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Behind the Golden Veil


Posted: Mar 29, 2006 9:26am ET

I was tasting some great wines from the Right Bank yesterday, including Pétrus, Cheval-Blanc, Le Pin, Vieux Château Certan and Ausone, and I ran into a grower I know from Graves, and he reminded me of some sad truths about Bordeaux at the moment.

He said that he felt strange that all the wine world – some say 5,000 wine merchants will arrive in Bordeaux in a few days – is coming to the region to taste 2005, but doesn't really gave a damn about the small wine producers of the region.

“It’s strange that everyone will be driving all over the area to visit various châteaus, but there will be so many who won’t be visited,” he said, very sadly. “They will be at their gates looking out and wondering why nobody wants to visit them.”

It sounds very dramatic, but it appears to be the truth. The financial situation for the average wine producer – and there are more than 10,000 – is terrible. I heard from one négociant yesterday that he was paying the equivalent of about $1.20 a bottle for simple Bordeaux in bulk from the great 2005 vintage. “It doesn’t seem possible,” he said. “But it is very, very sad.”

He said that many properties are for sale, not only big ones. “The banks a few years ago were giving people 110 percent financing to buy wine properties, and now they want their money back,” he said. “It is shameful.”

The banks may well have given the producers ropes to hang themselves. There seems no way out of their misery. The market is just not there, even with the quality of 2005.

In fact, many small producers did not have the money to properly maintain their vineyards or make their wines. I tasted a number of barrel samples today from small châteaus that were pretty mediocre.

What a shame. What a pity. The reputation of 2005 Bordeaux will not be enough to save many.

So it's important to remember that not everyone in Bordeaux appears to be celebrating his or her good fortune with the 2005 vintage.

David Hamshere
March 29, 2006 11:43am ET
Regrettably this same story can be repeated in my field as a retailer of Mens & Womens clothing. There is a huge demand for Top Brands ala Prada, Gucci,Amarni etc with little if any price resistance. The smaller, no name producer of clothing in Europe cannot compete economically with India & China production.I believe this parrallels the comparison between the demand for the Trophy Bordeauxs at any price and the fate of the smaller Bordeaux producer who has difficulty making any return on his production.Market forces are at play.
Premier Group
March 29, 2006 1:42pm ET
"What's up with these importers? Or what am I missing."Strange that inexpensive Bordeaux is not coveted by importers--our store could certainly stir up high interest for Bordeaux under $10. Marketing, marketing.
Claude Pope
Raleigh, NC —  March 29, 2006 3:14pm ET
Is the "terroir" of the small producers so different from the blue chip chateaux that they can't produce a decent wine? If not, then I would think there to be a gold mine of properties available for those with the "right stuff" to produce - and market - world class Bordeaux for a reasonable price. Heck, with all of the press that the 2005 vintage will receive, even the mediocre chateaux will still have a decent year.
Guus Hateboer
Netherlands —  March 29, 2006 3:39pm ET
James, about small producers from Margaux; 2005 is a Margaux year... Do you remember tasting Chateau Piche-Leibre or Chateau des Eyrins this year? And if so, what's the verdict?
Beverly Skelton
March 29, 2006 4:08pm ET
THE SITUATION IN ITALY IS THE SAME AS IN BORDEAUX.WE HAVE A BOUTIQUE WINE PRODUCTION OF UNDER 30,000 BOTTLES IN THE VAL D'ORCIA REGION IN TUSCANY WITH A TOP WINE EXPERT AND WE'RE HAVING A VERY DIFFICULT TIME FINDING AN IMPORTER WHO WILL TAKE US ON. SEEMS THAT THE VERY EXPENSIVE TROPHY SANGIOVESE AND BRUNELLOS HOWEVER CONTINUE TO HAVE THEIR MARKET WHILE THE SMALLER PRODUCERS CAN ONLY FORESEE A FLOUNDERING FUTURE.HOPEFULLY THINGS WILL CHANGE OVERSEAS OR THE WINE PRODUCTION HERE IN ITALY FOR GOOD VALUE PRODUCTS WILL ABRUPTLY COME TO A HALT.
James Laube
Napa, CA —  March 29, 2006 5:52pm ET
Jim,

Great job! Almost enough to make me miss being there with you!

