At the annual Hospices de Beaune auction on Nov. 16, optimistic Burgundy merchants paid a surprising 21.4 percent more for the 2003 wines than they did for the red and white Burgundies of the high quality 2002 vintage, auctioned last year.
The nonprofit Domaine des Hospices de Beaune, which is owned by the city's hospital, sells its new crop on the third Sunday of November. The auction serves as an early barometer of Burgundy prices for the newly completed vintage.
Burgundy's négociants, or merchants, paid just over $4 million for 560 228-liter barrels of wine, or 6,114 euros ($7,192) each, compared with 5,036 euros per barrel in 2002 (last year's price is given in euros only because the dollar has declined significantly since then). While only négociants may bid at the sale, they buy on behalf of American, Japanese and European clients who have placed orders in advance of the sale.
Négociants disagreed, however, how the auction results might eventually affect consumers.
Louis-Fabrice Latour, president of the Syndicat des Négociants en Vins Fins de Bourgogne, a leading trade organization, said his company, Maison Louis Latour, had decided to increase prices in the American market early next year.
But other négociants said the higher prices were unlikely to be reflected at the consumer level next year. "We feel there is an interest among our clients around the world to buy these 2003s, but the market is slow and I don't believe we can pass on price hikes [to consumers] at this stage," said Michel Picard, a négociant from Chassagne-Montrachet and a major buyer at the sale. As long as the dollar is low, which reduces Americans' purchasing power, prices for French wines should remain stable, he added.
The 2003s sold slightly below the level of the wines from the outstanding 1999 vintage four years ago in constant terms, and Burgundy vintners were buoyed by Sunday's results, saying they reflected a renewed interest in Burgundy wines, particularly from Americans and Japanese clients. After reaching a record in 2000, prices at the Hospices de Beaune dropped a combined 30 percent in 2001 and 2002.
According to some merchants, the higher prices at the sale also anticipated a U.S.-led global economic turnaround next year and reflected a growing consumer interest for a "unique" low-crop vintage produced after a freakish hot summer.
"We can see the light at the end of the tunnel," said Bertrand Devillard, who heads négociant Antonin Rodet. "We have passed the bottom of the crisis."
The négociants said they hoped the sale marked the end of a crisis that culminated earlier this year with the consumer boycott in the United States against Burgundies and other French products over France's opposition to the Iraq war.
"There are lots of Americans here, and it is a good sign," said Pierre-Henry Gagey, head of Maison Louis Jadot Gagey, a merchant house based in Beaune. "Americans are always interested in unique vintages."
The Hospices auction has a history of reflecting general global conditions. Between 1995 and 2000, the auction mirrored a booming economy and relatively peaceful world, and prices doubled. But the prices obtained at the Hospices de Beaune have not always reflected the quality of the vintage. For instance, red Burgundy in 2000 is far from exceptional yet the '00 Hospices wines sold for a higher price than the Pinot Noirs from 1999, an outstanding vintage for red Burgundy.
It remains to be seen if the quality of the 2003s justifies higher prices than those garnered by the potentially outstanding 2002s, but many of the Pinot Noirs made by Hospices winemaker Roland Masse were excellent. This year, the 466 barrels of red Burgundy sold for an average 23.6 percent more than the 2002 Pinots, while the white Burgundies on sale Sunday went for 12.2 percent more than the 2002 Chardonnay from the domaine.
Despite difficulties during the growing season caused by the heat and lack of rain, Masse produced concentrated, rich, spicy, full-bodied and deep in color wines. Analysis shows that the concentration of tannins and polyphenols is the highest in more than a decade, and twice as high as for the '99s.
Masse said the summer drought and the low yields -- Hospices crop averaged 25 hectoliters per hectare, or a third less than in 2002 -- help explain the extremely high natural sugar levels in the grapes. The 2003 Chardonnays were described as less successful because of alarmingly low acid levels.
The Pinot Noir also recorded low natural acidity, and winemakers were authorized to compensate by adding tartaric acidity to their reds as well as to their whites. Most winemakers agreed that the 2003s wouldn't show the same balance as the 2002s, but the 2003s seem concentrated, massively tannic, with the sort of ripe fruit that reminded some winemakers of rich California Pinot Noirs or reds from the Southern Rhône.
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