Ella Lister mulls over the annual question of pricing across the region, discussing the hot potato with many of the big names and coming back with no one-size-fits-all response
A new phenomenon is afoot in Bordeaux: self-deprecation. I went to taste for ten days at the beginning of April fully expecting an underwhelming vintage. Reports from the Bordelais had been lukewarm; I had encountered none of the usual enthusiasm or bluster. In fact, I had not heard a huge amount about the 2017 vintage. When I asked, the local trade and producers alike seemed muted, cautious, almost weary. “Approachable,” “fresh,” and giving “immediate pleasure” were the descriptions being thrown my way. All the usual watchwords for a light and unprepossessing vintage.
And yet, many of the 2017s I tastedwere wonderful. They might not have the density or staying power of 2016, but they are accomplished, delightful wines, which in many cases will give pleasure early and for decades. Other visitors—trade and press alike—seemed to share my enthusiasm. Was this some elaborate form of reverse psychology engineered by a secret Bordeaux committee, I wondered? If so, it seemed to be working: The lack of pressure to appreciate the vintage as the bestever seemed to invite a more spontaneously positive response.
These thoughts were swirling round my head when I pinned down Edouard Moueix at Jean-Pierre Moueix’s offices on the banks of the Libourne, for a now annual interview about the upcoming en primeur campaign. I asked Moueix—managing director of the négociant—whether Bordeaux bashing is now over. “Probably yes,” he answered, with the surprising caveat, “except in Bordeaux.” He had recently dined in a Bordeaux restaurant, “and for the last glass they served me a Provence,” he recounted. “I gave them the choice—they thought I was a tourist.”
Confidence crisis
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Is this part of the same phenomenon? While the rest of world embraces Bordeaux wines again, the Bordelais undergo a crisis of confidence? “People have been very quiet in Bordeaux,” observed Moueix. Having not known what to expect from the 2017 vintage, he says everyone is pleasantly surprised. Perhaps they are reluctant to appear self-congratulatory too many years in a row.
While producers downplayed the 2017 vintage, the Place de Bordeaux expressed concern about the en primeur campaign. “My expectations are measured,” said the usually upbeat Mathieu Chadronnier, managing director of négociant CVBG, asserting that 2017 Bordeaux en primeur “will be a weak campaign compared to last year.” The general (if not unchallenged) consensus is that prices will come down on 2016. “Of course they will,” said Chadronnier, “but not enough.” “We always wait for decreases and they’re never considered enough,” he continued, then asking, rhetorically, exasperated, “what is enough?”
“Even a decrease of 10 to 15 percent on 2016 is still too high,” says Moueix, alighting on the problematic nature of always comparing prices to the previous year’s release price (rather than market prices for vintages of similar quality). For Farr Vintners, “enough” would be “around the current market for 2014, 2013, 2012, and 2011,” whereas “at close to current 2016 or 2015 prices the wines will not be worth buying.”
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“We all know that over the weeks to come the distribution of this vintage could be slightly more difficult on the commercial side than previous ones,” owned Emmanuel Cruse, Grand Maître of the Commanderie du Bontemps, Médoc, Graves, Sauternes, and Barsac. “We need to recognize that each vintage has its fair price,” his speech cautioned the producers and négociants enjoying dinner to celebrate the Ban du Millésime at Bordeaux’s contemporary art museum.
“I’m worried about prices,” one major négociant told me off the record. “It’s the usual Bordeaux spiral after three good vintages,” he said, explaining, “it will take a while for things to get back to normal.” This now well-known cycle (think 2008, 2009, 2010) means that “Châteaux sold the wine last year, everyone’s happy, so they won’t come down enough,” said the négociant. “We’ll buy but we won’t sell as much as we want to,” he concluded.
Security blanket
Why will they buy if they know they won’t sell in equal measure? Because of Bordeaux’s inimitable allocation system, which protects the all-powerful châteaux by shifting the risk onto the négociants. If the latter don’t buy their full allocation in a mediocre year, they might lose it in a subsequent year when there’s more competition. Building up a sizeable allocation can take decades, so it takes gumption to drop one just like that. This provides a security to the producers, which takes the pressure off them during en primeur.
Nicolas Ballarin of courtier Blanchy et de Lestapis also expresses angst about pricing. He recalls what happened at the end of the last similar cycle when in 2011 some first growths as much as halved their 2010 release price, mostly releasing at €360 per bottle ex-négociant. “This wasn’t sufficient, and the wines have been difficult to distribute,” he says, adding, “The 2012 had to release much lower (-33% for some first growths) and today it is more expensive and more in demand on the market than 2011.” No doubt the Place hopes that 2017 will not be a rerun of 2011, which in Ballarin’s words is “an example of a good vintage that didn’t know how to create desire,” lamenting, “nobody wanted to take a bet on this vintage.”
