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Bordeaux's First-Growths Make Their Entrance

Châteaus Latour, Haut-Brion, Lafite, Mouton and Margaux release 2010 futures; top second-growths lower prices

James Molesworth
Posted: June 28, 2011

Updated July 1, 2011

Bordeaux’s 2010 futures campaign peaked this week, as first-growth châteaus Latour, Haut-Brion, Margaux, Mouton-Rothschild and Lafite Rothschild finally released their prices, along with several other prominent châteaus, including Yquem, Cheval-Blanc, Ausone, Pavie and Angélus. (This story will be updated as new pricing is released.)

The predictable nature of the campaign, which has seen most châteaus posting price increases of 10 to 20 percent over the 2009s (which at the time was the most expensive futures campaign in history), was continued by Margaux and Mouton, who both released their wines June 28, with both offered ex-négociant at 600 euros per bottle (or about $860), up from 550 euros for the 2009s. Major négociant houses reported solid sales for the first-growth wines. (The ex-négociant price includes the négociant's markup. By the time the wine goes through an importer, distributor and retailer for American consumers, the price will rise even further.)

“There is solid buying interest in Margaux, as well as for Pavillon Rouge [the estate’s second wine]," said Mathieu Chadronnier, general director of CVBG, one of Bordeaux’s major négociant houses. “For Mouton, the interest is clearly there as well. But as it is only the first tranche, with a small quantity, offers take more time to get out.”

The next day Lafite followed suit, releasing its wine at 600 euros per bottle. La Mission-Haut-Brion also released at 600 euros, putting the property across the street from Haut-Brion at the same level as three first-growths. Château Haut-Brion broke ranks with the other first-growths, announcing their ex-négociant price for the 2010 vintage at 660 euros June 30. In St.-Emilion, Château Figeac released at 168 euros, up 5 percent from the 2009 vintage. Châteaus Pavie and Angélus each raised their 2010 ex-négoce prices to 225 euros June 30; the changes amounted to a 14 percent hike on Pavie's 2009 and a 7 percent raise on Angélus'.

The last of the first-growths to release its price was Château Latour, on July 1, and its price raised the first-growth bar even further, coming out at 780 euros ex-négociant, up from 600 for the 2009. Latour also released all of its wine at once rather than following the model of several tranches over the following months. "I don't see the point of making two or three tranches if the négociants and importers are all waiting for all the tranches to be released to offer the wines," said Latour director Frédéric Engerer. "The 2010 price, [650 euros from the château to négociants], is just 5 euros difference from our final average compound price of the 2009 primeurs campaign and about 35 percent lower than our current 2009 market price."

That same day, the most expensive 2010s yet were also announced, with Château Ausone debuting at 1120 euros, up from 960, and Château Cheval-Blanc coming out at 850 euros, up from 700.

While most châteaus have raised prices this campaign, three prominent second-growths decided to cut—Château Cos-d’Estournel in St.-Estèphe (198 euros, down from 215), Château Ducru-Beaucaillou in St.-Julien (150 euros, down from 180 for the 2009) and Château Léoville Las Cases in St.-Julien (192 euros, down from 216). Château d'Yquem dramatically lowered its price from 540 euros for the 2009 to 420 euros for the 2010. But buying interest did not seem to increase despite the wines’ potentially classic quality. One possible reason: All four properties dramatically raised prices last year, which left some customers grumbling.

Interest in Cos was reportedly sluggish. One major négociant chose not to comment directly on the sales of Cos, saying only, "It's really scores, brand reputation and worldwide brand recognition [that move the wine]. Just dropping prices isn't a guarantee to move the wine. The châteaus that went from 80 to 200 euros in the last few vintages have really slowed down this en primeur campaign. The difference in '09 was the fact everyone was jumping back into the market after being away for a few years and so the buying was more widespread."

Other prominent châteaus who released prices this week include Pomerol’s Vieux-Château-Certan at 180 euros (its 2009 came out at 156 euros) and La Conseillante at 150 euros (up from 138). Margaux’s Château Palmer released its 2010 at 215 euros, flat vis-à-vis the estate’s 2009 price.

