SUGGESTS THE DIRECTOR OF COS D'ESTOURNEL:
The sale of the 2008 vintage, via the traditional 'future' tasting and marketing campaign will "fall flat on its face" if it is to be held this Spring, according to Jean-Guillaume Prats, general manager of Cos d'Estournel, classified growth of Saint-Estèphe. He advocates postponing the campaign until the Autumn, in the hope the market will have risen from the dead by then.
"The market has been stock still for months." "Just like in 1973, the sales team will be playing cards in the office to pass the time."
"I've never seen such a dead market in all my thirty years in the wine business".
These comments from brokers and merchants alike illustrate how drastically the market for Bordeaux wines has been affected by the economic crisis.
The market has literally ground to a halt, with clients all over the world closing their chequebooks and putting away credit cards, obviously waiting for better days.
Wine is not of course an essential commodity and the world markets have made that quite clear. Even if producers selling direct to customers have not seen their sales suffer too badly, the global figures tell a sad story indeed : In the past five months (August - December), wine transactions between producers and merchants have tumbled by 37%! January is no better. The wine is desperately stuck in the cellars of Gironde. Customers seem to have sufficient supplies and around the globe distribution channels, apparently well stocked, are emptying....slowly.
This is food for thought indeed when one thinks back to the healthier economic situation in Bordeaux during the 2006 - 2007 period. After years of difficulty, the wine was selling again. Sold it may have been, but not drunk....even if world wine consumption has been on the rise for the past few years. Cognac and Champagne are both experiencing the same phenomenon as Bordeaux wine and, after years of healthy sales progression, their 2008 figures will show a sharp decline.
How can the market be resuscitated? With such a varied range of wines and prices - from a few euros to several hundred per bottle, it is diffcult to see a clear path ahead. Professionals are therefore apprehensive about one of the key dates in the Bordeaux calendar, the future tastings of the 2008 classified growths and the launch of the future sales campaign, due to start in less than three months' time.
Every year, at the beginning of April, the Bordeaux vineyard welcomes buyers and journalists from all over the planet. They judge the quality of the vintage and advise consumers to buy (or not to buy) 'futures'.
An ingenious system :
This 'future' market is specific to Bordeaux and concerns some 200 to 300 labels - the élite : the classified growths of the Médoc, Sauternes , Graves, St.Emilion and the Médoc crus bourgeois aswell as the estates of Pomerol. A small market in terms of surface area and volume but which represents a sustantial percentage in value : 15 - 20% of the 3 billion euro global turnover of Bordeaux wines. These élite estates are also important media locomotives for the region.
Future sales allow customers to purchase vintage wines in the Spring immediately following the harvest, when the wine is still undergoing its aging process in Bordeaux cellars and will not be delivered until 18 - 24 months after the harvest.
For example, in the case of a 2007 vintage wine, a 'future' purchase in the Spring of 2008 will arrive bottled at its final destination (the customers home) during the second semester of 2009. Future sales are therefore based on anticpated buying influenced by the reputation of a rare (or supposedly rare) vintage.
The wine becomes the customers property upon payment (before delivery) and the customer benefits from attractive prices for bottles which should appreciate in value with time. Most future buyers are from outside France.
"It's an ingenious system" says Jean-Guillaume Prats, who is the general manager of Cos d'Estournel, a classified growth of 91 hectares in Saint-Estèphe. "However, if the futures campaign is held in the Spring, as is the custom, we will run into a blind wall. If a donkey isn't thirsty, you can't make it drink! The economic situation is too drastic," says this professional who spends a hundred days per year abroad promoting his wines.
"Let's leave President Obama time to settle in and the plans to revive the world economy take effect. Bordeaux should postpone the 2008 future sales campaign until September but keep the 2008 tastings in April. At worst, properties will sell their wines at the same price as they would have in the Spring. Our 200 important world buyers (importers, distributors,..) must be informed immediately and it's up to the first growths (Margaux, Latour, Lafite, Mouton and Haut-Brion) to propose this change of schedule."
Jean-Guillaume Prats is the first professional to offer a defined plan of action admist the general apathy which seems to have overtaken perplexed market operators who seem to have trouble admitting the gravity of the situation. The illustrious estates, some of whose wines have hit strato-spheric prices since 2005, are finding it hard to come back down to earth. Merchants are hoping for a drop in wholesale prices this year, at the risk of seeing the 2006 and 2007 de-valued.
And finally consumers, especially in France, are waiting to take part in a market which has eluded them for so long.
Author:
César Compadre
doc@sudouest.com
S.O. 30/01/09
Translated by Maxine Colas.
