Eurogeddon/2010 futures

[Houndsong]

I think the word was 2010 futures haven't sold well in the US to date in general. For the most part they seem priced higher than 09s, and I assumed that was due to the prevailing exchange rate. Now, every other day or so (e.g. today), the prevailing school of disaster du jour has the euro collapsing. Who gets burned on these futures in this scenario? Anyway it looks like the Euro was about $1.40~something then and is $1.28 today.

It seems to me that most futures players never reoffer futures at below initial offer pricing, although I understand Premier Cru has been doing this with some under the radar email deals. I can understand their not wanting to piss off regular customers who buy on the initial offer. It's been my experience though that it's only after the physical supply hits that the price reductions start, if they do at all.

Could we be in store for some major 2010 deals? Would the boycott come off in that case?

[JimHow]

I am a kind and reasonable dictator, Hound. If a reasonable case can be made for individual exemptions, or even a blanket removal of the boycott, I am all for taking the appropriate action, when and if the time comes.

[DavidG]

As with any currency gamble, those who bought with Euros when they were high are the ones holding the bag. Probably the wines have already sold through from the Chateaux to the courtiers and the negociants. Some have undoubtedly sold through to the importers and distributors. I'm not that familiar with contract terms, so I don't know if they pay in full prior to delivery. I think they do.

For the consumer, I would guess this means that prices will remain high on those wines already bought and paid for by the importers or distributors. Wine that's been held back that is yet to be released will likely be a "bargain," at least compared to original release prices, at least based on the currency effect. But there are other factors like perceived quality, how much wine is backed up in the pipeline in US distribution channels, etc.

And of course Jim is kind and reasonable, and amenable to reversing an edict if it no longer makes sense. Just don't call him a flip-flopper.

[AlexR]

The euro is threatened, but people are more afraid of what *might* happen that what has actually happened.

At 1.28 to the dollar, it is still worth 0.10 more than it was when first introduced...

Unless you're in the wine business, the way to look at this is *long term*.

What looks expensive or penalized by exchange rates now may seem like a really good deal in 10 years.
Of course, no one knows for sure one way or the other.
Which is why buying futures, for instance, necessarily involves a gamble.

Best regards,
Alex R.

[mike reff]

I am not sure that there will be much of a futures campaign here in the US?

[AlexR]

The 2011s will definitely be cheaper.
Still, as you say, there may not be much interest even so.

Best regards,
Alex R.

[Houndsong]

Speaking of 2011, I read, or should I say browsed a quip that it was a "technical winemakers' vintage." If I parse that correctly, there won't be much use for a 2011 futures campaign at all.

[JonB]

I've purchased a few of the "half-off" deals on 2010s. All of them have fallen within the blanket qpr exemption of $35?*.
As someone else commented, at this level of pricing there were a few that were around initial 2005 prices, which if quality is comparable or better, makes it okay in my perspective.

However, I think there is a point where there is a saturation of the market from high quality vintages, and the premium is just not worth it. Such is the case with me, my cellar, my age, and the 2010s. A 10-20% decline in the Euro translating into decreased local prices might mean a few more purchases, but not many.



*Although some of mine have been splits.