Bordeaux 2009 En Primeur
In case you haven’t heard, the 2009 Bordeaux en primeur campaign is in full swing. Most chateaux have posted prices for 2009 during June and July, 2010. This means that many wine merchants have set their prices and are matching them to the allocations they have received from the chateaux thru their negociants.
Here is what the most important writers have said so far:
"I have never given so many really high scores when tasting en primeur anywhere. The wines were, in general, a huge pleasure to taste"
Jancis Robinson MW
"A lot of people make comparisons to 1982, which I have to agree with to some extent but, honestly, I think they are better."
James Suckling, Wine Spectator
"2009 is an incredibly exciting vintage of opulence, power, and richness, yet the better wines have a precision and delicacy that is unprecedented. First, and most importantly, for some Médocs and Graves, 2009 may turn out to be the finest vintage I have tasted in 32 years of covering Bordeaux. From top to bottom, 2009 is not as consistent as 2005, but the peaks of quality in 2009 may turn out to be historic."
Robert Parker
In summary, more wines have received higher scores from more journalists than ever before! These wines are still maturing in barrel and will not be available for delivery for two more years. By the time they reach wine shops, how much will these wines sell for? For consumers, does it make any sense to purchase wines en primeur years before their release?
Actually, Bordeaux has always been sold in barrel by the wineries. For centuries, the oak barrel was used for storage and transport of wine. Barrels traveled to a merchant, perhaps in London, or elsewhere, where the wine could be aged and sometimes blended before bottling for sale and distribution. Although many wineries have been bottling at the chateau for many years, this practice did not become compulsory until 1972, but by the time the wines are bottled, most of it has been sold already.
The history of French wine was greatly impacted by changes in politics, culture and regulations that make simple explanations difficult. Anyway, I will try to highlight some of the important reasons behind the invention of the en primeur system in Bordeaux.
It is well known that the Romans brought vine cultivation to France. It was difficult to transport wine and it was more practical to make it locally. The business of trading wine over long distances did not start to grow until the British Empire developed a thirst for the claret from Aquitaine. It also helped that Bordeaux (previously called Aquitaine) remained an English possession between 1154 until 1453, when it was annexed by France. Tax breaks during English rule helped to increase trade out of Bordeaux for many products besides wine. The area prospered as a major trading port and it attracted business and investment in the area while Great Britain became a the largest market for Bordeaux wine exports.
During the 17th Century, Dutch engineers were contracted to build drainage channels in the Medoc, which is the land area located north of the city of Bordeaux and faces the river all the way up to where it opens up to the Atlantic. Until that time most of the vineyards were located in higher elevation areas south of Bordeaux, in the Graves appellation. The Medoc was mostly marsh land, prone to flooding and covered with grasses. Cattle, not grapes, were raised there. However, there were gravelly areas that seemed suitable for grapes, if they could be drained and kept dry.
Once the land was drained, the economic opportunity attracted merchants, British bankers and local nobility who purchased large areas of land for development into vineyards. The wealthiest owners also built castles that feature prominently on the labels.
This rapid expansion created an economic boom, but these new winery owners were not of the type we see today. They regarded their Bordeaux estate as a country retreat with a thriving agricultural sideline. They were not involved in the running of the winery or the vineyards. That job was left to the régisseur, who acted as the estate manager overseeing both the vineyard and the winemaking. This business model is still in use at many wineries owned both by large corporations and family consortiums. Even today, some owners tend not to be very involved in the production.
To deal with sales and distribution, another layer of merchants was added. These were the courtiers and the negociants. Their job was buying and selling on a commission. As prices and distribution of Bordeaux increased, negociants increased in number and influence to the point where they are the only people who normally sell Bordeaux wine. The negociants are allowed to purchase the wines en primeur, in effect legally owning the production of the chateaux for years before release. This method of distribution is written in French law so wineries cannot sell directly. There are no tasting rooms at the Bordeaux chateaux.
Another reason for establishing this system was that production at the major properties is very large and wines take from two to three years from harvest to bottling so many of the costs tends to accumulate. Selling en primeur allows payment of all harvest and personnel costs before the next vintage is picked.
Another advantage of this system is that the wineries can sell all the wine in a few days. The negociants and merchants allowed by law to purchase directly from the wineries have to outbid each other sometimes for limited release allocations of the best wines, which tend to be the most expensive. To finance these transactions, negociants sell futures to distributors and importers, and on down the chain to consumers.
Of course, this system is not perfect. There are other products which are commonly sold as futures in the open market but Bordeaux operates a relatively closed system in which the allocations are offered to merchants by seniority, and are not entirely based on price. Negociants customarily take reservations from their regular customers assigning value to seniority, and this trickles all the way down to wine shops who also tend to take en primeur orders from their loyal customers first.
Not all the wine is sold at the same time. Usually wineries offer a percentage of the wine to their oldest customers first at the lowest expected price for the wine. By the time a second or third offer is made by the winery, the willingness of the buyers is evaluated to determine how much more to charge at the second and third offering.
Some people have noted, and rightly so, that sometimes wines end up retailing for less than their en primeur price. We need to remember that sometimes there may be up to 30,000 cases of a particular wine produced in an average year. The negociant may own several vintages of that wine, plus many others. Given the price and demand variation according to vintage, they may decide to dump a particular vintage at a lower price, and make the difference in a higher rated vintage with a higher profit margin.
Sometimes there may be a need to create cash flow, but other reasons may come into play. Although a few wines can increase in price as time passes, this is not the true most of the time. Speculators who buy wines to re-sell tend to drive prices up for the highest rated wines. Collectors tend to purchase the same wines every year, regardless of price. Vertical collections (including consecutive vintages) tend to sell for a higher price later on at auction.
The economic benefit of purchasing en primeur a few cases or bottles for a consumer who intends to drink his wines is not very big. The main reason to purchase should be for wines that you want to make sure you want to have, for one reason or another. Having the opportunity to acquire some special bottles to drink periodically from your own cellar should be the best reason, regardless of whether the wines will increase or decrease in price with time.
The 2009 en primeur sales have created a frenzy with speculators and collectors. It is likely that the First Growths will remain very expensive and will continue to increase as their rarity is increased by consumption. Once released to wine shops and restaurants, the top Chateaux wines will remain out of reach for most of us for a long time.
The three reviewers quoted in this article have published lists of recommended wines to purchase en primeur. I believe a few of them are available in Japan from Berry Bros. & Rudd. They have an office in Tokyo now. Contacts available on their website. But hurry! It is reported that Berry Bros in London sold 700 cases of Chateau de Tertre in an hour, and 3,500 cases of Chateau Batailley in four days!
The US market has not been as excited about purchasing the 2009 vintage, because of the high prices are out of sync with the economy. Asia and the UK are the leaders purchasing this vintage so far.