While buying interest in Asian and other markets was helping to bolster demand, the American market seems to be more mercurial thanks to economic difficulties and clear fatigue with Bordeaux after the much-hyped 2009 vintage.

“With the prices now, it just doesn’t make sense to tie up capital for a few years in wines that won’t be here for a while,” said Tom Gannon, wine director at Rothmann’s Steakhouse, a Wine Spectator Best of Award of Excellence winner in New York. Gannon noted that Bordeaux is his second-best selling category of wine behind Napa Cabernet. But, “there’s no reason for us to buy futures. For Bordeaux to put on the wine list, it’s easier to plumb collectors' cellars for back vintages or take in stock of off years that are drinking well now.”

Others were even more blunt. “Customer interest is near nil, on all accounts,” said Daniel Posner, owner of Grapes The Wine Company, an independent wine retailer in White Plains, N.Y.

But others say the U.S. market is showing signs of life. Michael Binstein, CEO of Binny’s, said the buying interest is strong for the 2010 vintage, so far. “The interest is mostly in the classified growths and well-reviewed wines. But it’s surprisingly strong considering the economy," said Binstein. "Right now I think it’s stronger than it was for the ‘09s. But it’s still early so the jury is out."

Binny's has 27 locations, which bring in $250 million in revenue annually, and Binstein said competition for Bordeaux has grown. While fewer retailers are carrying futures today, those that do sell to dedicated Bordeaux buyers who go looking online for the best source. “Ten years ago there was a local market and we only had to compete on price for Chicago,” said Binstein. “Now with the Internet we have to compete on price with the world market. So if people are saying there is no interest [in Bordeaux futures], I would have to ask at what price are they selling the stuff? It’s really become as competitive a segment as California Chardonnay.”

While prominent châteaus were taking marginal increases or even some decreases for the grand vins, there were also several noticeable price jumps for the estates' second wines. Ducru-Beaucaillou’s second wine, Croix de Beaucaillou, was being offered at 33.60 euros ex-négociant, up from 25.80 for the 2009, while Petit Mouton (the second wine of Mouton-Rothschild) nearly doubled, from 60 euros to 108 euros for the 2010. A day later, Château Latour released its second wine, Forts de Latour at 162 euros, up from 89 euros for the '09, an 82 percent increase. Cheval-Blanc's second wine, Le Petit Cheval, increased in price from 108 euros to 165 euros.

Chadronnier said interest has been big for the second wines. While prices have gone up, the wines seem far more attainable than their big brother first wines. With top châteaus making stricter selections and increasingly focusing on the quality of their second wines, they seem to be garnering more and more attention among value seeking buyers.

James Molesworth
Senior Editor, Wine Spectator —  June 29, 2011 7:26am ET
As of this morning, Lafite has released its wines - ex-négoce at 600 euros for the grand vin, same as Margaux and Mouton, so no surprise there. The big jump came on the Carruades, up to 108 euros, from 68 for the '09.

La Mission is also out at 600 euros, ex-négoce, about 10 percent over the '09. Figeac is at 168 euros, up five percent from the '09.

Hubert de Boüard de Laforest says he will release Angelus imminently...
James Molesworth
Senior Editor, Wine Spectator —  June 29, 2011 9:34am ET
Well, the game is definitely being played with the second wines this time around. Forts de Latour was just released at 162 euros, up from 89 euros for the '09, an %82 increase and mirroring the big jumps for Petit Mouton, Carruades de Lafite, Croix de Beaucaillou, etc...
Bruce Nichols
Naples, —  June 29, 2011 2:51pm ET
It's a brand new ballgame.
Not a lot of tears being shed on this side of the pond with the clients I deal with, although I expect some of this is bravado.

Sure the prices are obscene, but the wine follows the money and that's to the east. Good for Bordelais; just hope they remember us here in the states when (and if... ) the China market goes south.
A Nichols Worth of Wine
Naples, Florida
Jeffrey Ghi
New York —  June 29, 2011 3:41pm ET
It all sounds like that everyone wants to buy these bordeaux and that the only question is, "at what price?".