JL
Joseph Romualdi
Woodbridge, Ontario, Canada —  March 29, 2006 6:56pm ET
Do you think the decline of the US dollar versus the rising Euro has anything to do with this? Recent trend shows the US dollar strengthening somewhat. If this continues, the US dollar will be able to buy more wine (import prices will look cheaper).
Dr N K Yong
March 29, 2006 10:19pm ET
James,Have not seen you for some time. I can see -- and read -- that you are keeping well and as active as ever.Best wishes from us both.
Dan Jaworek
Chicago —  March 30, 2006 11:22am ET
I certainly hope this changes. I can¿t afford wines at $500/bottle. Never could. Probably never will. I¿m a bargain hunter when it comes to wine. I¿m not cheap. I actually spend more on wine than I should. But my income only provides for so much. I seek out the small producers who make a good wine at a reasonable price. And I do my shopping in the French aisles at my wine shop. I haven¿t bought a bottle of California wine in years because there is little in the way of quality when it comes to lower end of the price scale. Southern France offers some great, food-friendly wines at low prices. Bordeaux does too if you know what labels to look for. And the Loire has been doing so for a long time but availability is limited even here in Chicago. Every wine lover I talk to gets excited to hear about a great $10 bottle. There¿s a market for quality wines at reasonable prices. The wine collectors won¿t be interested in them but the wine DRINKERS will. Do we need a petition to be signed?
Wine Exchange Business
March 30, 2006 12:51pm ET
One of the reasons I go to Bordeaux, especially in a vintage like 2005, is to find its best kept secrets. I avoid going during the UGC because there are so many people and I find it hard to taste going from table to table. I prefer to go the week after, that way I can go at my pace (which usually is pretty quick) and taste many unknown properties. Finding killer $7-$12 dollar juice that is good is hard and you have to taste many so-so bottles to find the diamond in the rough. But when you find that bottle or bottles as was in 2003, it makes it all worth it. The one thing that is a disadvantage to these small unknown properties is that even if they are good, unless they're reviewed, they will never sell as a future.....
James Suckling
 —  March 31, 2006 6:32am ET
Wine Exchange Business. That's great what you do. Send me some samples to my office in Italy so I can review what you find. I am with you. I love the great growths of Bordeaux, but I think that the possibilities for good quality Bordeaux could be endless with the right support from the global wine trade such as yourself.
James Suckling
 —  March 31, 2006 6:35am ET
Dan. I am not much of a petition signer! But I agree with you on value bottles. I am going to try very hard to taste more and more reasonably priced Bordeaux to find good value bottles for all of us, not only in 2005 vintage but 2004 and 2003. This goes for Italy too, or where ever else I might find something that represents a good value in the bottle. Thanks for your thoughts.
James Suckling
 —  March 31, 2006 6:37am ET
NKSame to you and I hope life is good in Singapore. I hope to get out your way in the autumn. If you come to Italy, or Europe, this summer, you know where to find me! Best to your lovely wife.
James Suckling
 —  March 31, 2006 6:42am ET
Joseph Romualdi I don't think the decline of the dollar has had much to do with this. This is a deep, difficult problem in Bordeaux which goes to the core of the French government and system. The fact is that there just isn't a market anymore for many of these cheap and inexpensive wines (most which are medicore quality). The biggest decline has been in the French market where the government continues to hammer at its populace to quit drinking -- even wine. And after that, there is competition all over the world from places such as Chile, Italy and Australia which make very good wines at low prices in a better style that consumers around the world can appreciate. Nobody seems to have a solution for these Bordeaux farmers...
Mark Knight
March 31, 2006 9:17am ET
Surely what is required here is looking after your customers in good years and bad. i.e build up a relationship with them and treat them consistently and fairly. If someone buys from a chateau in an average vintage then it is beholding on the producer to look afer them in a great year. Put the price up by all means but not exorbitantly. I have the horrible fear this year that those of us who bought in 2004 and 2002 are going to find ourselves squeezed this year as we did in 2003 as big money floods in and hoovers up the best wines. But will that big money still be there at the next average vintage or will it have moved elsewhere whereupon the Bordelais will then come and expect their old customers to pick up the slack.
Guus Hateboer
Netherlands —  March 31, 2006 2:22pm ET
I have found that here in the Netherlands, quite some wine shops send out their own people to Bordeaux and taste, and actually...apparently taste quite a few wines from unknown (at least to me) producers. Then, back home, they advertise to buy these so-called top value wines en primeur (around 12-20 euro/bottle). How in the world can I buy these, when there's no objective critic (although being subjective on his/her own palate) giving me any guidance to whether such unknown names did indeed produce a proper wine. I asked James about Ch Piche-Leibre and Ch Eyrins (both Margaux) for instance, but apparently these producers did not deliver to his hotel to join the blind tasting. In other words...is it also their fault that they did not deliver for the blind tasting, are they scared of what might happen and how can I trust Dutch wine sales men advertising for something that I might try in two years from now? It is not easy!
David A Zajac
April 1, 2006 9:44am ET
Guus, your comments are interesting, I have established relationships with two shops that sell futures in this country and must admit that if they tell me something is a must buy, I buy it. Of course, I have been dealing with them for 10+ years and they know my tastes and I trust their recommendations, so it is a no brainer on my part. If they want to sell me bad wine, I wouldn't be dealing with them. If these are people you trust, then accept their recommendations but buy small at first to be sure you do in fact like their suggestions. I know of many people that taste in Bordeaux other than the recognized critics and try to take all the information available and use it to my advantage. Don't be afraid to try something different! If your still afraid to put money down today for wines that won't be available for 2 years with no critic rating the wine, ask for some current recommendations that you can take home and try. If you like those suggestions then consider the futures.
Jack Chang
Alpharetta, Georgia —  April 1, 2006 9:43pm ET
it is true that chile, australia and other countries have great wine values this days, but there is still something that the emerging wine countries are lacking of. and that is elegance, finesse and integrity in their wines.something that only bordeaux wines have allowed me to enjoy and still continue to amaze me.i only buy small chateaus for my business, and try to educate my customers as much as i can about the smaller chateaus. by the way , your blog is a great reading.. keep up the good work.!!!
Michael
NY —  April 6, 2006 2:56pm ET
Beverly Skelton - A friend of mine is an American importer and looking for the products you are seemingly ready to export. He is in Italy now, I believe, and I will forward your name and number should you contact me at 917 751 5158. Thanks and the best of luck.

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