Exceptions, no rule
First-growth prices are particularly susceptible to vintage, and they can afford to reduce their release prices considerably this year, though whether they will go as far as halving the 2016 release price is another question. Most producers are not in a position to make such drastic reductions, but nearly every one will bring down its price to some extent on 2016, even if only symbolically. That is the only rule for pricing the 2017s. The real question is by how much, and there is no single answer.
The answer will vary from château to château, each one exceptional in its own way. Pricing for the 2017 vintage, rightly, will be as heterogenous as the quality of the wines themselves. For 2017 was not an obvious vintage in which to make a great wine, as 2015 and 2016 were. The infamous frost, hitting swathes of Bordeaux in late April, presented various challenges to those affected. The vintage was “complex to make,” owns Cruse, but there was a “constant search for quality.”
For producers who rose to the challenge, investing the manpower to be highly selective in the vineyard, very good wines were made. “We harvested in several goes, like in Sauternes,” explained Frédéric Faye, managing director at Figeac. “It was a lot of work to manage the different vines and mark them out,” he recalled, saying even the office team helped in the vineyards the day after the frost.
Several charmed châteaux escaped entirely. In the words of Olivier Berrouet, director of Château Petrus, the 2017 growing season involved “a series of quite pronounced climactic mishaps.” But Petrus was lucky, avoiding the frost entirely, while others in Pomerol lost 50 percent (L’Evangile) or even everything (La Pointe). Meanwhile, at Vieux Château Certan they were “only a quarter of a degree off being hit,” recalls director Alexandre Thienpont.
Not all wines were made equal. Difficult decisions had to be made; for example, whether to include second-generation bunches in the blend (equally superb wines were made both with and without), and how to adapt the assemblage (many wines had higher proportions of Cabernet Sauvignon in 2017).
For Moueix, the 2017 represents an exaggerated version of Bordeaux’s natural diversity. “Each terroir is overexpressed, almost,” he explains, adding, “For the curiosity of the wine consumers today it will be quite fascinating.” For his father, Christian Moueix, “The wines are good, if we put aside the frost,” but they are not great, “for one very simple reason—that we didn’t have enough sun in July, so they are missing the sparkle.”
The great and the (very) good
“I will not try to tell you that 2017 is at the level of ’15 or ’16, but if they are great vintages then ’17 is very good.” Those were the words of Olivier Bernard, owner of Domaine de Chevalier and President of the Union des Grands Crus de Bordeaux. “It will be a lovely wine to drink, I promise you,” he continued. And then what might sound like a platitude, but could not be more true: “If we had made this 20 years ago it would not have been this good.” Selection processes and winemaking facilities are so advanced at the top châteaux that they really can and do make very good wines even in challenging vintages, and 2017 proves how far they can go in mitigating circumstances.
During an en primeur campaign the participants often latch on to a vintage comparator. 2017 is again the exception to break the rule, with no obvious vintage to which to compare it. Philippe Dhalluin, managing director of Mouton-Rothschild, says the 2017 is somewhere between 2014 (“for the energy”) and 2015 (“for the softness”). Nicolas Glumineau says that at Pichon Comtesse, where he is CEO and winemaker, 2017 is “better than 2014 and closer to 2015.” Other vintages referenced included the lauded 2005 and the disappointing 2013. “It’s certainly the best vintage ending in seven since the famous ’47,” said Cruse.
“The wines will be approachable quite quickly,” according to Laurent Dufau, managing director of Calon-Ségur, and will last, “but not like 2016,” whose tannic structure they don’t match. This seemed to be the general consensus, though Edouard Moueix disagreed where his Right Bank wines are concerned. “It’s a vin de garde,” he declared. “I don’t see the easiness in the vintage, but you see the layers and the tightness and the tension,” continued Moueix, saying “It’s like a 2006 with more controlled tannins.”
The only way is down
Whatever other vintages were cited, most conceded the superiority of 2016. “I’m really very happy with the wine we’ve made, but it’s not the 2016,” stated Glumineau. Thienpont declared 2016 “the best vintage we’ve ever made,” calling 2017 “more classic, academic.” When quizzed on Vieux Château Certan’s likely release price, he said, “I have no idea but I think it will go down.” This intention to decrease was echoed across the Bordelais, even by producers with a track record of aggressive pricing, or those in the throes of repositioning.
“If the question is will the price be like 2016, the response is evidently not,” declared Glumineau, who has no intention of changing “a price policy that is quite well optimized for the property.” Jean-Valmy Nicolas, co-managing director of Château La Conseillante, was similarly clear cut: “It would not be right to release the 2017 at the same price as the 2016—in my opinion our pricing strategy should be based on relative quality, not relative volume.” He concluded that, “2017 will offer an opportunity to buy excellent wines at more reasonable prices.”
