment cycle, and that there will be another ‘shortage’ in 4-5 year’s time when the next vintage of the century comes along.
Characteristically incisive Justin. From what I hear, those 2011's and 2012's and definitely 2013's are chez the negoce who are now selling at a discount. Whether the chateaux are funding any of the discounting is not clear, but it is not coincidental that several negociants are for reportedly for sale, apparently at prices that cover little more than the value of their stock.