2011: Allotted the tough act of following the record breaking 2009 and 2010 vintages – things did not go well.

SICHEL: BORDEAUX 2011 “MESSY AND BLOODY”

Charles Sichel, export director of Maison Sichel, has branded aspects of the 2011 en primeurs “messy, bloody and very difficult”.

Speaking to the drinks business, Sichel blamed bad strategy on the part of the châteaux and complete lack of interest from buyers – regardless of price – for the disappointing campaign.

He said that the uneven pace of the releases had caused “exasperation” in both Bordeaux and abroad, particularly the rush last week on what became known as either “Super” or “Black” Tuesday, which he dubbed “quite ridiculous”.

“Timing needs to be more even to give everyone a bit of breathing space,” he added, “and in a vintage like 2011 every château needs time for the merchants to present them to their clients.

“That’s why we released Angludet first. It gave us a 10 day head start and the merchants had all that time to sell our wine. Then Lafite came out but nothing happened and even (Robert) Parker’s scores came out and still nothing happened. Then they all came out at once.

“It was a big mistake on the part of the owners. It caused massive congestion, which meant that a lot of wine which could have been sold went by the wayside.”

This is a point of view echoed by merchants that db spoke to recently.

However, while the châteaux have clearly misjudged the market, Sichel also thought that in many ways it is of little consequence as it is becoming increasingly clear that almost no appetite for 2011 exists at all among buyers.

“After three good campaigns (2008, 2009 and 2010) it is clear that that level of activity is absolutely not sustainable,” he continued.

“Prices have come down by up to 50% in places and it still has not been enough to interest the market.

“I think whatever the prices the market simply wasn’t there.”

What this means for the future is clear to Sichel although he rejects the notion that en primeur is somehow finished.

“It’s just one of those campaigns. En primeur is not broken, it’s cyclical. It’s been here before, although the level of activity in this campaign is at a record low that’s for sure.

“Bordeaux knows what needs to be done to get things back on track. Prices will likely have to come down again next year, although this will be dependent on the state of the market and quality of the wine too of course.”

As the campaign limps towards the finish line, is this a message that will be taken on board?

Mouton Rothschild released this week at €360 p/b, the same price as fellow firsts Margaux and Haut-Brion. Merchants were very sceptical of Mouton finding any success in the market if it tried to emulate its peers and even with a 40% price drop, it remains £1,100 more expensive than its 2001 vintage and has “failed to spark interest” according to Liv-ex.

All eyes must now be on Latour.

MERCHANTS: 2011 CAMPAIGN ‘WORST IN RECENT MEMORY’

The Bordeaux 2011 campaign is the “worst in recent memory” thinks Berry Bros & Rudd’s fine wine buying director, Max Lalondrelle.

Speaking to the drinks business in the wake of Tuesday’s glut he and other merchants complained that too many wines are overpriced, the market isn’t interested and the whole campaign is a missed opportunity.

Price and value – or the lack of it – have come to dominate this campaign. Mark Bedini of Fine+Rare dubbed it: “The most dismal en primeur campaign in our 19 year history”.

He told db: “There has been a lot of concern over pricing. The intentions have been right but there’s no discount for the buyer. There needs to be an incentive to buy and they’ve missed providing a clear incentive”.

This was a point of view echoed by Gary Boom, founder of Bordeaux Index, who stated that the, “prices have not been keen enough to attract any strong interest”.

Timing has also played its part. Boom added: “Timing has not been great, it’s taken too long and then too much came out at once and everyone has lost interest.”

Corney & Barrow’s private sales associate director Will Hargrove, said that many, “savvy customers are looking back at comparable vintages and if prices are below 2011 then they buy those instead.”

After an incredibly early dash from the starting blocks from Lafite the campaign went very quiet and even once Parker’s scores were released nothing notable happened immediately.

Then on Tuesday 15 May, 43 wines came out practically on top of each other in what was dubbed “Super Tuesday”.

However, far from creating a “feeding frenzy”, said Hargrove, “it went a bit too far, a little bonkers”.

Lalondrelle candidly admitted that he has asked the négociants to remove him from their email lists and that “Super Tuesday” was yet another missed opportunity much like the campaign.

“Yesterday 43 wines released so there was a lot of missed turnover. We picked two and worked on them all day and so missed the opportunity to sell 41.

“I sent an email to the Bordeaux trade yesterday asking them to remove me from their mailing list. I had 2,500 emails in my inbox which is unmanageable.”

The word “apathetic” was used by all to describe buyers’ interest in the campaign.

Lalondrelle said that in 2009 BBR had made £115 million in sales, in 2010 a combination of price and quantity knocked it down to £65m and while a target of £30m was set for this year, “I’ll be happy if we make £15m,” he concluded.

2011 is clearly suffering from the years that preceded it. Boom said that 2009, while expensive, justified itself with “fantastic” wines, but “the 2010s were really not great (in price) and people were left nursing some losses and if it’s the same this year then en primeur has to be questioned.”

It seems as if critic Robert Parker’s prediction that the wines would “bomb” has come true.

The news was not all disaster, Hargrove said that: “Where people see value there has been some custom and if you’re looking at wines under £300 a case then a 20% drop is very fair”.

Meanwhile, Pontet Canet, Calon Ségur, Lafite, Margaux and Montrose were all picked out as selling well or being a good buy and Boom even said that Bordeaux Index had sold more Lafite and Margaux than it had last year, while Bedini also said that the first growths were selling well, though without the “razmatazz” of previous years.

Interestingly Boom refused to comment on Pontet Canet (praised by others), saying only that he had sold “20% of what we sold last year”.

The great tragedy is that, unanimously among the merchants, the vintage’s quality has been praised.

“Make no mistake these are beautiful, lovely wines,” said Boom, “but for whatever reason the US critics have not got behind it. We think the wines are much better than their Parker scores but we have to go on these scores with the customers”.

“Quality of the wines is not a problem,” agreed Lalondrelle. “There is a good market for classic vintages in the UK and this is a vintage we could have sold extremely well if the price was correct.”

What this means for next year’s en primeur campaign is interesting and thrown into sharper relief by Latour’s withdrawal next year.

Lalondrelle mooted that if next year’s campaign followed a similar course, “the whole system could be in jeopardy”.

READ MORE: A reappraisal of the 2011 vintage

2012: More charming wines overall than the 2011s but a small vintage and one that still didn’t quite hit the pricing sweet spot.

EN PRIMEUR: ‘IT’S NOT ROCKET SCIENCE’

With the 2012 campaign over, merchants have spoken to the drinks business about the campaign’s shortcomings and what it may mean for the future of the en primeur system.

As db has reported during the campaign (halfway through and at the finish yesterday), the chief and most obvious reason for the campaign’s poor performance was price.

What is more, with rather lacklustre scores the vintage was widely seen as one for drinkers rather than investors – but again, only if the price was right.

Liv-ex director, Justin Gibbs, explained: “It was not perceived to be a great investment vintage, only for drinking.

“Merchants needed to be able to pick up the phone and say, ‘I think you should buy because it’s delicious and good value. It’s not for investment it’s a drinker’.

“But they and the customer didn’t get the sense there was much value for money so it was easy for the consumer to make a collective decision and say ‘thanks but no thanks’.”

