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Bordeaux Futures Hit the Market, But Is Anyone Buying?

Latour, Mouton-Rothschild and Cheval-Blanc release to mixed reaction; wineries struggle with pricing

Mitch Frank
Posted: May 15, 2012

Updated May 25

After almost a month of quiet, Bordeaux châteaus are revving up the futures campaign for the 2011 vintage again. The past two weeks have seen a flood of en primeur releases from top properties, including first-growths Château Latour and Mouton-Rothschild. Prices are down from the record-setting 2009 and 2010 vintages. But the response from merchants, retailers and consumers has been mixed. A less-than-classic vintage and continued global economic uncertainty may be pushing most customers to wait until the wines are released.

"A primeur campaign can only be justified by any potential profit you can make, but this year the price is only one component of the global equation," said Jean-Luc Thunevin, a négociant and owner of several Right Bank properties. "You have to take into account the general atmosphere, our French elections, the U.S. presidential campaign, the new Chinese government, the euro crisis. All this leads to a global feeling of fear."

A month ago, it looked like the 2011 wines would be sold before May began. Négociants and retailers asked for a quick campaign, and Château Lafite Rothschild released its first allotment April 16. But then things slowed to a crawl. "Everyone wanted someone else to lead the pack," said Jean-Charles Cazes of Château Lynch-Bages. "Finally, people got fed up at waiting."

On May 9, Château Pontet-Canet produced the spark when it released a price of 66 euros ex-cellar, 34 percent lower than the release price of its 2010. First-growth Château Margaux followed suit on May 14, releasing its first tranche at 360 euros ex-cellar, along with Lynch-Bages (69 euros), Palmer (160 euros) and Lascombes (43 euros), and several other leading estates. Haut-Brion (360 euros), La Mission Haut-Brion (216 euros) and Angélus (138 euros) released a day later.

After a surge of so many releases in just two days that négociants began to complain, other top properties waited a week. Mouton released on May 22 at 360 euros ex-cellar, accompanied by Pichon Baron and Pichon Lalande at 72 euros a piece. Two days later it was Latour's turn—and this will be the last vintage Latour releases as futures—and the estate broke with its fellow first-growths by releasing at 450 euros. Cheval-Blanc released its first tranche at 465 euros on the same day.

The delay followed by a deluge suggests owners were unsure of how to price their wines. While the prices are significant drops compared to the 2010 vintage—Margaux, Mouton and Haut-Brion dropped prices by 45 percent—they're not much different from current prices for the 2008 vintage, which Wine Spectator senior editor James Molesworth considers similar in quality to 2011.

"The courtiers [who broker between châteaus and négociants] told property owners that the prices needed to come down, but could be more than 2008—but not too much," said Cazes. "But people looked at the current retail prices and didn't want to cut too much. The problem is most of those prices reflect demand from Asia, which has cooled off."

Négociants report that wines released at prices close to current 2008 retail prices are selling well, such as Lynch-Bages and Pontet Canet. Those that are higher—such as Cos-d'Estournel and Palmer—are not as much in demand. Cheval-Blanc dropped prices by almost 50 percent from the 2010 vintage, but it raised prices so steeply in recent years that several older vintages are on the market for less than the 2011.

Chinese consumers, who showed great interest in the 2010s, have backed off on futures, after watching many of those record 2010 prices decline a few months later.

And in the U.S., despite evidence that the economy is growing again, only longtime Bordeaux collectors seem to be buying, and they're being choosy. "We sold Pontet-Canet 'well,'" said Daniel Posner, of Grapes the Wine Company in Westchester County, N.Y. "Not nearly as much as we normally sell, and we made no money, but passed it through to clients."

Other retailers report that the vintage faces two hurdles—quality, though good, is not as high as 2009 and 2010. But at the same time, prices have not come down enough to justify scooping up a lot of wines.

That may change as customers place orders in coming months, but continued economic uncertainty is not helping. Latour released its price on a day when financial markets are worried about Greece and other troubled European economies, with the euro hitting a low not seen in years. "There is an atmosphere of fear," said Cazes. "People are saying, 'What if the euro goes down? What's the incentive to buy now?'"

Christian Wyser-pratte
New York, NY —  May 16, 2012 3:58pm ET
As someone who still has hundreds of cases of wine, going back to 1982 Latour, Cheval Blanc and La Mission Haut Brion, I find that my pressing issue is how to consume the 1982 Cheval Blanc I purchased for $75 in 1989 and the 1990 Lafite Rothschild I purchased for perhaps $100 in about 2004. So whether these 2011 wines of mediocre quality are selling for $500 or for $1,200 really is of no consequence to me. And I have news for the Bordelaise: the top tier of Argentinian and Chilean wines (Clos Apalta, Catena Zapata, Achaval Ferrer, etc.) are phenomenal, very highly rated, and cost what the Bordeaux wines used to cost a long time ago. There's always a greater fool out there, of course, and lately his name was something like Wang Xao-Ping. Who will take his place? Maybe the music has stopped playing.
Gerry Ansel
Fullerton, Calif —  May 16, 2012 5:27pm ET
Christian, I completely agree, and would add that many of the appellation's lesser-known wines are just as good as the Cru Classe. I'll by those and let the Chinese millionaires pay 10 times as much for a status symbol. The bordelais are laughing all the way to the bank.
Theodore Mukamal
NY, NY —  May 17, 2012 2:51pm ET
Prices for most chateaux seem much higher than 2008 prices, and the 2011 vintage sounds more tannic and less friendly than 2008.

I continue to justify value in bordeaux, even in the pricey 2009 vintage, but I really doubt I'll buy even one bottle of 2011's, let alone on futures!
Peter J Labella
Harrisburg, Pa —  May 20, 2012 12:17pm ET
I totally agree with Christian. There are great wines world wide that are reasonable priced and you don't nhave to chase after 1st or even 5th growths coming out of Bourdeaux. While i don't have the debth of Christians cellar, I have found great wines in other parts of the world. Vall Llach from Spain, Cayuse from Walla Walla and barolo form Contero are great drinking wines.

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