America : As the economic crisis goes planetary, the Bordelais Guillaume Touton, an importer based in New York, notices how the market is falling back on less expensive wines.
Based in New York, Guillaume Touton is one of the important wine importers in the U.S. North East. Set up twenty years ago, the company "Monsieur Touton Selection Ltd" employs 130 people in four offices : in New York (headquarters), Washington, Boston and Chicago and imported 1 million cases of wine in 2007. Guillaume Touton is also a consultant for foreign trading. Wine consumption has been on the increase in America for the past fourteen years and hit 26 million hectolitres in 2007. The U.S. market is the second largest in the world after the French domestic market.
Sud Ouest : What is your analysis of the current situation in the U.S, prey to the financial crisis?
Guillaume Touton : Here everyone is very scared and a sort of terrified hysteria pervades. In contrast to France, where peoples' bank savings are often secure, most U.S. savers pump all their money into the stock exchange, even retirement pensions. So we can say that the financial crisis has hit everyone's pockets. Millions of dollars are lost or evaporate every day.
Sud Ouest : What are the consequences for the consumer market?
Guillaume Touton : Americans buy less : less petrol, less consumer products, less meals in restaurants...This has been a very noticeable trend for a month. As for wine, this much is clear - we no longer sell top-of-the-line bottles!
Sud Ouest : Has the market for great wines stopped dead?
Guillaume Touton : Yes. Just today I postponed an order for Bordeaux grand crus. I told the merchant "We'll wait and see". It is important to note that a bottle leaving the Bordeaux area at a price of 15 euros is found in American stores at 50 euros (retail price). Included in this retail price are the transport costs, the sales margin and especially the taxes which are very high. It's the same story for wines from other vineyards. And no one in New York is in the mood to buy a big car or to open an expensive bottle of wine at the moment. Champagne and Cognac imports are also on the decrease.
Sud Ouest : Will Americans stop buying and tasting wine altogether?
Guillaume Touton : No. The standard of living has taken a nose-dive and consumers are making do with cheaper wines. Even in a financial crisis, consumers do not suddenly stop enjoying wine! But I have noticed a shift in consumer values. Wines leaving their country of origin at a price of a few euros and which sell here for around 10 dollars are still selling well. That is why my turnover continues to increase, because I import Malbec from Argentina, Syrah from Australia and many other wines from Spain and Italy. In fact five or six containers (4 - 5000 cases) of each arrive every day here. Bordeaux respresents 10 - 15% of the total volume of my imports, depending on the year.
Sud Ouest : What kind of future do you predict for your profession?
Guillaume Touton : Grey clouds are gathering on the horizon and the problems are only just beginning...All the American states and all the distribution and consumer channels are affected by this crisis. Unemployment will rise. I have never witnessed a situation like this in the twenty years I've been in America. Even after September 11th, or after the French "boycott" following President Chirac's refusal to back the war in Irak.
With a stock of 200,000 cases in New York, which represents between 18 and 20 million dollars (a quarter of which is Bordeaux wine), I am looking at two to three months potential sales. Concerning supplies, I've stopped any new orders appart from the more modest wine properties. In order to sell to the U.S. in the immediate future, I would rather be a producer in the Entre-Deux-Mers or Côtes vineyards than that of a great classified château, as the market for these famous wines is at a standstill. The good news is that the dollar is gaining weight against the euro.
César Compadre
doc@sudouest.com
S.O. 14/10/08
Translated by Maxine Colas.