Special report: Bordeaux 2017 – A risky strategy

By June 28, 2018Bordeaux, Bordeaux 2017

After a relatively successful 2016 campaign, the UK’s leading merchants’ En Primeur sales halved to £45 million this year, while the average sterling release price of the 2017s dropped 11.8% from 2016. Volumes sold fell by 60%. The sales balance was focused heavily toward ‘winners’ such as First Growths and popular brands, while the majority struggled and will weigh heavily on the market for years. On the whole there was a reluctance to pay close to 2015 prices for wines considered to be around or below 2014 in quality.

Today, Liv-ex has published a concluding report on this year’s campaign. We consider:

  • Critical reception of the vintage
  • Merchant sales this year
  • Which wines worked, and which have been left unsold
  • A build-up of wine in Bordeaux
  • Increasing tension between the primary and secondary markets

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One Comment

  • Whilst the information and detail that you give in this report is admirable there is one over riding factor that will controls everything. The great Chateaux, about whom this report is written, are so wealthy that they don’t have to sell at any price.

    In the ’70s the Chateaux were in a very different position – many were short of cash and had to sell a %age of their poor vintages at very cheap prices to provide necessary income. In 1974 Peter Sichel, part Owner of Palmer, rang me to thank me for buying his 1973 (hardly a great year) and offered to double my purchase for no extra cash.
    In 1984 I started a Negociant business in Bordeaux with a view to a) offering the Chateaux some discipline in their distribution channels and b) giving more control to my London business. Almost every Owner expressed little or no interest in knowing where their wines were sold as ‘that was the responsibility of the Negociant’.
    We used the 1984 en primeur campaign to gain many allocations with the Chateaux as we, amongst others, believed this was the future for the Negociant. Each year we took up our allocations until I could afford it no longer. We lost a fortune on the 1984 vintage, made a little money in 1985 and broke even in 1986. Out of 10 vintages I believe the Negociant and UK Merchant make money on 3 releases, break even at best on 2 releases and loose money on the rest. Yet every year one has to buy to protect one’s allocation

    The Owners today are so wealthy and the market so global that the boot is very firmly on their foot. Most of them don’t need money and so can release at what ever prices they want – more mindful of protecting the market prices of their older vintages
    Viticulture and vinification techniques today are so much more sophisticated compared to even 3 Decades ago that I cannot see a poor vintage (ie similar to 1972 or 1973 vintages) ever happening again.

    En Primeur Campaigns are a busted flush – yes to buy your allocations in 2009 and 2010 is profitable if the Merchant sold on immediately but then the Collector lost money over the ensuing 5-7 years. In poor years the gamble to invest is so great it is far better to look back over the past few years of physically available stock and invest one’s money there. At least you can store the stock in your own name. If 2018 turns out to be a stellar year the release prices will rocket accordingly viz 2009 and 2010; if it is only a mediocre year prices will relate back to 2017 – either way the Collector and all points in the distribution chain will scrabble to make money

    I cannot see this changing until the great Chateaux have to sell at cost or worse – that will need much more than a few huffs and puffs from the market place.

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