Fine wine in focus: 2007 Rhône

A much lauded vintage, high Parker points but hampered by low liquidity the best wines of the Rhône sometimes struggle to capitalise on their many strong points.

The river Rhône from the top of the Hermitage hill

The Rhône 100* – a sub-index of the Liv-ex Fine Wine 1000 – rose 2% in May, the highest rise of all the indices. Yet it’s been up before only to slide just as quickly and of all the sub-indices on the Fine Wine 1000 it is the worst performing overall sub-index.

The region has the most Robert Parker 100-point wines of any region he covers, it has strong, well-known wine regions and brands yet it remains the poor relation of other French and international fine wine regions.

Taking the 2007 vintage as a case in point, what’s up with the Rhône?

Although the 2007 vintage in Bordeaux was something of a bust (despite the pleasure a good chunk of those wines are delivering right now) in the Rhône it ranks among the best of the last decade.

Robert Parker, an effusive fan of the region despite his much more closely publicised association with Bordeaux, showered the vintage with praise and lots of points.

In 2009 when he rated Clos des Papes’ Chateauneuf-du-Pape 99+, Parker said: “Paul Avril was a bigger-than-life vigneron, a visionary, and a great teacher, but Vincent has been in charge for a number of years, and he has rewarded his father with what I believe is the greatest Chateauneuf du Pape made since 1978 and 1990, the 2007.

“It is unquestionably one of the great Chateauneufs of my lifetime, and I suspect it will merit a three digit score after another three to four years of cellaring.”

Yet a look at data from Liv-ex shows that since release, the majority of the 2007 wines that feature on its Rhône 100 have declined in price since their release in 2008 or, occasionally, 2010. Clos des Papes’ “greatest ever” 2007 Chateauneuf for example has declined a (rather small admittedly) 1.8% since release.

This is despite the fact that all of them have 90-points or more from Robert Parker (although Rene Rostaing’s Côte Rôtie Landonne has an 88-91 spread).

The exceptions are the Chateauneufs from Janasse and Beaucastel, Jean-Louis Chave’s Hermitage and La Turque from Guigal (the latter seeing a rather meagre 0.1% rise to £1,800 per case the same level as Landonne and Mouline – which have both declined – compared to Janasse’s 65% rise from £1,000 to £1,650 per case).

The declines are perhaps to be expected slightly more in the north where it wasn’t quite as stellar a year, Jaboulet’s Hermitage La Chapelle only garnered 90 points from Parker and has declined 21.5% from a release price of £1,258 per case in 2010 to £990 today.

Similarly, Chapoutier’s Ermitage Pavillon which still has a 92-94 point spread, released at a little over £1,000 p/cs in 2008 has a market price of just £808 today – a decline of 25.6%.

As Wine Owner’s data shows, whereas the 2007s from the southern Rhône are out-performing their 2001s, in the northern Rhône the opposite is true.

Admittedly, the famous wines from the northern Rhône are produced in relatively small quantities – La Chapelle produces perhaps 96,000+ bottles or 8,000 cases in an average year – so, as Liv-ex director Justin Gibbs, told the drinks business “volatility increases” with the wine hopping on and off the market in small quantities. They’re often not liquid enough to sustain a thriving secondary market yet nor are they so rare that they’re impossible to find.

But this shouldn’t be the case in the south where vintages are more plentiful surely? The trouble with the south however is the proliferation of micro-cuvées – Domaine Pegau has seven Chateauneuf blends – which again fragments thee offering and means there’s no critical “mass” of any one wine. The exception to this is Château Rayas which produces relatively small quantities of Chateauneuf but just one cuvée.

If the Rhône were Burgundy then the small production micro-cuvées would be hot property but that’s not the way buyers – unless they’re real connoisseurs – see Chateauneuf.

Even if, as Fine & Rare’s Joss Fowler argues, one could reclassify Chateauneuf on more Burgundian lines because of the wide array of soil types, blends and winemaking styles, currently most buyers simply find it “confusing”.

Too much of a good thing?

The other problem with the Rhône is that, year after year, it produces great vintages that get showered with praise.

There’s a “surfeit of good to great Rhône,” says Goedhuis’ Tony Herbertson. “The first thing to bear in mind, with a couple of exceptions, is that they’ve had a superb run since 1998. The 2002 stands out as a bit of a failure and 08 not so strong in the North. Apart from that are all good to great vintages so market has been spoilt for choice.”

“I think quite a few collectors and drinkers will already have enough high-scoring Rhône in their cellars,” agrees Fowler and as Gibbs continues, with such an “abundance of riches” it “puts a lid” on activity with buyers able to pick and choose.

As it is, reports Berry Bros & Rudd’s head of fine wine, Max Lalondrelle, “Not many people are asking for it these days unless it has some significant bottle age; for example Guigal from the ‘90s or older.”

And as already mentioned, these wines may not be produced it huge quantities but “even single vineyard Guigal is pretty easy to find in the secondary market, have to go back quite a long way before scarcity comes into play,” says Herbertson.

Price is another issue to consider with the 2007s. Were they over-priced on release? “Absolutely,” thinks Lalondrelle.

Clos des Papes stands out here. As Gibbs points out it used to release at £200+ a case and even in 2005 was “hitting the market below £300.” Yet with the benediction of Parker it had a market price of close to £930 soon after release – although Nick Martin, founder of Wine Owners, asks whether the prices of some ‘07s were “artificially inflated by short term demand created by false markets” and “dodgy investment companies?”

Perhaps but, like Cheval Blanc and Yquem, which have struggled to hold their value in more recent vintages following a price “re-positioning” after the 2005 vintage, releasing high usually leads to wines struggling in the market.

As Gibbs continues: “It just started too high, at a price it had never been before. It takes a long time for the market to get used to a wine at an entirely different price point. If it gets there organically it’s easier, if it’s just placed there that’s not the case. If you suddenly try and re-position something on the back of one score it invariably doesn’t work.”

Herbertson adds that as the Rhône hasn’t quite attained the level of Bordeaux and Burgundy in buyers’ minds: “With some exceptions there’s a level buyers feel comfortable with but at £100 a bottle you can get good Bordeaux perhaps even Burgundy for that sort of money. At £1,000 a case there’s very serious wine available from other areas.”

Although, as noted above, Clos des Papes 2007 has not actually fallen too far in value and is still available for £913 p/cs. Look at vintages either side of it though and you get a feeling of how much of a leap upwards it took on release.

The 2005 (with 95-points) is available for £590 p/cs, the 2006 (98-points) is £550, the 2012 (96-points) is £540 and there are other high scoring wines at £300-£400 p/cs.

Other wines are in a similar position and if the greatness of the 2007s is not in doubt, their general inability to capitalise on that potential is perhaps almost due to not being able to stand out from what is already a very stellar field.

Are there any lessons there for Bordeaux? Admitting the occasional bad or lacklustre vintage to throw the better ones into starker relief? Bordeaux clearly operates differently to the Rhône on the secondary market but the more consistent vintages become, it’s possible the more blasé buyers will become.

*Rhône 100: Vieux Telegraphe, Chateauneuf-du-Pape (CNDP); Beaucastel, CNDP; Clos Papes, CNDP; Janasse, CNDP Vieilles Vignes; Pegau, CNDP Reservee; Chapoutier, Ermitage Pavillon; Jean-Louis Chave, Hermitage; Guigal, “La Las” (aggregated); Jaboulet, Hermitage La Chapelle and Rene Rostaing, Côte Rôtie Landonne.