2012 saw the beginnings of change with Chateau Latour announcing that it will no longer continue to sell wine at En Primeur from 2012. Instead they will keep complete control of their wine and sell it when they consider it to be ready for drinking – which could mean that some vintages will not be released for years. Most importantly it means that Latour can control the supply of its wines and play the markets directly rather than watch others do it.
Does this also mean Latour will dispense with the traditional courtier / negotiant system and sell direct? Probably. Latour is owned by one of the world’s richest men, French billionaire François Pinault who also owns Gucci, Yves Saint Laurent and Christie’s auction house. Christie’s is the largest auction house on the planet with 53 offices in 32 countries with 10 sales rooms across the globe. It was also the first auction house to exhibit works in Beijing, China, breaking the international barrier. They held their first sale in Hong Kong in 1986. With that sort of well-established retail and distribution system behind Latour there is no reason why the chateau should not be able to sell direct to consumers and bypass the existing Bordelaise system.
What’s more Pinault has been expanding outside Bordeaux – in June 2012 Pinault bought an ouvrée of vineyard from Chateau de Puligny Montrachet and two ouvrées of vineyard from the Montrachet Grand Cru Bâtard-Montrachet. Pinault already owns vines in Burgundy – in 2006 he purchased Domaine René Engel and renamed it Domaine d’Eugénie after his grandmother. Pinault has also expanded into the Rhone with his purchase of Chateau Grillet in 2011 from the Neyret-Gachet family.
This expansion makes perfect sense when you consider the developing Asian market – first there was the Bull Run on top flight Bordeaux fine wines in China, followed by a rush to acquire Burgundy by those rapidly educated Chinese palates. The fine wines of the Rhone will be next. Robert Parker is well aware of the situation, tweeting on New Year’s Eve that the smartest wines to buy in 2012 are the 2010 Northern and Southern Rhones . . .
Will we see more Grand Cru Classé chateaux expanding beyond Bordeaux in 2013? Probably not. Only the top flight chateaux have deep enough pockets and as the fine wine market is static they will be holding on to their cash.
Will Bordeaux’s elite chateaux follow Latour’s suit and leave the En Primeur system? Probably not. It will depend on several factors – the paramount ones being a sufficient reserve of back vintages and a big bank balance to mop up the fall in cash flow resulting from a with-held vintage. I wouldn’t expect to see any top notch chateaux take the plunge to leave the En Primeur system in 2013 though – they will wait to assess how well Latour does with its venture. Leaving the system is a gamble and Bordeaux chateaux owners don’t like change, let alone risks.
So, 2012 saw the top flight Bordeaux chateaux considering supply and demand, expanding their vineyard holdings and investing in new cellars and renovations. It also saw two First Growth Sauternes playing with the market by not producing a wine for 2012 due to insufficient quality, put down to 2012 being a bad harvest: Yquem and Rieussec. A different story but the same game: supply and demand.
Will 2013 see more inclement weather (I hope not, we are surrounded by floods here and fed up with mud!) and if it does will we see more chateaux refraining from making a wine? Probably not. I doubt that d’Yquem and Rieussec will miss out on 2 vintages in a row and the fact that fellow producers in Sauternes have made good wine in 2012 has led to a backlash against the two First Growths motives. However should Bordeaux’s weather in 2013 be bad then who knows? If the jet stream continues to shift from the patterns we have become used to and maintains its slow meandering into 2013 then Bordeaux might have another challenging harvest ahead. The only respite could be the 50% chance that El Nino might kick in and bring with it a heat wave.
Thanks to the weather in 2012 across the globe the wine lake that has built up over the years is now draining with many countries reporting a slump in production. Prices are reportedly set to rise due to this dip in supply. However Bordeaux’s production was not as badly hit as some (it’s around 5% down compared to 40% down in Champagne). There is also still a lot of stock left in Bordeaux – the 2011 vintage did not sell well. So I don’t think we will see Bordeaux fine wine prices rocket in 2013, or at least I hope not. We may see an increase in the price of Bordeaux wines in the under £20 bracket as these producers do not have the bank balances to fall back on when the harvest is troublesome.
All in all I see 2013 keeping the status quo rather than being a year of change. But could I be wrong. Will we see Bordeaux announcing yet another ‘Vintage of the Century’ in 2013? Probably not.
Happy New Year!