Entente Cordiale

A new mood of co-operation between the merchants and producers of Bordeaux is helping to improve the quality of the wines. Nick Faith welcomes a return to sanity

AT FIRST GLANCE it looks as if Bordeaux is moving confidently backwards to the good (or if you prefer, bad) old days when even the grandest estates were in thrall to the Chartronnais – the family-owned merchants based on the Quai des Chartrons in Bordeaux. They bought the wines soon after they had been fermented and "matured" them – a process which usually involved an added dollop of stronger wines.

In the 1960s many estates declared their independence by bottling their wines themselves. They took complete command as a result of Bordeaux’s Great Crisis when the Chartronnais’ finances proved unable to cope with the surge of prices in 1972-73 and the even more resounding crash that followed.  One of the leading familes, the Cruses, even had to resort to a massive fraud which led to a sensational trial. 

At that point the estate-owners, large and small, came into their own.  Unfortunately, they were (and still are) largely insulated from the final buyer, unless the estates were owned by the merchants. Otherwise they could set their prices in the traditional fashion – "five growers lying to each other", as one expert once put it to me – each one trying to outdo his neighbours.

This insularity naturally leads to excessive prices (most obviously in 1997) and a permanent tension between the growers and the merchants on the Place de Bordeaux, still the biggest market for fine wine in the world. At the same time an increasing proportion of the region’s 8,000 or so lesser estates were trying to sell their wines directly through every possible outlet: by direct mail, to visitors, at fairs up and down the country or to restaurants.

Very often they were forced to sell to France’s notorious Grande Distribution, the hyper- and supermarkets which account for four out of every five bottles of AOC wine sold to the French public.  But now – at least below the level of the classed growths which account for a tiny percentage of the total – sanity is showing its head for the first time in Bordeaux’s 800 year history of class war between producers and salesmen.

It is even simplifying the consumer’s task of choosing between Bordeaux’s 57 appellations and 12,700 names. The unprecedented mood of co-operation, a recognition that both sides need each other, was shown most obviously last October when the growers of Bordeaux and Bordeaux Supérieur organised a conference.

This brought together their members – including those in co-operatives whose wines are generally, albeit belatedly, improving – and the dozen or so leading merchants whose brands are now increasingly dominating the scene.

As a result it is becoming increasingly clear that most of the several hundred firms registered as merchants will be playing only minimal roles in Bordeaux’s new world.  Indeed, the biggest brands increased their sales of AOC Bordeaux by 20 million bottles between 1999 and 2002 and now account for over a fifth of the total, whereas sales of other brands and generic wines actually fell slightly over the same period.

The bigger merchants have helped ensure that about two-thirds of the claret sold in la Grande Distribution is now branded (although this includes BOBs which account for nearly a tenth of the total) and a mere third bears the name of a château.  By contrast, five years ago the proportion was the other way around.  Moreover the names on many of the brands is not directly related to that of the merchant, the opposite of the case before 1973. 

Today the leading merchants are selling wine from estates which they either own, lease or over which they enjoy exclusive sales rights, as well as from dozens of petits châteaux and brands made from wine from growers who have become fed up with selling their wine on the open market.

"Today", says Allan Sichel, chairman of the family firm, "we do a case by case study of every estate we work with to see whether the wine should go into a brand or be sold under its own name."

To supply their own brands the merchants can offer growers up to a 30% premium above the market price for basic claret. Astonishingly, this has not risen since 1986, so that wines entitled to the name of Bordeaux are still being sold at around €1.5 in la Grande Distribution. Not surprisingly, the smaller estates are increasingly choosing to be involved with the merchants.

"There are a number looking for shelter as an insurance policy," in the words of broker Bill Bolter.  Even today, despite the fact that the average holding has grown steadily to reach over 25 acres, few of these producers will still make as much as 100,000 bottles or more, and thus have absolutely no power when confronted by the major buyers.

In the past a number of merchant families also owned properties and in some cases, like Cordier and Ginestet, then owners of Château Margaux, would sell their wines only through their own sales network, often using the name of the property as a door-opener.  Today the classed growths owned or controlled by merchants are used almost entirely as flagship wines – the brand Michel Lynch is sold completely separately from Lynch Bages even though both are owned by the Cazes family.  But the Cazes use Michel Lynch as a "laboratory for Lynch Bages, enabling the winemakers to try out new techniques" explains managing director Malou le Sommer.

In setting up the brand she says, "We have passed from merely being a producer into the commercial world." As did the pioneer Baron Philippe with Mouton Cadet in the early 1930s. Nevertheless, the Cazes’ family’s own properties, including Les Ormes de Pez as well as Lynch Bages, are still sold exclusively through the Place de Bordeaux.