To give the châteaux their due, Gibbs did point out that in the pre-campaign survey, 86% of merchants polled had over-estimated what the prices would be.

They were in fact 17% cheaper than expected (the full results of the survey can be seen here) and Gibbs argued that the châteaux, “managed expectations rather well.”

The out and out winners from the campaign were, by common consent, the first growths and Right Bank estates such as Vieux Château Certan, Pavie-Macquin, Conseillante, Gazin and l’Eglise-Clinet.

On the other hand, as Liv-ex has noted, the second growths fared less well. Berry Bros & Rudd’s fine wine buying director Max Lallondrelle, thought that this was part of the problem of 2012 being a drinking rather than investing vintage: “Despite a good price to the négoce, the second growths haven’t done well generally,” he said.

“The wines were well-priced but consumers are still struggling at that price level. They’re second growths, not firsts and they’re long-term wines that need cellaring.”

And if they’re not going to appreciate during that time, why bother? On the other hand Gibbs noted that Pichon-Lalande and Montrose had made, “a real effort. To see seconds come out below fifth growths (Pontet Canet and Lynch Bages) is rare.”

Nonetheless, as he continued, the brutal truth was: “There were no buyers anyway. There are lots of reasons for this, macro-economics, people losing their jobs in the city etc.

“Really though 2011 was over-priced, 2010 too, and people have lost money. In the last six or seven vintages only 2008 really made any money.

“The problem is that prices have got ahead of the market. And market is saying enough.”

“Fundamentally this campaign failed because they didn’t get the price right.”

Then again, he added: “Perhaps there’s a feeling that if you’re going to fail, fail spectacularly.” A reference to the likes of Pavie and Angélus and an echo of the old advice that it’s better to leave university with either a 2:1 or a first or crash and burn as best you can taking the campus with you as you go.

“The sense is they didn’t want to sell their wine but I think that’s not true. It’s up to the châteaux to do their research. I don’t think there’s any grand plan, they just misjudged it,” he said.

At the heart of the matter though is the way the campaign is weighted towards the châteaux rather than the end-customer.

“It’s not the châteaux that determine the price it’s the market,” said Gibbs. “If the market doesn’t want it, it’ll sit in a chais until the market comes around.

“They have to sell it to the end user. It’s not sold until it’s off the lists of the merchants.”

Gary Boom, founder of Bordeaux Index, stated his belief that the rot set in around the 2009 campaign.

“I remember all those previous vintages where there was a reason to buy. It all went wrong around the 2009 campaign when they charged what they thought they could get away with.

“It should not be, ‘what we can get away with charging?’, but, ‘what will make the customer happy?’.

“They need to rekindle the love affair with the customer because they’re unloved at the moment and Bordeaux is running out of time on this.

“You can’t keep releasing wines that don’t sell. The only reason they don’t sell is price. Something’s got to give.”

“If you put yourself in a collector’s shoes, you have to wonder what is attractive these days in buying en primeur,” agreed Bruce Aston, director of Aston Lovell.

“Traditionally, the benefits of buying en primeur were clear. You got in at the lowest price that the wine was likely to ever be priced at and watched it grow in value.

“But if you can buy a decent physical vintage, a vintage of comparable quality to the en primeur, at a lower price than the new vintage, why bother?”

But what does this mean for the system? Is it in danger of collapse?

“No I don’t think so,” said Lallondrelle.

“We always complain about the system. It is in danger at the moment but these things are cyclical and eventually things will come back to normal and we will carry on.

“In the 70s, 80s and 90s it was difficult too. Boom and bust, I doubt system will disappear, but it is important for the system to be sustainable and that means a re-balancing of the margins across the system.”

Corney & Barrow’s associate director, Will Hargrove, called for “a bit more coherence” to the releases and considered how it might be possible to release according to commune or perhaps hierarchy but concluded that, “will it be markedly different in three to four years? No.”

And what of the great unknown, the 2013 vintage? With two poor campaigns under their belt, what will the Bordelais do when faced with either a “great” or rather more run-of-the-mill harvest?

“It’s almost a more interesting thing, scary too,” said Hargrove, “if 2013 is a five star vintage, how high would they go up again? Perhaps keeping price where they are now the same in a great vintage would be a better way to re-engage with the consumer.”

“I would say they’re going to have to be cheaper in 2013,” Gibbs thought. “2010 saw record prices, 2011 cut 30%  but didn’t sell, 2012 cut 20% and still didn’t sell.

“The more stock builds up in châteaux and négociants the more important subsequent campaigns are.”

He concluded: “You release based upon the market place, nothing to do with the previous year. They (the producers) will find a level but they need to do it quickly.

“They appreciate that it works well for them and that the négociants and merchants work hard for them but when it comes to the consumer they fail. They don’t understand that the consumer wants to make money too. ‘If the consumer is making money I should make more,’ they think. But it doesn’t work like that.

“It’s not rocket science.”

 

 

 

 

2013: A poor vintage that no one wanted. If merchants thought 2011 was a bad year it was only because 2013 hadn’t happened yet.

EN PRIMEUR: ANGER AND FRUSTRATION TO RESIGNATION

Resignation seemed to dominate the mood among merchants and other market commentators as the 2013 campaign was chalked down as yet another “missed opportunity”.

From the seeming anger directed towards châteaux during the 2011 campaign for failing to lower prices and bad release timing, to frustration when it happened again with the 2012s, this year was streaked with resignation.

Anthony Maxwell, co-director at Liv-ex told the drinks business that the campaign was almost in trouble right from the start. Db had asked back in December whether the campaign was heading into a perfect storm.

“Everyone was expecting it to be bad,” said Maxwell. “The wine quality was in doubt, there appeared to be no appetite for price cuts from châteaux, there was a general malaise in the market etc.

“And generally prices failed to change that sentiment.”

He said that the first 200 releases were just 4% down on the average 2012 prices and 30% up on the 2008s.

“They just didn’t come down enough,” explained Maxwell. “There was the opportunity to really get people back in it but it was just not enough.”

A “missed opportunity” was echoed by Joss Fowler of Fine & Rare, Max Lalondrelle of Berry Bros & Rudd, Gary Boom at Bordeaux Index and Will Hargrove of Corney & Barrow, who sounded most disappointed that the chance to re-engage buyers with Bordeaux had gone begging.

Boom said that the failed campaign will, “only add to negative image that is pervading people’s minds at the moment.”

Price was of course the main cause for the lack of interest. There is an understanding among the trade that good wines are expensive to produce and 2013 was difficult which added to the costs.

“There’s a limit to how far they can come down to, it costs money to produce these wines,” Fowler conceded before adding that one shouldn’t forget either, “that they’ve all got gold-plated cellars to pay for.”

It wasn’t all doom and gloom, some wines did sell well, the first growths, Lynch Bages, l’Eglise Clinet and some of the whites being the usual examples – even if volumes and buyer interest were lower than 2012.

“There was absolutely less interest,” said Fowler while Lalondrelle and Boom reported that it had been the worst campaign either had overseen.

Lalondrelle did say that one had to see things in perspective, the 2009 and 2010 campaigns involved wines with large volumes and bigger prices so merchants were able to turnover more impressive results in both volume and value than with the much smaller 2011s, 2012s and 2013s.

