Reports of the en primeur system’s demise are greatly exagg

[AlexR]

… to paraphrase a quote by Mark Twain, upon seeing his obituary in the newspaper.

Here’s a well-written and thoughtful article:

https://www.thedrinksbusiness.com/2020/ ... xt-spring/

It doesn’t take a genius to see that the Bordeaux’s en primeur system, like so many sectors of the globalized economy, has taken a bad hit due to the corona virus. I have seen predictions for decades that the system would crumble or implode. And yet, it has survived through thick and thin – copied, but never equalled .

Still, the current threat is like no other and the timing of the upcoming campaign has been completely thrown off course. Wine merchants obviously cannot be expected to buy wines that no one has sampled, even though, if one is honest, the Union des Grands Crus tastings in late March/early April can hardly be seen as essential to buying... Wholesalers and importers are far more inclined to purchase based on a château’s reputation or what leading critics say rather than their own impressions. En primeur week comes across predominantly as a networking and information gathering exercise (plus the occasion to enjoy a lot of good meals!). It is nevertheless a brilliant and unique way of coordinating the whole region and arousing interest from all over the world.

I take exception to so much that is written about the en primeur system because pinning down figures – to be specific – is very elusive, and it is nearly impossible to generalize since the situation varies from estate to estate. Only the brokers based in Bordeaux are qualified to have a valid overview because they are in touch with all the negociants and thus alone feel the pulse of all international markets with any degree of accuracy. People living in London or Tokyo or wherever extrapolate from their (possibly entirely correct) analysis of the situation in their country, thinking that what they’re seeing is the same around the globe when, in fact, it is not.
Two Bordeaux châteaux in the same appellation with the same classification can have very different commercial strategies. By the same token, two adjacent European countries can have very different markets. And you cannot lump Wuhan and Edmonton together.

Furthermore, there is not just one way of selling en primeur, which is why so many commentaries cannot be trusted. When one reads that château such-and-such “came out” at such-and-such a price, that information can paint a totally wrong picture. Some of the top châteaux release in “tranches” and the first one can cover just a very small quantity and at a particularly attractive price just to “test the water”. The first tranche offerings of famous classified growths are immediately snapped up as soon as they are put on the market because everyone knows that further tranches will be more expensive. Therefore to say that this is the base price is extremely misleading.
The proportion of wine sold per tranche and, indeed, that which is kept back for sale at a later date varies tremendously.

It seems to defy logic when en primeur prices exceed those of the same wines from a better-reputed year with some bottle age.. This can only compute if seen as part of a very long, complicated distribution chain and the allocation system that functions all down the line to the consumer. This entails a sort of threat: “If you don’t buy this year, you won’t get any next year, or from now on”. The result of this is that so-called off vintages are often dumped, and the loss is accepted more or less philosophically. Voices are raised to say that this is wrong and cannot go on because it defies the laws of economics. Certainly, a series of lacklustre vintages – not to mention a worldwide recession/depression – would force estates to lower their prices, even dramatically. But that would in no way threaten the en primeur system. Adjustments, perhaps even painful ones, would be made. Period.
President Calvin Coolidge famously said that “The business of America is business”. The same attitude prevails in Bordeaux. While the supposed greediness of the Bordelais is frequently denounced, the châteaux are also willing to react quickly, and to pay the piper, should things work against them. It’s as simple as the law of supply and demand…
It is interesting to see the comparatively little whinging about price increases in Burgundy.

Is any other wine region as vintage-conscious as Bordeaux? It is not at all rare to see wines from the same château double (or halve) in price from one year to the next. The market for Bordeaux great growths is indeed volatile! Their price is quoted daily and, in some instances hourly, on the internal market, the “place de Bordeaux” accessible only to négociants. This is a complex reality and it takes a brave man, or a fool, to make across-the-board statements about it.

The article cited at the beginning of this post touches on a number of worthwhile points. I would only take issue with the timing of the proposed 2019 campaign. I think it would be better in September 2020 than the spring of 2021. I agree that March is not the ideal time to taste the great wines. September would make a more realistic evaluation possible as well as give buyers an idea of the volume of the future crop and, to a certain extent, its quality. The author of the article says that September is not good because great wines from other regions are released then. It that is true, I would appreciate knowing more about this. I do not agree that there would be a lack of interest because of lead-up to the Christmas season. Early September would be fine in my opinion since the harvest would only theoretically have just begun for dry white wines, accounting for only a fraction of Bordeaux’s production. If September were chosen, it would be wonderful if the tastings and campaign stayed in that time frame from now on.

Whatever is decided, I fully agree with the author that convergence is very important. Piecemeal releases by the big guns would hurt Bordeaux. Commercial efforts need to be coordinated.

