It’s hard to feel too sorry for the négociants. As the outspoken Simon Staples, sales and marketing manager of Berry Brothers, puts it: “Normally they earn 15% commission for doing diddly squat.” But this year they have been squeezed between the high prices of most châteaux and the refusal of wine merchants to accept them.
Some négociants have been reduced to selling wines at cost to get rid of their allocations, rather than face the prospect of financing expensive stockholdings in due course. “They’ve been juggling hot coals,” adds Staples. “The négoce are starting to get nervous about holding such a big amount of stock,” agrees Stephen Browett of Farr Vintners.
Historically, the châteaux have been protected by a system known as “la place”. The way this works is that in order to maintain their allocations from one year to the next, the négociants have to buy en primeur, whether the merchants and we the consumers choose to purchase from them or not. It is often said that Bordeaux is an open market, governed by the laws of supply and demand, but this isn’t true. The négociants provide a safety net which effectively allows the châteaux to charge what they like.
Some wines sell better than others en primeur – and it looks as if Rauzan-Ségla has flopped – but in a normal year that wouldn’t matter. The négociants would still buy them, releasing them onto the market once they were bottled in an attempt to recover some of their outlay.
But maybe this is changing. This en primeur campaign is like no other. A few of the top châteaux have shown restraint – Domaine de Chevalier, Calon-Ségur, Grand Puy Lacoste are good examples – but many more seem to have lost their grip on reality. And we haven’t yet seen the release prices from the likes of Ducru-Beaucaillou and Cos d’Estournel, let alone the First Growths.
The négociants, like most merchants and journalists, think that with very few exceptions the 2010s should be offered at the same prices as the 2009s, or for less in some instances. But that hasn’t happened. The châteaux have pushed through increases regardless. “Most of the wines are over-priced,” one négociant told me off the record. “This year I’ve not taken my allocation of a number of wines, even though I may lose it next year.”
Will any other négociants follow Barrière Frères’ lead? The châteaux have always relied on a policy of divide and rule, but if the négociants were to join forces, taking a joint decision that enough is enough, it might bring some sanity to this crazy campaign. It’s probably too late for this year, but if they removed the safety net, forcing the châteaux to run the risk of crashing, limbs flailing, to earth, it would change the en primeur market for the better. More to the point, they’d be doing consumers a favour too.
Dom Chevalier are restrained? Releasing at prices higher than any vintage of the last 10 years on the market? If that’s restraint…
Compared with the competition, absolutely. The Chevalier (95 points from me) costs £550, £30 less than the current price for 2009. Smith-Haut-Lafitte (94 points) costs £870 (the 2009 is £590), Haut-Bailly (94 points) £1050 (£1025) for the 2009). A relative bargain in a great vintage for the Graves.
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Nice post, Tim.
Have there been any high-profile examples of merchants that have refused the 2010 prices?
Lots of them are refusing to buy the most egregiously over-priced wines, as they did last year. I think they are less worried about losing their place in the queue than they used to be. Can’t see anyone going big on SHL or Rauzan-Ségla, for example, although Pontet-Canet has sold well. The exception that proves the rule? And if Cos goes up in price, a number of merchants have told me that they won’t buy a bottle. How is the campaign looking in the US?
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Hi Tim
Do you think the top end estates are so powerful now that they can go it alone, outside of the negociant system? Can you envision this ever happening?
Cheers
Chris
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Hello Tim,
This has been a drawn out, frustrating and high-priced campaign.
Nonetheless, BBR are on record as it being their 3rd most successful primeurs ever, after 2005 and 2009. Some London merchants are down on last year, but from a very high baseline – witness Farr at £62,800, 000 during last year’s 2009 campaign – others, however, have in fact grown.
Therefore, aside from the well-publicised example of Barriere Freres and Rausan-Segla – Yvon Mau went on record to Harpers with a certain allusion but no names named nor boycott confirmed – I wonder, would you be able to qualify which négociants, how many, which wines?
The exasperation of the Bordeaux négoce globally has been well-aired, however, ultimately, the word from the négociants at Vinexpo is, by and large, “this game is like this, some years we win, others we loose”.
Just to qualify the reference to Farr.
From their ep report:
” It’s certainly been a very successful campaign here at Farr Vintners with over £30 million worth of wine sold so far, which puts it already 20% above 2005 (but behind 2009) as our second biggest en primeur campaign ever.”
Less than 1/2 the value of the 2009 campaign, but nevertheless, mirroring BBR in historical performance.
I stopped buying the Observer after their ever so wise decision not
to have a wine expert on board. You are the tops.
Thanks, Jim. I stopped buying it too. Glad you are still following me on my site. Lots of exciting things will be happening here over the next few weeks. Hope you enjoy the new look.