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Pricing Therapy

Posted: Mar 28, 2006 1:41am ET

Before you all start crying about prices, two things. First, no one has released prices yet. Second, even if they are very high, you don’t have to buy the high-priced wines. There are going to be hundreds of good-value Bordeaux with very good to excellent prices. Trust me. So don’t lose it yet.

Also, if you think that it is going to be a problem for merchants to sell expensive Bordeaux this year, think twice. Bordeaux is a truly global wine, and there are consumers all over the world who want to get their hands on the stuff. From London to New York to Los Angeles to Tokyo to Shanghai to Bombay to Dubai to Moscow...they are going to want to buy the best 2005s.

There just aren't enough of the Chevals, Le Pins, etc., to go around. Even Margaux and Latour made less than usual though they still made about 12,000 cases. Do you think there are 12,000 people in the world who are willing to drop five grand on a case? I think so.

But remember, you can find some great values in 2005 Bordeaux….

Steven Balavender
Tampa, Fl —  March 28, 2006 6:59am ET
"There just aren't enough of the Chevals, Le Pins, etc to go around. Even Margaux and Latour made less than usual but they still made about 12,000 cases. Do you think there are 12,000 people in the world who are willing to drop five grand on a case? I think so."
I agree with James. Worldwide that is probably a drop in the bucket for the following they have. I have seen similar with the cigar market. The handful of top rate producers have created almost a cult following. Raising the prices and limiting the supply just seems to reenforce the demand from that group. That in itself some have called marketing genius. Granted there are always a few barking about price but that has still not stopped the demand, if anything is has increased it. If they were able to produce enough to keep up with the demand (which would make quality suffer) then the allure of obtaining that rare cigar that only a very few select have, would fade. I have seen such cigars on the auction block demand prices that reach the hundreds. I don't think it is much different here with wine, there will always be the "few select" that will be willing to write out that check, sometimes being the higher it is getting the more they want to write it.
Ronald Mcmartin
March 28, 2006 11:51am ET
"Before you all start crying about prices. First no one has released prices yet."

James, James, James(insert shaking-head gremlin here). That's like saying "I have NO knowledge of the 2005 vintage quality without tasting the finished product from the bottle".