Furthermore, with quality an issue, merchants have been more selective, which further drives down the levels of volume and value its possible to reach.

Berry Bros only selected 30-50 wines this year. Lalondrelle said: “We tried to build our campaign with wines that are cheap in relation to previous vintages and are good wines to drink or will be good to drink.

“We have sold, overall, a third of what we did last year.  But the ‘11s, ‘12s and ‘13s aren’t brilliant vintages so we sold less of them.”

Hargrove said that even if everything Corney & Barrow had taken on had not gone through yet he was actually quite looking forward to some “old fashioned” selling on the phones with clients.

Overall the speed of the campaign seems to have pleased most the only dissenting voice being Lalondrelle who told the drinks business near the start of the campaign that he did not mind if the campaign was a little long.

Explaining that the window for selling a wine is relatively short before moving onto the next, he said: “There are plenty of wines we could have sold more of if there hadn’t been as much at a time.”

There are still a few big names to release; Pichon Lalande, Yquem, Le Pin and Ducru Beaucaillou the key names, they’ll probably release next week but they’ll have to do something spectacular if they’re to cause any excitement.

Even if Yquem was rated the best wine of the vintage, it’s price adjustment since 2005 has made it extremely bad at maintaining its release price on the secondary market.

There’s little expectation that Robert Parker’s scores when they come out in August will yield any great surprises though if he gives solid scores to certain wines that the merchants quite like then it offers another chance to push them a little.

“Parker will give the Bordeaux, UK and world trade the chance to promote the wines just once more,” thought Lalondrelle. “Even if we sell only another 100 cases on the back of it.”

2014: A good vintage but one which, yet again, left few feeling satisfied afterwards. Did anyone really want or need en primeur anymore?

BORDEAUX 2014: WHAT NEXT FOR EN PRIMEUR?

The 2014 campaign has been neither a roaring success nor an unmitigated disaster but some merchants are now questioning their approach to future campaigns with one major merchant announcing a review.

The 2011 campaign was famously “messy, bloody and very difficult”, the 2012 was an “uphill struggle” and last year was a “disaster”.

With recent precedent setting the bar so low, success (however relative) was practically guaranteed and the wines were good too.

“I really love the wines,” declared Bordeaux Index’s Gary Boom, who added they, “reminded me of the ‘85s.”

Despite the hope that good wines and a good exchange rate would bring buyers – and perhaps even the Americans – back into the market for Bordeaux futures, there were also fears a great opportunity to reengage with consumers and do a lot of business would go begging.

As can be seen from the lead image, “price” was, once again, foremost in everyone’s minds before, during and now after the campaign. Max Lalondrelle of Berry Bros & Rudd warned in early April the campaign would flop if prices rose and the merchants penned an open letter to the Bordelais calling for prices to sink back to 2008 levels although it is unlikely any seriously thought this would happen.

Speaking to buyers and directors from Corney & Barrow, BBR, Fine & Rare, Farr Vintners, Bordeaux Index and Liv-ex, the overall impression with regards the progress of the campaign was mixed – optimism if not exactly crushed then certainly brought a little low.

According to Fine & Rare’s Joss Fowler, “over the course of the campaign we have seen glimpses of what it’s like in a big one. A price comes out, you weigh it up against quality, you get excited, you go out and sell it.”

Hargrove agreed somewhat and argued: “In some ways it’s positive, buyers this year are buying purely to drink.”

He also said that pace of releases had been good – the campaign began on 13 April with Doisy-Daene and finished (in effect) with Montrose on 2 June and despite sometimes feeling long-winded the 2010 campaign, it should be remembered, lasted four months.

With prices coming out after the scores from Neal Martin and with the overall lack of speculators he thought the campaign had “all been a bit more real.”

But, he added, it still, “could have been better. En primeur relies on momentum and excitement and while some wines have worked it still hasn’t had momentum and excitement to the degree it could’ve done.”

Very little has sold in any great quantity. Those merchants the drinks business spoke to usually said that wines with good prices worked, while “those that didn’t work, didn’t work at all,” according to Fowler, who said the campaign had been a, “bit stop-start.”

Wines that “worked” included the first growths, Rauzan-Ségla, Canon, Lynch Bages, Pichon Comtesse and Duhart Milon, and where they worked they worked well. Lalondrelle pointed to the 600 cases of Angludet BBR sold, while Georgina Crawley, associate director of business development at Goedhuis, told db they’d sold around 100 cases each of wines like Lynch Bages, Canon and Ducru-Beaucaillou.

Meanwhile the wines that didn’t “work” – need few introductions here.

“Clearly the public were not about to be enticed back into the market,” said Boom, while Lalondrelle said that en primeur has “failed to retain the attention of the consumers,” because it’s not being priced for them anymore and they are aware of this.

“Some price at a level which doesn’t work,” agreed Fowler, “I propose they aren’t interested in selling en primeur. I applaud châteaux that price their wine so it sells to the consumer because consuming is what wine is all about.”

Lalondrelle said before the campaign any wine released at a price not deemed reasonable would either not be offered or would be offered with the caveat that cheaper or similarly priced vintages were available. Pontet Canet and Montrose were among the wines to receive this treatment.

Nonetheless, Crawley stressed the need for merchants to be “positive” and get continue to get behind wines that made an effort to price sensibly and were well-made

“Speculation’s been taken out of the market and it’s about pure love of these wines. Consumers still want these wines in their cellar,” she said.

The US question

At the end of last year db asked if the rapidly decreasing value of the euro versus the dollar (and the pound) would help bring US buyers back to the futures market in greater numbers.

In theory it was entirely possible although US merchants warned that buyers there wouldn’t be out to buy at any price, particularly as they had grown accustomed to feasting on cut price wines from 2009 and 2010 which they passed on buying en primeur in the first place.

After speaking to some of its US members, Anthony Maxwell, co-director at Liv-ex, told db the campaign had been “satisfactory” and broadly similar in character to the UK.

Demand centered on a dozen or so brands such as Lynch Bages, Mouton Rothschild and Cantemerle but it was certainly a “hand sell” type of campaign.

“The currency helped,” thought Maxwell, “if the differential was what it was a year ago it would have fallen on deaf ears.”

“It played a small part, no question,” Sean Bishop, CEO of JJ Buckley in California, told db but he argued that his customers knew this was a “better than average vintage” and “at the end of the day, the American consumer wanted to buy wines of quality and they haven’t been able to do that for a few years.”

The exchange rate helped but, “[they] would’ve bought regardless. Wouldn’t have gone wild but they wanted to buy.”

Either way, the US does not seem to have got involved in this campaign to the extent it could have done.

Counting the cost

Overall Lalondrelle thought BBR had turned over 30% more than last year in value but may be as far as 40% behind even the 2012 campaign. Boom said he doubted BI had made more than £3.5 million this campaign.

What’s more, Lalondrelle said: “There’s no denying the extra percentage is to do with the quality of the vintage but also the exchange rate. If the sterling wasn’t as strong I doubt we would have made more than 2013 in terms of sales.”

Fowler warned, however, that a “rose-tinted” view of past campaigns may be distorting some views of this one.