Consider this, that there will always be someone at any price point, where those who can afford the best, if they decide to step out of the market, the price may drop a little letting in those who can afford near the best now. It's why luxury goods like LV bags, Ferrari cars have never decreased in price.

You'd have so many layers of demand to go through before a chateau would even consider lowering their prices by 90% their current values. Plus alot of these chateaus are established companies and not necessarily in a tight situation with cashflow. this gives them even less incentive to lower the prices drastically. Sounds like the bordelais is simply telling everyone else, keep up or shut up.

I'd doubt we'd ever see "reasonable" prices in our lifetimes ever again barring any truly extraordinary circumstances.
Marc Robillard
Montreal,Canada —  June 30, 2011 3:07pm ET
The wines are simply rediculously overpriced. The Asian market can take the whole lot as far as I'm concerned.
SAQ here in Québec Canada has Smith Haut Lafitte @ $175.00 - Duhart Milon at $155.00 and COS at $465.00!!!
I thought you said they reduced their price? Not here.
Anyhow, this is laughable. Oh yes and the 1st are $1,500.00 per and our dollar is at $1.03 vs the US.
My love of Italian wines grows stronger everyday!!!
Michael Khoury
Montreal, Quebec —  June 30, 2011 4:43pm ET
I agree Marc, the prices are much too high. The 2010 Cos as you said is being sold at $465 , but the 2009 was sold at by the SAQ at $480. Therefore the SAQ did actually drop the price.

The sad thing about all of this is that though the Asian markets have created this surge in costs, the majority of consumers in Asia wouldn't know the difference between a $7.00 bottle of wine and a Lafitte. Everything is based on price, the more expensive the better it has to be. Eventually the bottom will drop out. The question is when.
Marc Robillard
Montreal,Canada —  June 30, 2011 6:39pm ET
Thanks Micheal... That's a 3% decrease. I'll buy a pack of smokes with the savings;-).
And to think I only bought 2 bottles of the 2000 Cos at $210.00 and 3 of the 2004 at $133.00 which you can still get...I know it's from a lesser vintage.
Karl Mark
Geneva, IL. —  June 30, 2011 9:41pm ET
Please define "buying interest". Is this in contrast to sales figures?
James Molesworth
Senior Editor, Wine Spectator —  July 1, 2011 7:15am ET
Karl: Obviously there won't be real hard sales figures for a while - the first tranches from chateaus are typically small and the négoce wait for second and third tranches to have more wine, create a price based on the average of the tranches, to really start selling.

Basically 'buying interest' at this point would mean customers who have expressed interest via their retailers and perhaps made verbal commitments or customers who have standing orders in the queue with the négoce.

One négoce told me they will probably sell two-thirds of what they sold on the '09s. Considering the prices are up and the fact that the crop is slightly reduced for the '10s, that clearly means people are still buying.
Dennis D Bishop
Shelby Twp., MI, USA —  July 2, 2011 1:12pm ET
I can die well enough... considering I was able to share a bottle of Lafite Rothschild with friends several years ago. It was a very nice bottle of wine, but if I never taste a first growth again, there will be no pain in my remaining life.
J G Avedesian
Indian Wells,California, USA —  July 3, 2011 3:05pm ET
I bought several cases of '89 and '90 Bordeaux on the future market. Happily, and saddly, there only remains 3 only bottles of the '90 Latour from this group. I enjoyed them with friends and at times by myself. However the current prices have made me venture into other global markets. I doubt if I'll return to the top scoring Bordeaux.
Nancy H Harper
Birmingham, AL —  July 3, 2011 3:32pm ET
For the 1st growth chateau owner it is all about price.
"buying interest" equals "demand" in economic terms.
If supply is constrained by the acreage, the weather, and the management of the production process; then the only other variable available for the owner to manipulate is price. Supply/demand management. "the higher the demand, the higher the price."
If we Americans get squeezed out because our currency is so inflated, its a shame (let's write a new country and western song about it, oh lord won't you buy me a Lafite, all my friends are drinking Mouton...); but what is obvious to me is that there are people with currency willing and able to buy at the prices set by the owners. Too bad our currency doesn't have the buying power it used to!

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