First, the weather blogs in Sept & Oct. made guesses on the quality of the vintage. Second, the vignerons made guesses about the quality of the fruit. Third, your barrel tastings made guesses of what the wine will be in bottle. Based on these three factors, can you "guess" what the pricing is going to be? Can you guess the price direction of the lesser satellites?
David A Zajac
March 28, 2006 4:59pm ET
I agree with James in that there are people with enough money that the first growths could charge whatever they want if James or Parker give a 99 or 100 point score. BUT, we are dealing with only five chateau and like it or not, they set the tone for all of Bordeaux (with all due respect to the right bank wines). If the perception among the average wine drinker is that Bordeaux is too expensive and unaffordable, that will and already is trickling down to the other wineries and will eventually affect the entire region. Why do you think the $12 wines from Australia are such a hit in this country? Because the perception is that its a bargain at that price and Bordeaux, at any price, is not. Once the bottom falls out, if that should happen, it will affect all of Bordeaux. Look at how the world has caught on to Pinot's outside of Burgundy....not that DRC, Leroy or Vogue is likely to close their doors anytime soon, but others there have struggled, such that just last year Girardin, who makes fabulous wines for the price, has said he will stop making reds in most circumstances. Bordeaux beware! The world is catching up. Has anyone paid any attention to what Anthony Barton has been preaching regarding prices?
Steven Balavender
Tampa, Fl —  March 28, 2006 9:40pm ET
"If the perception among the average wine drinker is that Bordeaux is too expensive and unaffordable, that will and already is trickling down to the other wineries and will eventually affect the entire region. Why do you think the $12 wines from Australia are such a hit in this country? Because the perception is that its a bargain at that price and Bordeaux, at any price, is not.
I think this is where education/knowledge comes into play, not to say that "the average wine drinker" may alway's have such. I myself am what I would consider a "value buyer" with wine, looking mostly for the highly rated lower priced wines. I can tell you that I have found 2000 Bordeaux that was rated by James in the 90+ range sitting on the shelves that with the 10% case discount have brought them down to as little as $17.99/bottle. These wines are tremendous values IMHO. James has made mention here several times already with some of the following quotes:
There are going to be hundreds of good-value Bordeaux with very good to excellent prices. Trust me. So don¿t lose it yet.
"This, however, doesn¿t mean there won¿t be some excellent buys in 2005. The vintage seems to be outstanding across the board, so you will be able to find wines that cost a tiny fraction of those for first growths. There should be plenty of 90 pointers from $20 and upwards. So don¿t freak out¿.yet."
I trust his opinion and have little doubt that I myself will find "values" in the 90+ rated wines just like I found in the 2000 vintage. It just takes a little research, time and searching to find them. To me personaly, "value hunting" makes wine drinking that much more rewarding.
Delmonico Stkhse @ Venetian
Las Vegas, Nevada —  March 28, 2006 10:15pm ET
We criss-crossed paths with James Suckling all last week. We were about half a day either ahead or behind him while tasting the '05 vintage. My favorites were in order, Ausone, Margaux, Angelus, Haut-Brion, Pichon-Lalande, Cos d'Estournel (Frederic wouldn't let us taste the '05 Latour but the '03 was great). I have to admit that my biggest disappointment was the Mouton. It was clearly dragging behind the other first growths. I liked the d'Armailhac and Clerc-Milon better. It also seemed that the '05 Petrus sample we tried was tired. I expected better from them. My favorite vintner quote was "With the 2005 vintage, we had Bordeaux terrior with California-like weather. (GRIN) It was ideal." Cheers, Kevin M. Vogt, M.S. Delmonico Steakhouse, Las Vegas
David Francisco
March 28, 2006 11:23pm ET
I have been told be a number of individuals who taste barrels samples in bordeaux that there is no way that Wine Spectator is tasting ALL wines blind in bordeaux. The suggestion is that first and second growth chateau do not release their wines for this purpose because they want to control the environment. Therefore, critics must go to each chateau individually to taste those wines, non-blind. James, do you taste all wines blind in bordeaux, or just the less expensive chateau?
Eric Kim
Prince William —  March 29, 2006 12:54am ET
Kevin I will be in Vegas next week... Have not been to Delmonico before... Might have to give it a try. Hope to see you there. Would love to bring a couple nice bottles if that is allowed... I'm sure Delmonico probably has an awesome selection... Not sure I'm brave enough to look at the prices... Hopefully you have a reasonable corking fee... lol... See you on Sunday probably
Delmonico Stkhse @ Venetian
Las Vegas, Nevada —  March 29, 2006 2:37pm ET
Eric,Sorry, I will be off work on Sunday and Monday and can really use the rest after the last 10 days on the road. I judged the San Francisco World Spirit Competition, Spent a week in Bordeaux at a hectic pace (I actually feel sorry for James for the pace he has to endure) and flew direct to San Francisco and drove to Napa to do a complete retrospective tasting at Araujo. All amazing events, but very tiring to say the least. Any chance you could visit another day?Kevin
Brad Coelho
New York City —  March 29, 2006 6:21pm ET
Considering that Bordeaux price is the word of the day, I was curious as to how you all felt about the recent momentum that the Leoville Barton estate has accumulated and if this would stir things up in the Bordeaux pricing world. A couple things to ponder:
-Barton augments prices due to the massive increases in their product's demand.
-2nd growth players that haven't quite had the same string of consecutive successes decide to competitively drop their prices to undercut Barton and increase sales. Or...
-A bit of a rumbling in the cru class system? The sequel to Baron's lobbying for Mouton. Perhaps a Barton, or a Cos, or a Montrose rises up a notch w/ the big boy Rothchilds? Seems unlikely; my understanding is that it's a tediously futile process to achieve a rise in class....tantamount to passing an ammendment in congress.
-Status quo? Barton keeps prices level and the ego in check, producing the 'working mans 1st growth.'
Any thoughts?
David A Zajac
March 30, 2006 9:08am ET
Brad raises interesting questions, but Barton is already probably the least expensive second growth and I don't see anyone rushing to cut their prices to undercut him! Why would they unless they can't sell their wine? Also, I think there is a lot of pressure on him to increase prices, not on the others to reduce. I give Bordeaux credit for at least adjusting prices according to the vintage, how many California vintners expect an increase every year regardless of vintage conditions ie) the 2000 vintage which can now be purchased at auction for less than half of its release price. My biggest concern/problem with bordeax is that they have been on a nice run of vintages since 1995 and things are going poorly for the region as a whole (not so much the classified growth wines), what happens when they get another string of vintages like 1991 - 1994? Does it now start to affect even the classified growths, what about Sauternes? They are making great wines but still struggling.
Eric Kim
Prince William —  March 30, 2006 1:47pm ET
Kevi it will be an honour to meet you... Yes I am there until friday... I will see you Wednesday or Thursday then. You have a great reputation and I look forward to meeting you. Not to mention I look forward to a great meal :)See you next week
Eric Kim
Prince William —  March 30, 2006 10:56pm ET
OOps sorry Kevin I left out the n in your name.I'd be willing to bring a nice bottle with me as well. Let me know
James Suckling
 —  March 31, 2006 7:09am ET
David Zajac. Bordeaux works in economic cycles that are influenced by the quality of vintages. As in the past, if the region experiences a string of weak vintages that are hard to sell, prices will come down for their wines. Bordeaux functions mostly free market environment.
James Suckling
 —  March 31, 2006 7:14am ET
Brad Coelho. It might be better to compare redoing the 1855 Classification to rewriting the Bible. It ain't going to happen for long time.But the classification is much less important today, as you know. The market essentially has its own classification system, which is driven by pricing. For example, Lynch Bages is a fifth growth officially but its prices are in line with most second growths....
James Suckling
 —  March 31, 2006 7:20am ET
Ronald Mcmartin. Sorry for not answering sooner. I am not sure that what you say is true. All these things are not simple guesses. They might be considered educated guesses that are back up with good information. For example, you asked me to guess on the direction prices for satellite wines may take. And I spoke to a handful of negociants in Bordeaux for the last two weeks and they all said that prices would be about the same or just a tiny bit more, say 1 or 2 Euros per bottle.So it's not crystal ball viewing.... This said a good crystal ball for tasting 800 wines in two weeks would be quite a thing!
David A Zajac
April 1, 2006 9:51am ET
James, I understand that Bordeaux is sold via a free market system, my comments centered more around the issue that with the region struggling, could the classified growths start to struggle if they have a string of 4 or 5 mediocre to poor vintages? It seems like in California all the wineries have to build multi million dollar visitor centers and wineries, if cash flow is interrupted for any reason they are in trouble. That is why you never see price reductions for current releases (ie 2000, a poor vintage), since Bordeaux does adjust prices up and down based upon quality, what would happen with a string of less successful vintages?

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