[AlohaArtakaHoundsong]

I have not been paying any attention to this, even before the coronavirus manifested, so my question is, does anyone not ITB--meaning consumers--even care about the 2019 vintage? Were there even harvest reports?

I have very little interest in this vintage, but I recall that the failure of a certain tastemaker to participate in the 2002 tastings due to similar travel fears provided an absolute boon to the consumer. One that our brethren were profiting from as little as, what, two years ago with the famous MacArthur's Massacre.

[Tom In DC]

I wonder if September might be a problem for the chateaux selling the previous year's vintage (say, 2019) - isn't that late enough in the growing season to have a good idea of the quality of the current year's vintage on the vine/being harvested (2020 in this example)? If the vintage still on the vine looks good, buyers might not be in any hurry to buy the vintage on offer.

Of course, knowing that the current year is looking weak would allow the chateaux to demand more for the vintage on offer, but weak vintages seem to be few and far between these days.

[greatbxfreak]

I agree with the author that whole ting should be moved to spring 2021.

We maybe have cure and vaccine against coronavirus already in the end of 2020.

[Claudius2]

Folks
I think that there are two separate issues here:

1. Wine in the age of COVID-19 - events, launches and the like can't happen for some time.
2. The en primeur process, including tastings of samples on an ongoing basis.

The en primeur system has been going on for a long time, and in my case, I first bought Bordeaux this way from the 1982 vintage.
I just wish I'd bought a few truck loads.....

There is little doubt that September this year is just too early.
I make this point on the basis that even if the C-19 virus is under control, then there is still a need to practice safe distancing and good hygiene for some time to avoid another spike.
So I see no choice but to put off tastings until next year. Even the Olympics finally worked that out after some months of arguing it out.

So the current crisis will obviously affect both Bordeaux and other vintners for 2020, but that in no way means that the en primeur system is dead.
Over here in Singapore, the EP system is often the only way you can get any decent Bordeaux at anything like reasonable prices, and without having to buy at auction.
The market here is simply too small for retailers and importers to carry large amounts of unsold stock.

[sdr]

We maybe have cure and vaccine against coronavirus already in the end of 2020.

At least in the US, that can’t happen under the current rules. FDA (Food and Drug Administration) regulations require a 14 month trial of new vaccines in healthy people (to look for side effects). The Phase I trial being conducted for that purpose began a couple of weeks ago. The estimated time to ramp up production of the vaccine, if safe and effective, is 2-3 months. So we probably won’t see it until summer 2021, which should be adequate to protect us for the autumn 2021 season.

I agree with you about the timing of 2019 EP campaign.

Stu

[AlexR]

Stuart,

Don't you think the FDA would - seriously - bend the rules if so many people's lives were at stake. If no more for than political reasons...

The very pertinent question was asked above about the 2019 vintage. Normally, Bordeaux would be a hive of activity at the time, and the "official" vintage report sent to the world's media.
But, this hasn't haappened.

Far too little has been said about the new vintage. The feedback I've been hearing is that it is "good" at the very least, but no comprehensive opinions will be possilbe for quite some time.
This is a really weird situation.

Best regards,
Alex

[Tom In DC]

Not Stu, but I would hope the FDA's of the world would not bend the rules for a vaccine. Administer it to 8 billion people? Too big of a chance that it kills more than it saves...

[stefan]

The FDA has fast tracked vaccines, including at least one this year:

https://www.biospace.com/article/releas ... v-012-968/

[AKR]

I don't think the issue is really about the physical mechanics of hosting some kind of EP events within Bordeaux, rather, I think its really about entering a global coordinated recession whose depths will be perhaps be far worse than 2009. And how is a luxury product going to be sold under those conditions?

(China's local version of LVMH just filed for bankruptcy as an example, unable to tolerate their 3-4 mos of lockdown)

The grand concept that an agricultural product - grapes grow every year - could be infinitely warehoused - and financed by (formerly) compliant banks/merchants - while prices rose ever more always seemed totally nutty. Especially for the estates that held back huge amounts of their production and released it via auction or limited sales a decade later.

Maybe Le Pin, Lafleur, Petrus are genuinely scarce Veblen goods, but all the rest of the pantheon of wines are subject to the iron laws of supply and demand. And I think global demand has taken a huge shock. Look at US unemployment claims...this week was a 10x standard deviation move up. It will likely double the unemployment rate in one week. And the global hit is likely just beginning...

[dstgolf]

An early Phase 1 trial on a cover-19 was given to the first patient in Seatle 12 days ago. Before it gets to the general public we are still likely a year + out and that is fast tracking.

FYI: https://www.livescience.com/first-perso ... trial.html

[Tom In DC]

Fast tracking is not what I meant by "bending the rules". Danny's article, for example, says the test subjects will be observed for 14 months to see if a) the vaccine is safe and b) if it creates any immunity.