Article on Wine Searcher summarizes the problems of 2022 Bordeaux.

[Musigny 151]

https://www.wine-searcher.com/m/2023/07 ... -bad-taste


A excellent article. Sums up my fairly negative thoughts about the vintage. The Bordelais got greedy (again) and the sales were mediocre.

Finally there is the beginning of pushbacks from the negociants. There was always a certain tension between chateaux and trade, and lately, the chateaux have been dominating.

The fact that they are still considering the 2019 vintage as a lost opportunity, tells me that they have become both way too greedy and too complacent.

Negociants are in business to make money. The fact that in 2019 they were finally able to do so should be something that chateaux should understand. Instead, all we hear about is that the châteaux are whining about how much money was left on the table. The system worked because in some years, the trade was able to make money. If instead, the estates keep all the money for themselves, they risk killing a business model that has been effective for centuries. The threat of losing allocations, once considered so precious, will no longer be the stick to threaten the merchants with. As I said, if they are not making money, there is no incentive to buy.

The last time that the trade felt this beaten up, was in 2008, and only because of massive Chinese interest in Bordeaux, was a crisis was averted.

The 2022 campaign may have been a problem, but it is fixable. It is unlikely to happen in the near future, but somewhere down the line, I expect there’s some of the remaining stock to be quietly sold at lesser prices in order to average out the high cost of the initial opening prices .

Hopefully this is a wake up call. The negociants have been on the receiving end since 2005, but the calls for change are very loud this year.

[Adrianthemeatball]

Great article, hopefully it is actually a wakeup call for the chateauxs. The EP pricing here in Canada just released last week and the prices were scary high.

[greatbxfreak]

Musigny151,

Very interesting article but it's nothing new. I think negociants have been crying a lot since 2009 vintage.

Yes, some chateaux pushed the price too high up, but at the same time some were underpriced in recent years, like f.i. Beausejour D.L, and Carmes Haut Brion. I purchased both Beausejours, with Becot being half a price of D. Lagarrosee.

But if you look at Meyney, Haut Marbuzet, Corbin and Moulin Riche (!), there is an incredible price/quality ratio. The latter is a crazy value for the bucks. In 2018, the owners (Cuvelier family of L. Poyferre) made a second wine of Moulin Riche, named M de Moulin Riche. It contained whole 69% P. Verdot and was a revelation! I purchased all four plus Phelan Segur.

Mark - what do your friend John Gilman think about 2022 vintage?

[Musigny 151]

I think there are plenty of great Bordeaux values out there. In fact, compared to Burgundy, Bordeaux even at the high end is a terrific value. But they have huge quantities to sell, and plenty of competition, so the pricing and the message behind the pricing, should not be “let’s screw the consumer.” As the article points out, they are three times removed from the consumer, and that means they really do not understand the marketplace the way they should. They are also hurting the people who are a conduit to the end users, the negociants.

[AKR]

Interestingly enough I had logged on intending to share the link, but Musigny151 beat me to it. It's an informative article, but I don't think there is anything particularly new/fresh for the BWE. I have felt for the last 10-15 years the market structure is imbalanced, and it doesn't make sense to spend either time or money thinking about it while the juice is so far away from consumption.

It makes more economic, and gastronomic, sense to consider subscribing to our rancher friend's annual offers of lamb, goat, or heritage turkey. Those cannot be purchased with a mouse click upon maturity, unlike the overwhelming majority of wine that is proferred EP. (Perhaps exempting Comte F. who might get access to real rarities)

William Kelley recently discussed some of these issues in a podcast that just dropped, that I listened to this afternoon.

https://www.xchateau.com/the-rise-fall- ... -advocate/

Some of his high level thoughts, cribbed from the show notes, include

Bordeaux’s downfall

*Lost commercial influence over the past 20 years
*Conversation of wine has been around “terroir” and the Burgundian model
*Aggressive pricing (particularly of 2010 en primeur campaign) also drove away many traditional customers - many wines still not worth what they were sold for en primeur from the 2009 and 2010 vintage campaigns
*Worries that 2022 may have a similar fate
*Some are trying to replicate Bordeaux scarcity (produce less Grand Vin, more 2nd / 3rd wines) - the region/producer may be too big for this strategy to work

[Musigny 151]

I don’t think there is any doubt that buyers of 2022 could buy most of the wines for less over the next five to ten years.

[AlexR]

The same sort of article could have been written years ago because it is not exactly new that better, older vintages have been availabe at a lower peice than en primeur.
Yet still the system continues..
Its bubblebursting collapse has long been predicted but has never materialized.

I'm not really defending the en primeur juggernaut so much as attesting to rhe fact that this way of selling Bordeaux has survived and does not seem seriously threatened. There's a system of checks and balances that, when seen from à mid-term perspective, must make commercial sense, whatever we may think.

AR

[AKR]

But is it really a 'juggernaut' ? Are consumers actually avidly reading reviews and loading up on EP offers?

I don't have data to support my hunch, but from what I observe on various wine boards, I don't think that is happening.

There was some enthusiasm for 2019, especially for those prowling the concrete terroir of Costco, which sells at fixed margins over their cost. And perhaps that will rekindle interest in a region, as it illustrates that when circumstances (price and value) line up, large quantities of fine wine can be distributed globally. Discussing 200 cs unobtanium vs 20000 cs 4th growths on a chat board likely plays better for the latter, at least for traffic/participation etc.

