E. Guigal's single-vineyard Côte-Rôties--La Mouline, La Landonne and La Turque--have always been among the best and most highly sought-after wines from France's Rhône Valley. But in the 2003 vintage, they gain an additional claim to fame--the most expensive Rhône wines ever released. Within days of their official release from the domaine, prices at some retailers have reached $800 per bottle, far beyond what the normal markup should be.
The price increase did start with Guigal, but the winery's action does not account for most of the jump. "We have a tiny crop in 2003 and the quality of the wines is outstanding," explained Philippe Guigal. "We decided to raise the price within a reasonable percentage, to 143.50 euros per bottle [to the European market]." That price, $187 at current exchange rates, represents an increase of 35 percent over the 2001s. (The 2002s, from a weaker vintage, dropped in price from the '01s.)
For the U.S. market, the wines are being sold through Ex Cellars Wine Agencies, Guigal's exclusive licensed U.S. importer since 1997, to retailers for $210 per bottle. Assuming a normal markup, the wines should then be available to consumers at retail for about $400 per bottle when they arrive in the states in about six weeks.
While the price increase from Guigal's door may seem large on the surface, the size of the Rhône's 2003 crop was reduced by 60 percent due to a torrid heat wave. Yet quality is very high; the vintage rates 94 points on Wine Spectator's 100-point scale. Consequently, Rhône vintners throughout the valley increased their prices for the 2003s to offset the dramatic drop in volume.
Guigal's La Landonne cuvée typically totals 800 cases annually, but the winery only made around 500 cases in 2003. La Mouline and La Turque normally range from 300 to 400 cases annually, but dropped to 230 and 210 cases, respectively, in 2003.
"There is so little wine to go around, the speculation is driving the price way up," said Fred Ek, the owner of Ex Cellars, who has been brokering wine for Guigal since 1968. He noted that retailers who are not his clients are offering the wines, which they can obtain through the gray market--unlicensed, secondary sources such as private collectors and restaurants in Europe that sell their allocations for profit--and mark up to whatever price collectors and investors are willing to pay. "This is really a gray market problem," said Ek. "The sad thing is, the gray market is supposed to lower prices by giving people access to more wine."
The current $800 price for Guigal's "La La" wines easily outpaces that of other top 2003 Rhônes, including the $500 currently being asked for bottles of J.-L. Chave Hermitage and Domaine du Pégaü Châteauneuf-du-Pape Cuvée da Capo, whose suggested retail prices were closer to $250. The Château de Beaucastel Châteauneuf-du-Pape Hommage à Jacques Perrin Grande Cuvée and M. Chapoutier's red and white Ermitage L'Ermite bottlings are garnering around $250 per bottle at recent auctions, according to the Wine Spectator Auction Index.
"I do find it kind of obscene," said Ek. "But that's kind of the way it works. I saw one offering only 12 hours after Guigal formally announced his prices--the stores just want the quick kill on these wines."
Premier Cru, a specialty retailer in California, is one of the stores offering the wines for $800. Wine buyer John Fox said he had procured about 10 cases of each of the three cuvées through gray market sources in Europe, and was selling them to private collectors who had been on his waiting list for the wines. He said he had no qualms about the price he's charging since he's not buying through the licensed importer. "My customers are grown ups, and they understand the game," he said.
"There's such small production, folks with deep pockets want to secure the wines," said Fox. "They see what the older vintages are going for, and they know how unique the vintage is, so it's something they've got to have."
Guigal releases its top wines on a strict allocation system; those who buy the single-vineyard wines along with the winery's lower-priced offerings every year hold their place in line. If there is a production drop, allocations are reduced accordingly so that regular customers can still get some of the wine. Nonetheless, although the 2003 crop was 40 percent of the normal size, Guigal sent 75 percent of the normal allocation for the U.S. market through Ex Cellars.
"We decided to keep a good allocation for the U.S. to maintain the good business our importers and retailers are doing there," said Guigal. "[Ek] has been very reasonable with the pricing. The consequence is that we reduced the volumes on the French market." Therefore, he said, American retailers who deal with gray market sources in France should have more trouble finding the wines this year.
"I can understand that final consumers are unhappy about the crazy pricing of $800," said Guigal. "But my only advice would be to refuse to buy the wines over the suggested retail price."