Did China Save Bordeaux (2010 futures)....

[JonB]

http://www.winespectator.com/webfeature/show/id/45534


Interesting article. Not far from other reports that by value the 2010 campaign was comparable to 2009, but didn't sell as well by volume or as many labels; there's evidence of more purchasing for speculative purposes.

After seeing few wines having positive appreciation from first tranche pricing in 2006, 2007, 2008 and 2009, is it any wonder that American's didn't buy heavily into the 2010 futures campaign, regardless of the record setting prices? One could arguably include 2005 in there as well.

They also lay out the "saving face" issue in detail, which seems to be the case.....the Lafites get consumed, and the relative price is inconsequential.

[DavidG]

Interesting article. People have been warning about this:

At its essence, the futures game is one of opportunism, nowhere more so than China. “If the Chinese cannot make big money in the primeur business, they will quit,” said Laqueche. That is particularly worrisome, because a large amount of Bordeaux’s grand cru classé now goes to China and Hong Kong. “The new concern over the long term is the geopolitical balance of wine,” said Laqueche. “Shifting from loyal customers to new customers—that’s an upside-down way of thinking. Perhaps it’s a historic move but it’s a dangerous one. We need to maintain traditional markets.”

for the past couple of years. IMO the "loyal" (?? - meh, not so much) US market would come back if prices dropped to 2005 levels or lower. Diageo's absence is certainly a limiting factor but if the prices were attractive enough the wines would find their way here. If prices remain high and China bows out too, all those massive new cellars the Bordelais have been rumored to have been building will be bursting at the seams.

[Houndsong]

JonoB says the Chinese do not buy futures, just released prestige wines they can use to grease biz transactions immediately - am I misquoting you Jono?

How do you gift a future to bribe a high-ranking gov't official or business associate?

[JonB]

I've also read the demand for futures by Chinese consumers is low, but there appears to be demand from intermediaries hoping to sell the bottles for profit on arrival.

[JonoB]

Any futures sales to China is to merchants and businesses.

If anyone thinks otherwise, I would advise them to actually go and visit the country!

Hound, you did not misquote me at all.

[Tom In DC]

I also intrigued seeing:

...particularly since China's nouveau riche were forced to take wines they didn’t particularly want in order to get their hands on the Lafite and other must-have gift items.

where the implication seems to be that the wines have already been sold through to the "nouveau riche" consumers!

Bundling has long been the case in the US, albeit usually on the sly, but it will be interesting to see what happens to the unwanted bottles. Do they sit in the importers' warehouses (climate-controlled, right? ) for few years and then get dumped? Maybe the "crash" takes a few years and only affects non-Super Seconds and below? But I won't be a buyer of anything I can't taste first. Anyone remember Katrina?

[DavidG]

Well, perhaps the prices don't seem so high to the Chinese since the empty bottles can be re-used for counterfeits?

[Claudius2]

Guys
A lot of this is just self-indulgent, anecdotal nonsense.
The sales of 2010 in Singapore and HK were lesser in volume but higher in value than 2009, and according to the importers I talk to here, China was marginally better in 2010 than 2009. Yet that hardly means China saved 2010.
Other reports have indicated that 2010 demand was strong in traditional European markets and while Asia is increasing buying, it is not the huge growth that some talk about.
It would be nice to see ACTUAL data rather than opinions and anecdotes here.

[Bacchus]

Well, after reading John Gilman's report on the 2010 vintage, maintaining the boycott might not be that difficult. He's obviously not as big on it as so many others. Is Ch. Cantemerle exempt from the boycott?

[Houndsong]

It would be nice to see ACTUAL data rather than opinions and anecdotes here.

Given the opacity of this market, there's a niche for a channel-checking, dirt-digging sleuth. Call it "Bordeaux Underground".

[JonoB]

Claudius, it is almost impossible to get figures from futures; because no one actually releases them! So it will always e speculation.

With price increases, they could have only sold half of 09, but taken the same amount of money. That doesn't mean a good campaign, because futures margins are minuscule in comparison to retail margins.

[Bacchus]

Speaking of the fraud surrounding Lafite in China, this is hilarious:
http://www.wineberserkers.com/viewtopic.php?f=1&t=51440