He said: “En primeur campaigns in anything other than the great vintages are always a little bit like this and this has been one of the better ones. The 2011, 2012 and 2013 campaigns were all pretty dull. 2006 to 2008 were all pretty dull as well. People get all rose-tinted about 08 but no one wanted to buy them until Parker came out with his scores. The 2004 [campaign] was no fun at all at the time.”

Nonetheless, there’s no denying that recent campaigns would have worked vastly better if prices weren’t so high.

“The general reaction from the UK buying public is complete apathy towards en primeur in general at the moment because there’s no incentive to buy wines en primeur if they’re going to be available in three years’ time for the same price or less,” stressed Farr Vintners’ Tom Hudson. “There’s no future for an en primeur market with these kind of prices.

“The en primeur campaign takes up weeks, sometimes months of everyone’s time, I’m sure merchants will want to devote less and less time to this whole thing.”

Cracks?

All anyone wanted as spring neared was a big, fat, juicy campaign. That didn’t happen and while previous and current commentary has focused on the strain these unsold wines are putting on the négociants, it is increasingly clear merchants are fed-up with the state of affairs as well and it looks likely that some merchants at least will be re-evaluating the resources they assign to en primeur campaigns in future.

Boom said that for all the effort his team put in to the campaign, it was becoming increasingly expensive to only sell a “paltry” amount of wine by the end of the campaign.

He added that if “nothing interesting” had come out by 10 am “we refocused on Burgundy or Champagne. Next year there will be less interest from the merchants. It takes 10 guys out of the room every year and if they’re armed with knowledge no one wants to know about, it’s not worth my time. If every month was en primeur month, I’d go out of business.”

Lalondrelle told db that BBR has 40 people “involved in marketing, sales and logistics of en primeur and when there are wines at the wrong price then we have a whole day of not making any money.”

He continued: “There is an argument we buy the wines we believe are good value and then offer them as a one off in July. We are the biggest en primeur player in the UK and if it doesn’t work for us I doubt it will work for others.”

It has often been pointed out that en primeur has had its wobbles down the decades but it’s hard to escape the feeling that the system really is dying by slow decrees.

Rage against the dying of the light, declares Crawley who, while acknowledging the need for margins maintains there’s still, “a decent amount of business to be done. This is where the market needs to go back to its roots…[and] merchants promote wines they believe in. We have to be seen to be making a stand for certain wines.”

Pour encourager les autres?

2015: Vintage quality soared again but it was now clear that prices as they were, were here to stay.

BORDEAUX 2015: THE NEW NORMAL?

With the dust settled on this year’s primeurs it is clear that much has changed in the way these campaigns are now approached and that their overall importance, especially to the châteaux, has been greatly diminished.

Opinion is somewhat divided on the overall ‘success’ of the campaign with merchants often saying they have improved on their 2014 vintage results but not always to the hoped for degree. Corney & Barrow’s Will Hargrove told the drinks business that while he and his team had been “pleasantly surprised” with the way the 2014s had sold, the final tally for the 2015s would probably be “a little disappointing”.

It was certainly a campaign that marched to the beat of its own drum and that drumbeat appeared, at times, to be rather haphazard.

If volume and value turnover was satisfactory, some prices were still too high and if there was a high level of consumer engagement, eagerness quickly dropped off in the second half of the campaign as prices climbed and sterling failed to strengthen against the euro in the run-up to the recent referendum.

Berry Bros & Rudd has made an estimated £15 million this campaign, more than the £12m realised last year but the still only the same as it made with the 2011s – the “worst campaign in living memory” as it was declared at the time.

Finally, for all the success of Canon, Rauzan-Ségla, Figeac and Margaux, which all merchants have said sold extremely well; many thousands of bottles of first growths were left unsold.

 

Turnover

Although it dragged at times with long periods of waiting, the overall run time was just shy of two months which is actually shorter than the 2009 and 2010 campaigns which went on for three and four months respectively.

As in the 2011 campaign there were a couple of days when merchants felt somewhat overwhelmed by the number of releases. On 19 May, the day after Pontet-Canet was released, at least five big names including Climens and Léoville Barton came out but there was an even bigger deluge on 1 June when 20 châteaux including Calon Ségur, Smith Haut-Lafitte, Grand Puy Lacoste and Léoville Poyferré emerged.

The most frustrating aspect of this sort of rush is that merchants are unable to focus on selling all of the wines released which leaves many labels put aside in favour of those they feel are more commercially viable at that moment.

That said, it would appear that some merchants have managed to sell good amounts of stock, particularly from Margaux, Pessac and certain wines on the Right Bank – especially Canon and Figeac.

BI’s marketing director, Giles Cooper, reported that clients were “really engaging” with certain wines and volumes were good even if it, “wasn’t like 2009…there weren’t hundreds and hundreds of cases for £250 being sold.”

BI’s clients apparently “went nuts” for Le Gay – a wine released on the same day as Lynch and largely overlooked at first, while BBR sold 7,000 bottles of Grand-Puy-Lacoste and another 7,000 of Giscours.

FINE+RARE’s co-founder, Bud Cuchet, likewise said that volumes were in fact greater than they were for the 2010 campaign – a vintage whose excellence perhaps blinds us to the fact that its primeurs were not terribly, terribly successful in all areas.

Tom Hudson, director of Farr Vintners was less impressed however, saying that while the 2015 campaign had certainly surpassed the 2011-2014 efforts, “it’s a fraction of what we did in ’05, ’09 and ’10.”

Prices were of course high and merchants that didn’t have huge turnover will still have recorded decent sales figures as a result – although even marginal dips in price would no doubt have boosted sales in all areas.

Hargrove said he was still busy “digesting the numbers” but guessed the merchant would be up in value terms versus the 2014s because of the wines being more expensive yet, on the other hand, in, “bottle for bottle terms there won’t be much difference.”

As mentioned above, BBR’s fine wine director, Max Lalondrelle, thinks the business will have done £15m worth of sales (it has processed around 20,000 orders at an average of £698 apiece) but this is shy of the £20m it was hoping for with the £5m deficit largely attributable to the increasing prices of wines in June and corresponding drop off in consumer interest.

As a case in point he singled out La Mission Haut-Brion, which released at €300 a bottle ex-négociant, a 106% increase on the opening price of its 2014. “Last year we sold 3,000 bottles,” said Lalondrelle. “This year just 1,000 that’s £500,000 we haven’t made and if you multiply across other brands it adds up very quickly.”

 

Prices

Liv-ex recently reported that just over 98% of its 440 members underestimated price rises this campaign. Merchants had hoped for an 18% rise on average but, in the end, prices shot up over 45% above the 2014s.

It’s not that the 2015s didn’t ‘deserve’ to be more expensive than the 2014s as, in many instances, they are clearly superior wines but many more would certainly have found a greater audience if they were “less aggressively priced”. For Goedhuis’ David Roberts MW, “the great losses have been some of the ‘super seconds’ who made outstanding wines, but sadly just pushed prices too far and customers have voted with their pockets and stepped back in this category. This is a great shame as the quality of the vintage was there for this to be a top campaign for châteaux, merchants and clients alike.”

Yet, as Cuchet continued, high prices did not put buyers off as might previously have been the case. He noted there was seemingly, “no rhyme or reason” to this campaign where buyers rushed to scoop up Canon which was 55% more expensive this year than last, or Margaux which was 60% above its 2014 release price – increases that wouldn’t have been tolerated in recent campaigns past but were somewhat justified on the basis of their rapturous reviews and the fact that at €60 a bottle ex-négociant it was vastly cheaper than some of the other later Right Bank releases.

