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Playing A Game With Wine...

Photo by: David Yellen

Posted: Apr 27, 2006 4:36pm ET

Burgundy is hot. It’s en fuego. So hot, it’s becoming a better investment than classified Bordeaux.

The Sideways phenomenon helped turned American wine drinkers into Pinot Noir lovers, and recent good vintages have kept the train rolling. That's on the surface. Underneath, though, is another reason – supply and demand.

Industry insiders are familiar with this second reason, which is caused by a small group of wealthy collectors who are basically cornering the market on the top wines. Producers like Roumier, Méo-Camuzet, DRC, Vogüé and a few others have their wines snapped up immediately with a price-is-no-limit voraciousness. It doesn’t take much for a few wealthy individuals to absorb the typical production of an elite grand cru – usually just two or three hundred cases. Then, with the available supply seemingly gone from the retail market, the wines trickle out at auction and suddenly command a hefty premium over their initial release prices. And this is for wines that are still basically current releases.

The 2002 Bonnes-Mares from Roumier fetches $350 a bottle at auction right now (it was released at $120 in May of last year), and the just-released ’03 Bonnes-Mares from Roumier has already garnered nearly $300 a bottle, almost doubling the suggested $175 release price (assuming standard markup when purchased via the licensed importer).

It’s a game a few people are playing, and playing to their benefit. That’s sad on two counts – one, wine is meant to be enjoyed, not speculated on. And second, if anyone should profit from the sale of the wine, it should be the person who made the wine. Think any Burgundian vintners are getting commission checks from these collectors? I don’t think so...

David A Zajac
April 28, 2006 3:01pm ET
I am surprised they haven't caught onto the game yet, like in Bordeaux or increasingly the Rhone. Burgundies are the greatest wines on planet earth, but as you point out increasing difficult to purchase at almost any price short of triple digits. Premier crus at $100+ now almost the norm because they know the grand crus are unobtainable...I still don't get the release prices from Roumier, they are so collectible that the $120 - $175 suggested means they double/triple overnight. If I only had a connection!
Kevin Lewis
West Palm, Florida —  April 29, 2006 9:12am ET
It has to be the the single most discouraging topic about wine. Especially for those that really love it! I read 4 different wine publications a month(including WS) and I Would have to say an overwhelming majority of the wines reviewed or talked about I will never have a chance to taste or even see on a retail shelf. It really is too bad because like you say James, Wine is meant to be ENJOYED! The Laws need to change so that the vinters can sell direct to consumer..The big collectors may still gobble up the wine but at least the money is going to the vinter and not to negociant's and retail owner's. This happens with wine all over the world not just burgundy and I wish in the future Wine would truly become a free market product.
Arnar Sigurdsson
Iceland —  April 30, 2006 8:04am ET
Quality producers should simply embrace the end of fixed pricing. Why not simply auction their whole production at eBay ? For one thing, they would maximize their income. For the end user, cutting out the middle man is an obvious benefit as well. Being a European it is difficult to understand if consumers in USA are not allowed to receive their wine by FedEx. What part of freedom is that ?
Carl Hyslop
Sweden —  May 1, 2006 8:57am ET
I agree with Arnar. This is not a difficult problem to solve - wine is sold to a market, and when supply outweighs demand, prices should rise until demand peters out. If the producers are having trouble pricing their wine then an auction is an easy solution.

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