Chateau Pichon-Longueville-Lalande, one of two second-growth estates in Pauillac, continued the trend this week by offering its 1998 wine for 10 percent less than the opening price for its 1997. The latest wine was sold to merchants in Bordeaux for 225 francs ($36) a bottle -- although some in the industry said the drop was not enough, and they were finding it difficult to sell the wine to customers.
Bordeaux's price reductions have come in response to demands from buyers around the world, who overpaid for the 1997 vintage and have experienced a significant slowdown in sales of Bordeaux's finest wines. Consumer demand has been very low for the '97s in general, and those wines are now beginning to drop in price.
"Anyone who bought 1997 Bordeaux is going to lose money," said Stephen Browett, an owner of London's Farr Vintners, one of the largest traders of fine Bordeaux in the world. "The wines were just too expensive. Now that the 1998s are less expensive in general, you may see some 1997s selling for 40 percent lower than their opening price from last year."
Chateaus traditionally begin selling their newest vintage as futures -- called "en primeur" in French -- in the spring following the harvest. When customers buy futures, which is a way of guaranteeing access to wines that are in high demand, they are purchasing wines that are aging in barrels at the chateaus. Buyers don't take delivery of the wines until after they are bottled and shipped, usually slightly more than two years after the harvest.
The opening prices are those offered to merchants in Bordeaux, who then sell the futures to clients around the world, including U.S. distributors and retailers. On average, U.S. consumers pay about two to two-and-a-half times the opening price, after factoring in exchange rates and the margins tacked on by all the parties in the distribution chain. Often, though not always, futures cost less than the prices of the wines after they are released.
The biggest-name chateaus to release 1998 prices have been several of the first growths. Margaux and Latour both set their '98s at nearly 430 francs ($70) per bottle, a 14 percent decline from their 1997 opening prices of 500 francs. Lafite-Rothschild and Mouton-Rothschild set their prices at 480 francs ($78).
Other well-known chateaus that cut prices for their '98s include: Angelus, to 300 francs ($48.50) from 330 francs; Ducru-Beaucaillou, 210 francs ($34) from 250 francs; Gruaud-Larose, 160 francs ($26) from 210 francs; Leoville Poyferre, 120 francs ($19.50) from 150 francs; Sociando Mallet, 100 francs ($16) from 115 francs; Beychevelle, 98 francs ($16) from 120 francs; Kirwan, 86 francs ($14) from 95 francs; and Chasse-Spleen, 70 francs ($11) from 78 francs.
Not all chateaus, however, have dropped their prices. For instance, Leoville Barton, the respected St.-Julien estate, kept the same price as last year for its '98 -- 150 francs ($24). Owner Anthony Barton has sold his wine at the same price level for the last three vintages.
Some chateaus have actually increased prices slightly, most notably estates in the region of Pomerol, which clearly made the best wines of the vintage. For example, L'Enclos sold its '98 for 80 francs ($13), compared to 75 francs for the '97.
"It's a strange market really," said one wine merchant in Bordeaux. "Basically, any well-known chateau selling its '98 for less than 100 francs a bottle is selling very well, but for others, it is less sure. The estates in Pomerol are selling well, as are those in St. Emilion, but the rest really depends on various factors, such as reputation relative to the price of the wine."
More top estates are expected to release prices later this week, including Haut-Brion, the first-growth property in Pessac-Leognan, which produced one of the top wines of the vintage. "I would expect Haut-Brion's price to be the same as the other first growths," said another Bordeaux merchant. "But you never know. It's a confusing market at the moment."
Read James Suckling's barrel ratings of 1998 Bordeaux online, or look for the upcoming May 31 issue of Wine Spectator.
For more on Bordeaux futures:
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