Bordelais concerned about wine sales

With the recent recession looming, concerns are rising over whether Bordeaux wine sales will drop dramatically, resulting in poor end-of-year figures. According to Association France Presse (AFP), French wine merchants are fearful that the current financial uncertainty may lead to worse sales figures than those following the New York terror attacks in 2001. 

Bordeaux-based wine merchants are fearful that the predicted drop will be due to a coupling of both the economic collapse and the current US Presidential elections; and with Britain and America acting as Bordeaux’s leading wine exports, accounting for more than €431 million, it is doubtful that a slump in sales can be avoided.

Bordeaux-based wine merchant, Millesima, has experienced a 5% decrease in turnover compared to last year, while Château Brown, which suffered a 20% drop in sales following the New York terror attacks, is expecting the crisis to be longer and deeper than 9/11.

The response in Bordeaux has been to adjust sales and revenue targets by concentrating on emerging markets, such as Asia, in the hopes of gaining back sales lost from both the American and British markets.

However, not everyone is feeling the effects of the economic downturn.  Alun Griffiths, director of fine wine and spirits merchant Berry Brothers & Rudd, confirmed that turnover had actually risen by 10% compared to last year, with bottle sales reflecting the same increase.  With 90% of its sales in French wine, Berry’s has seen no drop in sales. 

But Griffiths expressed his concerns that the next quarter may prove to be “challenging”.  BBR is therefore “emphasising good value to customers over the coming months,” rather than concentrating on an alternative market to boost sales.  “Our strength is from the classic region, and it would be unwise to concentrate on a different route,” Griffiths explained. 

Although consumers in the Asian market are becoming more knowledgeable about wine, Griffiths thinks it will be more beneficial to “promote wines with good value”, than to focus solely on Asia.

Another cause for concern among French wine merchants is the impact poor weather is having on the current Bordeaux harvest. According to Viniflhor, the national agricultural body, this year’s French wine harvests are forecast to be smaller than those last year due to bad weather and low yields. 

“France didn’t have a good summer,” confessed Griffiths.  “The volume of production is not as good as that of 2005.” However, he admitted that it is still too early to predict the quality of the vintage, as BBR won’t start trade until mid-2009.

Thanks to the famous vintage of 2005 – dubbed the ‘vintage of the century’– driving a steep rise in prices, consumers may be put off purchasing Bordeaux wines.  But, with the value of stock and shares plummeting, Griffiths believes that investing in Bordeaux may prove to be a profitable investment as demand continues to grow and the wines offer good resale value.

Louise Robina Happé 10/10/08