And it was buyers’ willingness to jump in on certain wines that created a positive vibe in some quarters. “I have to say we have not had as much fun in years as we had in this campaign,” said Cooper. “We really enjoyed it. We loved the wines and were able to talk to our customers about them and they were not overly perturbed by the prices because many of the wines are going to be in the canon of the ‘greats’.”

Lalondrelle commented that it was fun to begin with but got considerably tougher later on. He said: “There was definitely hunger from consumers and that was demonstrated at all levels to begin with. It was a hunger we haven’t seen for quite some time but as we approached the referendum, people were put off.”

Even without the referendum of course buyers could simply be turned off by the prices on offer.

“People were enthusiastic about the wine but they were frequently disappointed by the price levels,” said Hudson who continued that caution around buying en primeur still exists in many quarters for the on-going reason that: “They see time and again that there’s no point buying early if it appears later cheaper.”

The only counter to that would be that the recent fall of the pound against the euro means those who did buy en primeur got in at the right moment and those still waiting for the right moment to jump in may be kept waiting for some time.

 

The new normal

So, despite the occasional hiccup, large price increases were not always enough to put buyers off, especially when they were convinced and enthused by the reports on the quality of certain wines.

This in turn goes to show that en primeur is not ‘dead’ as is occasionally suggested. Buyers are willing to spend money on futures and spend big if necessary. Again, as Cuchet points out, en primeur is the one time of the year when most buyers lay down money on claret.

Yet there is no denying though that the whole system has changed and it’s change has taken place over the last few years. It is now a more limited, more focused exercise; one that only really suits a handful of estates. Châteaux are holding back increasingly large amounts of stock and merchants are being pickier in what they pick up.

En primeur is still a great shop window for Bordeaux and is not going anywhere soon but it seems likely that this year’s campaign, while not a ‘missed opportunity’, is likely the beginning of the ‘new normal’.

And what is this “new normal”? As Hargrove explains it’s a “positioning exercise” for the estates. He said: “I think en primeur for châteaux and négoce is far less important to their business than it used to be. En primeur is still important but it’s become a positioning exercise.”

Continuing in this vein, when writing for the drinks business recently, Hugo Rose MW looked at the changing face of en primeur and asked: “Is it just for show?”

If it is then the châteaux have potentially set off down a very dangerous path. Already many are saying that this new policy of stock retention is simply “market manipulation” designed to justify high release prices.

The idea must be, of course, to release at a later date for profit and, said Cooper, if they released at a “tolerable” price then it’s a system that “could work”.

Judging by the pricing antics of many estates in recent years though it seems doubtful many will be expecting too much, especially as it is almost certainly Asian customers who will be the target of these ‘ready-to-drink’ ex-cellar releases. Asian participation in this year’s campaign was once again pitiful yet still the obsession with their buying power exists, even if European and US buyers have shown they’re willing to play ball with these wines at their new prices (and make no mistake, these are the new prices) en primeur.

It’s risky too because there’s just no knowing what the market may look like in future. As Cuchet points out: “We don’t know what will happen in the future, there are many factors we can’t control regarding what the future price will be or the availability.”

“Is a campaign in the old sense justified?” asked Hudson. “Everyone puts time and expense into going to Bordeaux for the tasting and then three months waiting and selling the wines but if they’re only going to sell a tiny percentage it doesn’t make sense for people to invest in the process.”

The châteaux would appear to have decided how they want en primeur to look in the future it merely remains to be seen now how utopian or dystopian this vision turns out to be.

2016: A campaign that worked in fits and starts but was marred by rising prices and greater retention of stock by many châteaux.

EN PRIMEUR 2016 VERDICT: OUT WITH A POP

It was an intriguing and often frustrating campaign on the whole but one might argue there were a number of positives to be taken away.

After a cautiously optimistic start where some big names such as Cos d’Estournel and Montrose chose not to raise their prices on last year (although Montrose then released a pitiful amount of stock), true to form prices then began to rise as the campaign went on.

This matter was compounded by the weak exchange rate between the pound and the euro which meant that the higher the price increase out of Bordeaux, the more expensive the 2016 wine looked in relation to the 2015 vintage that had been released last year.

It’s worth pointing out that while prices did rise as the campaign went on (being 16% up on average versus the 2015s by the end), very few big name wines this year increased their prices by more than 20%, still fewer by more than 25%.

This is in contrast to the 2015 campaign where, as Liv-ex points out, “increases of 40-50% by the middle of June were normal”. Vieux Château Certan’s release of 28% was quite high for this campaign but last year it would have been distinctly average.

The problem was that as prices had been pumped up so much with the 2015s even smaller increases this time around were enough to push many wines into ever-higher price brackets.

The campaign was long and never seemed to truly catch fire. Rises in energy generated by the release of Montrose and Lafite quickly subsided as it became clear there was very little stock, while the increased prices meant buyers hung back rather than jumping in with both feet.

In this sense it was a bit of a “wait and see campaign,” as Corney & Barrow’s Paul Marus told db some weeks ago, customers often weighing up releases against one another rather than making snap decisions.

This campaign, with the quality of its wines, should have gone off like the Guns of Navarone or Superfly TNT; the final effect was more like that of a pop gun.

Stocks

Stock levels or the lack of them was a major feature of the campaign that was a major topic of conversation and debate. It has been estimated that the amount of wine released this year was around 20% below what was offered last year, which caused a few angry moments for all concerned.

As Liv-ex director Justin Gibbs told the drinks business: “This shortfall was of no relevance for the wines that were too expensive, however it was irritating for those looking for well-priced wines.”

And there were well-priced wines that sold strongly – Mouton Rothschild being a case in point – but what was frustrating was that allocations were sometimes so small (Montrose), that stocks were burned through before demand was fully satisfied. It’s been mentioned here before but it’s worth mentioning again; the trade is losing out on tens, hundreds of thousands even millions of pounds/euros/dollars because of missed opportunities involving poor

pricing and dubious decisions on stock levels.

Merchants have generally reported they were able to get enough wine to “satisfy demand” of course – perhaps from wines freed up from the still disinterested Asian market? COFCO recently told our sister magazine dbHK it had cut its en primeur purchases by some 50% this year.

The news from other merchants in Hong Kong from this campaign has also been rather subdued. Memories of the 2009 and 2010 bonanzas which then turned to dust in their portfolios are still raw in the east.

“We love the wines, but we’ve learned our lesson from the 2010 vintage. We are cautious. We are not buying some wines en primeur because they don’t make financial sense,” commented Eric Desgouttes, general manager of Kerry Wines, a leading wine merchant in Hong Kong and one of the city’s biggest en primeur buyers.

Liv-ex reports that sales in Hong Kong increased between 15%-20% in value (largely due to the price increases) but volumes remained flat.

If anything, this campaign should put to bed, once and for all, the notion that there is any immediate future for en primeur in Asia. It is not the promised land where wine will sell at any price.

The US has still not rebounded fully either, like HK volumes remained flat on last year while price increases inflated value sales. It is the UK that is buying Bordeaux en primeur and has always been the most faithful market for these wines through thick and thin.