The brandmakers’ control now extends right back into the vineyard, for they are going even further than their predecessors who did not concern themselves with what went on in the vineyards and wineries.  They are all employing oenologists who supervise the whole process and ensure that their suppliers don’t over-produce or harvest too early.

As long ago as 1967 Allan Sichel’s father, the late Peter Sichel, went one step further by building his own Bel Air winery in the Graves south of Bordeaux so that he could buy grapes and not have to rely on the growers’ often elementary winemaking skills. But only recently have others begun to follow his example.

The firm that has gone the furthest is probably CVBG Dourthe- Kressmann. Its boss, Jean-Marie Chadronnier stresses: "We have found another vocation added to the one of the traditional merchant which we have been practising for so long. It is that of wine producer." Its businesses run the whole gamut, from estates it owns and controls, through its own winery and its brands.

It is also – albeit not with classed growths where it would be far too expensive to hold stocks too long – performing the historic role of the Chartronnias of négociant éleveur, the merchants who mature the wines in their cellars for several years.

This sort of tender loving care is not confined to Dourthe and is helping the vital improvement in the average quality of the wines.  So is the fact that the region now has a far higher proportion of Merlot than it did.

Thousands of growers realised over a decade ago that the future is with the softer, quick-maturing wines increasingly demanded by the market rather than the tougher wines traditionally made from Cabernet Sauvignon.

The limits to growth in the branded sector are more apparent than real. The obvious barrier is that most of the growers in the more high-profile sub-regions like St-Emilion and Pomerol whose wines – which are sometimes of no great quality – can sell on their brand name alone.

St-Emilion, however, has an excellent co-operative with its own brands. And of course estates which can call themselves crus bourgeois in the Medoc would never dream of allowing their wines to be used in brands – though they are sometimes tempted to associate themselves with serious merchants.

Moreover, those unable to use the description after the new – and belated – classification of crus bourgeois to be announced in June, may join their number. Of course there are exceptions. Mouton Cadet, for instance, offers a superb Pauillac, but then the firm has access to wines from three classed growths, including Mouton Rothschild, while Sichel has offered a wine from the Graves for over 30 years, since it opened its Bel Air.

But lesser producers who can call their wines by lesser names – Bordeaux, Bordeaux Supérieur, Entre deux Mers, Côtes de Bourg, Côtes de Blaye and so on – account for around four-fifths of Bordeaux’s production of 800 million bottles.

And even now only around 100 million, or under a fifth of the total are used in brands – and many of those are BOBs sold in quality-unconscious French hypermarkets at ludicrously low prices.  It helps that in 1993 the authorities imposed a limit to the number of names of "châteaux" under which wine can be sold.

Since then every estate can now use only one name, unless another secondary name has been in use for 10 years.  But the widespread use of third and fourth names was outlawed. Moreover, ambitious growers who have bought their neighbours’ often tiny vineyards cannot use their names unless they vinify the wine in separate premises, though the Bordelais remain very cynical as to whether this edict is strictly followed.

This ruling should at least prevent any further expansion of "châteaux" names.  As well as the need to keep improving quality there remains the crucial question of scale. As the table shows, none of the firms, or their brands, are of any great size, and none, except Mouton Cadet, are remotely "world brands".

And it has taken Mouton Cadet over 70 years to achieve its present sales of 15 million bottles. For inevitably there are limits. None of the brands are even medium-sized by world standards – Jacobs’ Creek alone sells 60 million bottles, nearly as many as the 75 million sold by Bordeaux’s 10 leading brands in 2002. Not surprisingly, most lack the substantial sales forces required.

As Bernard Magrez of William Pitters pointed out, his Malesan brand became France’s biggest seller only because it was sold through the substantial sales force responsible for the firm’s spirits and fortified wines. And Jean-Francois Mau sold his family firm to Freixenet to get access to its marketing department – which has already boosted sales considerably in the United States. But, as he points out, French wine brands are like the country’s football teams: "None are in the top division of European clubs."

It is distribution which will boost Barton & Guestier’s drive to recapture its old pole position in the United States where it stillN has 95% of its sales. Fortunately for B & G it has the marketing power of Diageo behind it. Which leads to the major question: is it going to be enough for a region to rely on a combination of its own brand name and those of a dozen middle-size firms with reputable names? Marketing orthodoxy would probably say no, that you need the clout of the Diageos of this world to flourish.

But most of the brands are not big enough to require such a force behind them, for they will inevitably have to rely on niche markets. Fortunately, as Allan Sichel points out, there is "plenty of room for niche brands" including his own Sirius, sold only to specialists and in the on-trade.