[Musigny 151]

The same sort of article could have been written years ago because it is not exactly new that better, older vintages have been availabe at a lower peice than en primeur.
Yet still the system continues..
Its bubblebursting collapse has long been predicted but has never materialized.

I'm not really defending the en primeur juggernaut so much as attesting to rhe fact that this way of selling Bordeaux has survived and does not seem seriously threatened. There's a system of checks and balances that, when seen from à mid-term perspective, must make commercial sense, whatever we may think.

AR

I certainly don’t feel the en primeur campaign is going to disappear, because some demand is better than none. Bordeaux tends to be reactive, it will deal with the short term fall out adjusting prices here and there and fail to deal with the overriding sinkhole of the relationship between trade and estate. The system is rigged, and the chateaux are getting away with murder.

[stefan]

I just bought some low priced Bordeaux for a large BBQ. I was surprised what was available for around $20--simple but reliable wines like Le Conseiller and Greysac. I don't see any CA Cabs for $20 that I would enjoy. And as Izak mentioned, at a higher level, wines like Meyney, Haut Marbuzet, Corbin and Moulin Riche have great QPR. Only the fancy Bordeaux wines have low QPR.

[Comte Flaneur]

The reason the system has the long term resilience that Alex alluded to is that ultimately the laws of economics apply.

A good example is when the Bordelais mis-priced the (mediocre) 1997 vintage after the acclaim of the 95 and (particularly) the 1996 vintage. The 1997 was nowhere close and attempts to price off the momentum of the previous two vintages defied the laws of economics, and were doomed to fail.

I remember when Farr Vintners here in the UK were selling 1997 - and then 1998 - Ducru for £220 ib a case, roughly half of their release prices iirc. The absurdly priced 2009 FGs halved too.

The case for buying 2022 when cash is no longer trash - when the opportunity cost has risen - versus 2020, 2019, and 2916, more proven vintages - looks unjustifiable and flimsy.

So Mark is surely right. We will be able to buy many of these 22s at lower prices. The Bordelais got greedy again and the market will once again teach them a lesson. Bordeaux is not burgundy where supply is tiny and quality has risen inexorably. But the system will adjust and survive.

[AKR]

I just bought some low priced Bordeaux for a large BBQ. I was surprised what was available for around $20--simple but reliable wines like Le Conseiller and Greysac.

Truth To Power!

[AKR]

The reason the system has the long term resilience that Alex alluded to is that ultimately the laws of economics apply.

A good example is when the Bordelais mis-priced the (mediocre) 1997 vintage after the acclaim of the 95 and (particularly) the 1996 vintage. The 1997 was nowhere close and attempts to price off the momentum of the previous two vintages defied the laws of economics, and were doomed to fail.

I remember when Farr Vintners here in the UK were selling 1997 - and then 1998 - Ducru for £220 ib a case, roughly half of their release prices iirc. The absurdly priced 2009 FGs halved too.

The case for buying 2022 when cash is no longer trash - when the opportunity cost has risen - versus 2020, 2019, and 2916, more proven vintages - looks unjustifiable and flimsy.

So Mark is surely right. We will be able to buy many of these 22s at lower prices. The Bordelais got greedy again and the market will once again teach them a lesson. Bordeaux is not burgundy where supply is tiny and quality has risen inexorably. But the system will adjust and survive.

I wonder when the chateaux will require purchasers to effectively commit to ten year subscriptions. Maybe at a soft level that is being done - i.e. pass on a year and future allocations are in doubt - but more formally. That would be a way to spread the weather/vintage risk more.

[Musigny 151]

I don’t see any reason why the negociants would do that as they have no say in the pricing.

What I am expecting to see more of are cases of mixed vintages, which will help both trade and chateau to move bad vintages.

[AKR]

I don’t see any reason why the negociants would do that as they have no say in the pricing.

What I am expecting to see more of are cases of mixed vintages, which will help both trade and chateau to move bad vintages.

I think it's basically the same concept, spreading the downside/upside of bad/good years. Buyers might not have a formal 'say' in pricing, but clicking 'delete' on an offer in the inbox is speaking too. And I'd think when an industry is pushed a little toward being long term rationality - and away from boom / bust cyclicality - perhaps all sides will listen better.

==========

I think the root issue is that EP sales are a form of hedging (like forward sales for oil drillers or corn farmers) but the producers are now blessed with thick capital bases and do not 'need' to hedge, thus the historical bargains available EP are now gone, and the (buying) world has not understood nor adjusted in the last 15-20 years. It's comparable when a commodity market shifts from backwardation to contango.

[AlexR]

Two comments here.

All of us are tempted to judge the market by what we see around us, i.e. where we live. But, the market for Bordeaux is well and truly international. This means that generalizations on a global scale are difficult to make, as tempting as this may be.

Older better vintages for less money is perceived as only theoretical by many consumers. For instance, I have a decent cellar of 1,200 bottles, but have never bought a single one at auction, and precious little over the internet. OK, this may be a function of my age, but it does goes to show that the pipeline is not fluid and easily accessibe to people everywhere.

Alex R.