And that’s where there is something of a bright spot for en primeur. The wines are clearly excellent and merchants have really got behind labels they felt could work.

As they predicted, levels of consumer engagement were high. People wanted these wines, which was why allocations were sold through and customers were even going for wines that many judged too expensive – such as Palmer or Pavie, although as Liv-ex said, there are many wines that did not sell well at all which must now sit in the system like so many others.

“We were a little surprised by how well prices were received. Prices were high, but collectors still thought the wines were worth buying,” commented Justerini & Brooks’ Bordeaux buyer, Tom Jenkins.

After several rather fallow years since the 2010s were released Bordeaux has come good. Jenkins said it has been the “biggest campaign since the 2010s” and about 40% up in value on the 2015s.

The 2016s have not, therefore, entirely rekindled or recaptured that fever that marked the 2009 campaign but it would be wrong to say it was a disaster and just as important to point out that en primeur isn’t dead – yet.

As Berry Bros & Rudd’s Bordeaux buying director, Max Lalondrelle, states: “En primeur is fundamental to the survival of Bordeaux and therefore will always be part of its DNA. The Bordelais will always find a way to make it work. Let’s not forget that it is the highest concentration of volume fine wines in the world. With increased demand from around the world and low availability from other wines regions Bordeaux will always remain the number one source for volumes of fine wines for most collectors and merchants. It isn’t always easy to deal with Bordeaux but in many ways, this is why we like it and why we spend so much time talking about it!”

What needs to change?

There’s now a well-established argument that en primeur is out-dated and needs to be radically overhauled.

As Lalondrelle’s comment above makes clear, and it is broadly the consensus of many other major merchants, when en primeur works it really works.

“We still believe in en primeur and we believe that when you work closely with the châteaux and négociants there is a lot of very smart business to be done,” says BI’s Giles Cooper.

“There’s no doubt that plenty of client excitement still exists, especially in a good vintage. Are some clients tired of it? Do some not see the point? Certainly. But there are plenty of other offers to show them to keep them happy; in fact we would have almost hit our sales target for June without any primeur sales at all, such is the scale of trade in physical stock.”

There are a number of things that could certainly do with a change however that could give the whole operation a shot in the arm:

End tranches:

Again, in a good campaign where things are really motoring and customers are clamouring for the wines, tranches can work. There’s something about tranches though which is inherently dishonest and almost a little distasteful, charging latecomers to the party more because they missed the initial rush.

Not that it mattered much this year as the two most high-profile châteaux that tried it didn’t do a very good job. Montrose had a much talked-about release early on in the campaign and tried to bottle lightning twice as it wound down but nobody was interested by that point and the worst practitioner was Lafite which did a woeful job.

The initial price would undoubtedly have worked but so little was released (50% less than last year) that négociants held onto it to await the second tranche and then average out the price. The news that Lafite was out raised much interest which then fizzled out as the offers were withheld in Bordeaux for a month. When the second tranche came out there were buyers sure but the campaign had lost all momentum by that stage and there was more apathy than anything else.

“I would like to see the back of tranches,” says Corney & Barrow’s Will Hargrove. “It is inefficient and makes little or no sense to the end customer and they after all are (or should be) the focus.”

Lafite faffed around with tranches and it didn’t work, Mouton released everything it was going to at once (still a smaller amount that last year admittedly) and it was one of the most sought-after and successful wines of the campaign.

End pricing opacity:

A point already raised in the main text above in conjunction with stock levels, Liv-ex has spoken a lot in recent months on the need for better pricing models and an end to opacity which will stop the trade and consumers haemorrhaging money. In the conclusion to its own 2016 report it noted: “En primeur continues to be hindered by an opaque system of price discovery that leads to a broad spectrum of mispricing. Price information in the secondary market can be harnessed to produce logical, fair prices that could help to restore confidence in en primeur.”

A more focused campaign:

Riffing on a recent political slogan in the UK, this campaign has been characterised by some as, “for the few, not the many.”

There’s no doubt that the scope of en primeur is shrinking. The bigger châteaux are holding back more stock and margins are increasingly squeezed. For merchants to invest so much time and effort into two months a year and to get what can be fairly paltry returns is clearly a nonsense. Already many are being much more ruthless in their selection of wines to maximise their returns.

Perhaps ‘en primeur’ in its traditional format should zero in on those top wines of the Left and Right Banks only and become the stated time for to get their hands on a case or two of first growths and grand cru classé ‘A’.

It’s tough on the smaller châteaux but perhaps they can still be sold as futures at a later date. They may even benefit from not having to compete with the big labels if they released later in the year. Ditto Sauternes.

Simon Larkin MW, managing director of Atlas Fine Wines, said: “Year in and year out purchases of specific wines, almost irrespective of quality and price, just don’t happen much today. I think that en primeur is becoming focused on fewer and fewer wines. Then the négociant has the problem of trying to sell wines that merchants aren’t interested in. We have had our fair share of requests for ‘assistance’ with certain tricky stocks or offers of desirable stock tagged to stock that is more difficult to sell.

“For us en primeur has always been small. We aren’t building our business on the volatile nature of Bordeaux en primeur. Sideshow? Smaller in scale? Yes, I can’t see how it becomes reinvigorated with the leading châteaux not needing to sell at this point in time nor needing to release at levels that offer value against past vintages to the end consumer.”

2017: A small vintage, good in places but the chance to get buyers engaged was lost with prices down to 2015 levels for 2014 (or lower) quality stock.

EN PRIMEUR 2017: ‘HAVE WE LEARNED NOTHING?’

Another missed opportunity, too many overpriced wines gone begging, an utter lack of customer interest, plummeting sales, frustrated merchants and the worst campaign since 2013 – the 2017 primeurs will be swiftly forgotten but their legacy may be longer lasting.

Speaking to UK merchants it is clear the sentiment is one of frustration and disappointment; many believed there were excellent wines from the vintage that could be sold at the right price but as too many châteaux offered mere token discounts to their (hugely expensive) 2016s, sales by both volume and value have crashed – at times dangerously close to 2013 levels.

Over at the UK’s largest en primeur player, Berry Bros & Rudd, fine wine buying director Max Lalondrelle reports that sales will be around £13-£14 million, half of what was achieved last year and while that’s not necessarily a sum to be sniffed at, volumes were much, much lower (“near 2013[levels]”) and “12 brands made up 80% of the turnover,” he noted.

Farr Vintners’ managing director, Stephen Browett, said that apart from the 2013 it’s been “the worst en primeur campaign by volume since 1992,” and while it won’t be the worst by value the final haul will still only be £2-£2.5m.

Other merchants are not always quite so open with their figures but tell a similar story. Tom Stopford-Sackville at Goedhuis said volumes would be down around 60% on last year and turnover, “shy of 70%”.

No merchant db has spoken to expects to have sold anything like the volumes they did for the 2014, 2015 and 2016 vintages and if the eventual tally from the 2017s looks healthy enough, this will largely be due to the cost of the wines in the first place and belies the extremely limited scope of the campaign and the fact that merchants have routinely sacrificed long-husbanded allocations of certain wines because they could not justify the price to their clients.