A handful of wines could argue the case for maintaining their 2016 release price. These wines are on an upward trajectory in terms of quality and brand, and were the big success stories of the 2016 en primeur campaign. According to Wine Lister’s Founding Members (around 50 key members of the international fine-wine trade), first growths aside, the most successful releases last year were Châteaux Lynch-Bages, Canon, Calon-Ségur, Figeac, Pichon Comtesse, and Montrose.
Canon and Calon-Ségur in particular were lauded for their reasonably priced releases, providing clear upside to the end buyer. On this basis, they should not really need to decrease to the same extent as their neighbors in 2017. “I could even go up and people would buy it,” mused Laurent Dufau, managing director of Calon-Ségur. “But I won’t,” he concluded, adding “I would rather maintain the trade’s goodwill.”
Nicolas Audebert is managing director of two of Bordeaux’s rising stars, Château Canon in St- Emilion and Rauzan-Ségla in Margaux. The acclaimed 2015 Canon was released at €50 per bottle exchâteau, and traded at €200 on the Place de Bordeaux in early April, said Audebert. “I know I could have done more,” he acknowledged (this goes for 2015 and 2016), but he is not convinced a higher release price would have created the same momentum behind the releases and the brand in general, and he is surely correct.
Or is it?
Audebert had not decided on release prices for the two wines when I spoke to him, but contrary to the main line, he declared: “I don’t believe for a second that prices will go down.” Indeed, the 2017 campaign won’t be without price increases.
At the time of writing, Haut-Batailley has already been released by its new owners, the Cazes family, with a 46 percent increase on the 2015—the last vintage to be released. What is more, offers from UK merchants obediently toed the line, showing their willingness to get behind the campaign even at such an audacious price. This move, in contrast with Palmer’s 20 percent decrease in the same week, underlines starkly that release prices for 2017 can be determined only in the light of each property’s individual trajectory, whether in quality or brand terms, or both.
“People were negative in December and January,” recalled Michel Reybier, owner of Cos d’Estournel, in early April, “but not anymore.” Reybier strongly resisted my observation that producers all believed the previous two vintages to be superior to 2017. “We’re not saying 2015 or 2016 is better!” he exclaimed. “Compared to 2016 [our 2017] might even be better,” he mused, making it quite clear that he didn’t necessarily feel compelled to decrease the price.
One producer put it more bluntly (and preferred to remain nameless as a result): “Sorry to say it girls, but there are still plenty of macho proprietors who look around them to see who has the biggest zizi, and it all comes down to who releases at the highest price.” For Ballarin, “in this campaign, a top brand will be one that puts generosity before its positioning—the goodwill is also part of the status.”
Yoyo effect
Gérard Sibourd-Baudry, chairman of Legrand & Co, thinks prices will go down, “unfortunately.” Why “unfortunately”? “Because I don’t think a brand is built on fluctuating prices, but over the course of time,” he explained, asking frustratedly, “Why is Bordeaux the only region in the world that has these yoyo prices?”
According to Edouard Moueix, it is precisely this “yoyo” effect that keeps people talking about price when they talk about Bordeaux. “In Burgundy the price always goes up, but in Bordeaux it can go down, so there’s always a hope, and in 2014 it happened,” he says. “That’s what’s excites people: buying en primeur and reselling in a few years to finance your cellar,” enthuses Moueix, who says that opportunity “doesn’t really exist with other appellations”.
“Bordeaux is an exception in the world of brands because the distribution of its wines depends not on producers but on a marketplace,” says Ballarin, referring to the Place de Bordeaux. “In that sense, Bordeaux shares characteristics with the stock market.”
Calling the shots
Ultimately, though, it is the producers who choose how much to release, when, and at what price, however much judicious advice they might get from courtiers and négociants. Frosts reduced production volumes by 40 percent across the Bordeaux region in 2017, so there is less wine to go around this year—not to mention the trend of châteaux keeping back more and more stock (short of withdrawing from en primeur altogether, à la Latour).
A reduction in supply—whether natural or artificial—allows producers to use en primeur more and more as a positioning exercise, and less as a vital channel for selling wine. And apparently it’s no secret: “They couldn’t care less whether they sell,” said the man who rented me my hire car at Bordeaux’s Mérignac International airport. Changes in release volumes this year will be varied, and it will be difficult to keep track of whether frost was the root cause or not.
As for timing, we saw an early start in the fourth week of April with Palmer and Haut-Batailley, but a string of impossibly timed bank holidays in France (landing on Tuesdays and Thursdays, and making it obligatory to faire le pont, or “bridge the gap”) more or less wipes out May. “We’d like to have an early campaign but May is complicated,” confirmed Philippe Dahlluin, managing director of Mouton- Rothschild. “I’d like to release before Vinexpo,” he said, adding “it’s possible”. Vinexpo 2018 (in Hong Kong) takes place at the end of May, so by the time you read this in print you will know whether he managed or not.