The same is true of another upmarket brand, Michel Lynch, where the Cazes are aiming at a maximum of 120,000 cases. It helps their sales efforts that Jean- Michel Cazes owns a two-starred restaurant-hotel (Cordeillan Bages) in Pauillac and the historic Chapon Fin restaurant in Bordeaux. Above that level, they say, there simply isn’t enough wine available of the right quality.

It looks as if there’s a glass ceiling for the brands, because after a certain point they’re going to bump their heads against the ambitions and bloody-minded individualism of the inevitably proud owners of petits châteaux. But there’s room for both in what remains the biggest single winemaking region in the world.

Nicholas Faith’s book The Winemasters of Bordeaux is published by Prion at £16.99.

MAJOR PLAYERS

Barton & Guestier

One of the oldest firms in Bordeaux, bought by Seagram from founding families in the 1960s, recently rescued by Diageo

Sales 2001: €43m, 17 million bottles, 95% exported (US accounts for 8m bottles)

Brands include: Barton & Guestier Prince Noir

Borie-Manoux

Traditional family firm

Sales 2001: €42m, of which 30% is own brands, 63% exported

Brands include: Beau Rivage, Cuvée Borie.

Exclusitivities include Châteaux Battailey (5th Growth) Haut Bages and Beau Site (crus bourgeois), Trotte Vieille (1er Cru classé St-Emilion) and Domaine de l’Eglise (Pomerol)

Calvet

Long- established firm enjoying a new lease of life under Jack Drounau, former chairman of Martell

Sales 2001: €42m, 18m bottles, 70% exported of which 7.5m is own brands, notably Calvet Reserve and Calvet XF

J-M Cazes Selection

Firm created recently by Jean-Michel Cazes, owner of Lynch-Bages

Sales 2001: 1.5m bottles, 80% exported

Brands include: Michel Lynch (including Michel Lynch Reserve launched in 2002)

Cordier Mestrezat et Domaines

Formerly owned by the Cordier family

Sales 2001: €88m of which 12% is own brands, 62% exported

Brands include:

Collection Privée (5m bottles), Club Cordier (4.1m) and Labottiere (1.35m). Properties owned include Châteaux Rayne-Vigneau (1st growth Sauternes), Meyney, Grand Puy-Ducasse (5th growth) and Lamothe-Bergeron plus exclusive rights over 26 other estates

CVBG Dourthe-Kressmann

Combines two family firms

Sales 2001: €111m, 35m bottles, 56% exported

Brands: include Numero 1, Beau Mayne, Kressmann

Monopole. Has exclusive rights over 70 estates including

Châteaux Belgrave (5th growth), La Garde (Pessac Leognan)

Tronquoy Lalande and Le Boscq (crus bourgeois)

Dulong

Family owned and operated firm

Sales 2001: €48m, 17.5m bottles of which 65% is own brands, 46% exported

Brands include: ORIGIN, Le Realis d’Alban and Marquise de Tours (Raymond Huet).

Owns new winery at Saint Savin de Blaye and has exclusive rights over 12 estates

Ginestet

Bought by the Merlaut family from the Ginestet family which had founded the firm in the late 19th century

Sales 2001: €86 million, 35m bottles of which 11m is own brands, 45% exported

Brands include: Ginestet. Properties include Châteaux

Gruaud-Larose (2nd growth), La Gurgue, Ferrière and Haut

Bages Libéral (5th growth), Chasse Spleen and Citran (crus bourgeois)

Yvon Mau

Founded in 1997. The Mau family recently sold control to Freixenet to obtain better international distribution

Sales 2001: €90m, 41m bottles, 51% exported

Brands include: Premius (920,000 bottles) and Cellier Yvecourt

Baron Philippe de Rothschild

Founded in 1830 by the late Baron to create Mouton Cadet, the most famous and important brand in Bordeaux

Sales 2001: €190m, (€90m from the brands), 26m bottles, 80% exported

Brands include: Mouton Cadet. Estates include Mouton

Rothschild (1st growth), Clerc Milon, d’Armailhac (both 5th

growths), Opus One (California) and Almaviva (Chile)

William Pitters

Founded 1964 with the purchase by Bernard Magrez of the Port brand of that name.  Expanded rapidly as agent for spirits and creator of the Malesan brand.  Now has seven estates outside France and brands from Italy, Spain, Portugal, California, Uruguay, Argentina and Morocco

Sales 2001: €200m, 30m bottles, 15% exported

Brands include: Malesan (11m bottles) and Beauvillon

Maison Sichel

Family firm run by five sons of the late Peter Allan Sichel

Sales 2001: €30m of which 17% is own brands, 75% exported

Brands include: Sirius (700,000 red, 150,000 white), Cave Bel

Air and Graves Pierre Coste. Joint owner of Château Palmer

(3rd growth) and owns Château d’Angludet (cru bourgeois)