It’s worth remembering that the very first wines in this campaign – Sauternes for the most part – began appearing in early April and Château Palmer was a surprise early release on 24 April, before most of the scores had even been handed in by the big critics.

The pace of releases throughout May was sporadic; staccato bursts through a month of long weekends and with a Vinexpo Hong Kong at the end of it.

In early June however there was no stopping the rush, with near daily releases tumbling from La Place de Bordeaux like marbles falling out of a bag.

Although the pace was a little frenetic, to the châteaux’s credit there was never a day that tipped into the farcical ‘Super Tuesday’-esque tsunami of releases that was seen with the 2011s and, to an extent, the 2015s and 2016s too.

Having begun in earnest on 5 June, proceedings were wrapped up by the 21^st with the release of Ausone.

So the tempo for the big names was brisk and there was no “silliness” with tranches noted Corney & Barrow’s fine wine director Will Hargrove.

Unfortunately, by the time June came around a succession of poorly judged releases and the stop-start nature of the campaign had sucked a lot of the life out of the proceedings.

In short, the 2017s are going to pass into the primeur history books as another damp squib, a frustrating come down after three campaigns that had done much to restore some faith in the system and demonstrating a complete lack of lessons learned.

 

Pythons and sticky wickets

As mentioned by db before the campaign, 2017 had all the hallmarks of a ‘conundrum vintage’.

Following in the footsteps of the 2015s and 2016s, the wines were generally much better than many had supposed following the dramatic frost reports but were clearly not as excellent as the 2016 wines and thus would need to look very compelling indeed for merchants to entice their Bordeaux-buying customers – who were doing the equivalent of a Burmese python digesting a particularly large gazelle after last year’s campaign– to have a nibble at the 2017s.

The question of price is the infernal/eternal question around en primeur and Bordeaux but it is the central issue on which campaigns stand or fall. There are perhaps too many competing self-interests to make anything like a universal consensus on what pricing ‘should’ be but strictly in terms of looking at the market for wines already available (physically or otherwise) then the advice and hope was for cuts that would bring the wines back in line with the way the 2014s were priced.

In the event, prices only dropped to around the level of the 2015s (and above in some instances) and buyers quickly switched off. According to Wine Lister, the average release price of the 2017s was 6% below the current market price of the 2015s and 20% above the 2014s.

And as the 2017s emerged so it threw into starker and starker relief the relative value offered by vintages such as the 2014s which very often have the same or better scores than their 2017 counterparts.

All the market was confronted with, says Browett, were wines with, “scores like 2014, prices like 2015”.

Giles Cooper, marketing director at BI, said: “You’re always going to be batting on a sticky wicket after the ‘15s and ‘16s. We’re playing to an audience that’s  already satiated with young wine and that reason [to buy] just wasn’t given. The market was looking to that second tier of vintage quality pricing and for that level the wines were just too expensive.”

For some this is merely a further indication that there are certain château owners who are still either utterly unaware of market sentiment or simply don’t care or are dancing to the tune of shareholders who, similarly, either don’t know or care.

Justerini & Brooks’s Bordeaux buyer, Tom Jenkins, said it was clear there was a “complete disconnect” between where Bordeaux wanted to pitch the wines and where consumers had decided they should be pitched.

“Most customers think this is a 14- vintage and should be below the ‘14s and the châteaux have priced them in some cases above ‘15 which is madness in my opinion,” he said.

“At times it was a car crash campaign. You saw the price and knew it would never work, which is a shame.

“Grand-Puy-Lacoste for example – lovely wine but never going to work [at that price]. There’s a stubborn refusal from the châteaux to realise what the public are willing to accept.

“You can see thought and logic in some releases and from some there’s been no thought at all, just a token discount.”

“Prices have gone up so much since 2014, a token price drop is nonsense,” said Browett who has been notably bullish on the issue.

“They know they’ve overpriced the wine but are either so aloof they don’t follow the realities of the wine market – or they don’t care.

“It’s such a wasted opportunity because the quality is quite good but it should have been sold around the ‘14 price level.

“Everyone knows what the price should have been and they just haven’t done it.”

 

Painful losses

A very few wines ‘worked’ this campaign, some completely, some to at least gradual degrees.

Beychevelle, Canon and Calon-Ségur are three names that crop up consistently in the win column.

Lynch Bages, Léoville Barton, Rauzan-Ségla, Carmes de Haut-Brion, Lafleur and Pichon Comtesse get the nod too for getting the price right, Vieux Château Certan, l’Eglise Client and Figeac have also been mentioned although the latter will have sold out more because stocks were so small rather than the price making it look super compelling.

Among the first growths it seems Mouton Rothschild, Margaux and Lafite were the biggest successes.

“Mouton has worked, but we’re yet to sell a third of our allocation. The price was 15% too expensive but it will work over time. Margaux has worked, we sold out in 24 hours and Lafite has worked and we still have demand and are still acquiring stock,” said Lalondrelle.

Stopford–Sackville said that Goedhuis had managed to sell, “all of the Lafite and Margaux and 70% of the Mouton,” and it was a broadly similar story around all of the other major merchants.

They also seemed in broad agreement that Haut-Brion had been the least successful of the first growths.

“Haut-Brion sadly has not worked,” said Lalondrelle, “even though we took a hit on the margin, we sold a quarter of what we usually sell.”

As to what didn’t work, merchants are often quite cagey about explicitly naming names but labels that bombed this year (in no particular order) include: Angelus, Pavie, Grand-Puy-Lacoste, Pichon Baron and Ducru-Beaucaillou but the list goes on.

“There were a lot more disasters than there were successes,” notes Liv-ex director Justin Gibbs.

As mentioned at the beginning, what is quite striking about this campaign is how narrow it was, with BBR and Farr and others only really managing to do any meaningful work with a dozen or so wines.

Even in 2013, notes Lalondrelle, buying may have been lacklustre but it was at least spread over a very broad selection of estates.

The reason of course was the price. Several merchants mentioned that wines came in at levels they felt they could not, ‘offer to our clients’, in good faith because it was not a fair or sensible investment at this stage.

As a result many will have gone to the back of the allocation queue for next year (should they wish to offer the wine). Lalondrelle admitted that this campaign had seen the, “loss of 10 years of allocation building which we will have to start from scratch,” which he described as “quite painful”.

Hargrove agreed: “There were certainly ones where we’ve built up allocations over the years and we said this year ‘we can’t have that on our books’.”

Lalondrelle continued: “We have to have integrity with our customers, they’re the one paying for the rest of the chain. We have the responsibility of being honest and we have refrained from offering the majority of the wines and when we have offered some we have made it clear where it was positioned in the market and in many instances we have sold very few cases.”

 

Fallout

Despite being a small, “limp” campaign, the effect of the 2017s on the market and as part of the on-going changes in Bordeaux and en primeur as a whole are rather more significant.

As well as high prices and poor sales, one of the key narratives this campaign has been the continued reduction in stock being released onto the market by the major châteaux.

Of course in some instances, notably on the Right Bank, frost damage led to naturally smaller yields and therefore limited quantities of stock anyway.

Yet in Pauillac for example, where there was no frost damage, certain estates still lowered volumes by 15%-20%.

Conversely, the reduced stock does not seem to have hindered sales unduly as the uptake was often so poor to begin with that should a merchant have needed something it was easy to track down.

It has been well known for some years now that many châteaux have been purposefully holding back ever more stock.

Partly this is likely a restocking exercise on the part of the châteaux themselves but there are also questions as to whether it’s an effort to control pricing and whether many harbour ambitions to offer substantial ex-cellar stock at a later date. So not entirely withdrawing from en primeur (like Latour) yet trying to make a vintage almost pay for itself twice over which will no doubt strike many as an exemplar of trying to eat your cake and have it.

In the first instance, if holding back stock is an example of trying to maintain elevated pricing then it is cynical and will be seen through as well as the fact it undermines the entire concept of en primeur – buying wine at the best possible price and moment.

And in the second case, Gibbs points out: “The châteux have a lot of stock that, at some point, has to come to market. If you have half your crop and the other half didn’t sell, where does it go? What strategy can you build around it? Do you keep it for five years and then sell it more expensively than the first lot that also didn’t work?”

And altogether, the knowledge on the part of consumers that if they have bought a case of ‘Ch. X’ yet there is still a substantial amount of stock sitting in that estate’s cellars waiting to be released has both a depressive effect on that wine’s performance post-release and offers a yet further disincentive to buy en primeur in the first place because it’s not as though stocks of that vintage are running down any time soon nor is the buyer likely to see any quality return on investment or for that case to even hold its value.

And we haven’t even begun to consider what happens next year if the 2018 vintage is judged to be a success. Will pricing go up again? Back to what? 2016 levels? It does seem the Bordelais have priced themselves into a corner and, therefore will potentially have to come down again next campaign.

“If 2018 is a great vintage like 2016 then we’ll be fine but if it’s anything but a great vintage it is going to be very difficult to load up another round of wines into the coffers of the négoce. 2018 could represent the value for money vintage. It could be better but will have to be cheaper,” muses Lalondrelle.

All in all it doesn’t feel as though there’s been much in the way of forward thinking.

If the châteaux are increasingly blasé about the en primeur process though they might consider that at the other end of the chain so are merchants and their customers.

Although it has been threatened before, Lalondrelle explained that the cost and effort of maintaining a team during en primeur for the piddling results was going to prompt a review of how much time and energy BBR was really willing to commit to Bordeaux outside of potentially ‘great’ vintages.

He said: “Since 23 April til 19 June there have been only seven days when we have made a profit. For us the biggest problem has been the cost of running the campaign daily versus daily profit. Only seven days [in two months] were worth coming into the office for.”

If many châteaux have decided they’ve found a new level at which they intend to sell their wines and therefore the level of engagement remains low, he asks: “Do we only do 20 brands en primeur every year? And the others every few years when there is a big vintage?

“We can’t spend eight weeks paying 45 people to lose money every day.”

A frustrated Charles Lea added: “If the châteaux can afford to keep the wine, and assume they can sell it later, why should they bother with primeurs at all? Recent vintages have shown them less keen to sell en primeur, and so less concerned with making the price interesting to those who wish to buy this way.

“Until there is next a serious downturn in demand, which many producers seem to think will never happen, they will continue not to feel a great need to sell en primeur, and we will presumably limp along in the current fashion until all the merchants also give up.”

Yet it’s worth bearing in mind that as campaigns have become more expensive to run and profits have dipped, so en primeur has, for some merchants, become less absolute to their business.

“We don’t rely on en primeur nearly as much as we did,” notes Stopford-Sackville, while Cooper added: “If something isn’t going to work then there’s a whole lot of other wine out there. It’s no longer Bordeaux or bust.

“By the end of May we were 15% up on last year [excluding EP], having a bumper year with a low interaction primeur.”

The Bordelais seem to think they can continue to offer smaller allocations at greater prices in what seems like supply and demand 101 but what they perhaps forget, suggests Gibbs, is, “the market can also walk away and leave you releasing into a black hole.”

All of which turns attention back onto the ‘squeezed middle’ in the whole process – the négociants.

There have been dire warnings from past campaigns that the build up of stock might cause closures though those haven’t come to pass just yet it would seem.

But there’s no doubt that quite a lot of back vintages are going to be available at knock down rates in the months to come as they seek to generate a bit of capital to pay for the expensive ‘17s that nobody wanted.

How long can it go on? According to one merchant it won’t be long before more start to “grow some balls. It’s only when their [the châteaux] cash flow gets hit that they might re-evaluate their position and what en primeur means to them.”

As Jenkins says: “The négoce have lived in fear that cutting back on ‘X’ means losing it forever. This is the year big négoce have played it tougher. Best thing that can come out of this is situation where châteaux aren’t guaranteed their income.”

One victim of this stance appears to have been Pontet-Canet. Anecdotally at least many négoce seem to have ‘declined’ to take up their allocations of the Pauillac flying fifth this year.

Bad campaigns tend to have a habit of depressing the secondary market a little. Gibbs notes: “The sense is we’re about to get an early summer. I sense everyone is a bit fed up and it feels as though merchants are a little gun shy now and will look again in September. Will have a drift, hopefully not a big one.”

Then again, the high prices – as they often do – have thrown the spotlight back onto the quality and value of physical vintages such as the 2014s and 2012s and Gibbs says trade has been “reasonably vibrant” during the campaign, helped along by a strong dollar.

Browett notes that “trade in physical vintages is up 20% at the moment,” especially for ‘drinking’ vintages such as 2012 and older. It’s not that people don’t want claret, they just don’t want it at that price.

 

In the shadow of greater vintages

After three rather positive campaigns the 2017s have rather sent Bordeaux back to the doldrums again but is this Kampagnedämmerung?

No doubt the old talk about the viability of en primeur will raise its hydra head again though most merchants are still supportive of the system as a whole.

Although Jenkins, like Lalondrelle, may question the allocation of resources to it, he states very clearly that this campaign, “is not the end of en primeur. The odd campaign is going to hurt but don’t lose sight of the ones that do [succeed]. Our customers like buying primeur.

“There are châteaux that have cut back massively but don’t want to ‘do a Latour’. If it’s ex-cellar it just goes straight to Asia and you get no distribution at all.

“En primeur does give you that. If you want to be a global brand with global distribution and people drinking your wine you want the en primeur model.”

Hargrove agrees, stating: “Bordeaux has always had a season and there is some logic for customers to see wines from a region at a certain time of the year. If they all go their own way we’ll see a Bordeaux release nearly every day of the year. Having a concise time of year is something they would regret if they got rid of it.”

Yet if the system is to continue and be profitable all round then clearly ground is going to have to be given somewhere.

For now, the ’17 campaign is definitely to be filed with the likes of the 2001s and 2011s as wines, good wines, that were released in the shadow of a greater vintage and at the wrong price.

In the long run, Stopford-Sackville is right to say that: “The wines will sell when they’re physical because the wines are good. [But] The perception of the campaign as a failure will overshadow them.”

All well and good of course yet it all does feel like running a successful marathon and then shooting oneself in the foot afterwards time after time and expecting a different result.

“Have we learned nothing?” asks Gibbs. Well, maybe nothing but these things do tend to follow an increasingly predictable pattern.

“I have been doing it for 18 years and I know the cards. It’s always the same. I could have told you in February what was going to happen,” says Lalondrelle.

Perhaps someone needs to tell the casino the guests are getting wise to their game…