Bordeaux will not die
But it's getting old
For decades, the market has been scrutinizing the price of Bordeaux, and the annual Bordeaux en primeur week has magnified the "price" infinitely, and people are more concerned about whether the price is expensive than whether the wine is good or not.
Every year in April, Bordeaux en primeur is an essential highlight of the wine world. More than 5,000 visitors from around 50 countries will travel to Bordeaux this month to taste the barrel samples of the 2023 vintage, according to the Union des Grands Crus de Bordeaux.
Industry insiders believe that the launch price of Bordeaux 2023 en primeur is unlikely to increase significantly, and more wine merchants believe that the price should fall by about 30% compared with last year.
Although many journalists and wine critics have yet to taste the Bordeaux 2023 vintage, there has been some speculation about the price ahead of the Bordeaux en primeur launch. After analysing the current state of the market in a new report focused on Bordeaux en primeurs, Liv-ex said, "Further price increases are impossible. ”
Liv-ex further pointed out that the reason for this year's lack of bullishness is the waning enthusiasm of high-end wine buyers, the recent underperformance of Bordeaux wines in the secondary market, and the relatively high inventory of premium vintages.
Bordeaux's ability to produce aged and elegant wines in large quantities means buyers have plenty to choose from, the report says. Over the past two decades, there have been several vintages that have been at the same price level, or even lower if they are of the same quality.
Anthony Maxwell, chief commercial officer at Liv-ex, expects the 2023 Bordeaux vintage to be launched at a lower price after a recent visit to Bordeaux.
Wine Lister has a similar sentiment on this issue, noting in a recently released report that the Bordeaux 2022 vintage has been sold at record prices in some cases and "has so far remained stagnant in the secondary market." ”
Despite the widespread belief that it is important to compare the sale price of en primeurs with those of the same vintage, the founding members of Wine Lister have unanimously called for a lower price for Bordeaux's 2023 vintage.
Wine Lister said that after a survey of 50 wine merchants, market participants believe that the launch price of Bordeaux 2023 en primeurs should be reduced by an average of 30% compared to 2022 to stimulate demand to "save" the en primeurs.
Since February 2022, the Liv-ex Bordeaux 500 index, the index that most broadly measures the Bordeaux fine wine market, has fallen by 10.3%. Liv-ex points out that while Bordeaux may still be an "indispensable single appellation for the premium wine market", it has to share the same piece of the pie with a growing number of appellations, which are slowly losing market share.
The number of Bordeaux wines for sale today is more than three times higher than the demand for high-end wines compared to a year ago. After entering the buyer's market, more and more buyers will be "picky" when buying vintages.
Data from the Liv-ex Bordeaux 500 index shows that the 2017, 2018, 2020, 2021 and 2022 vintages all returned negative on average when comparing the sale price of en primeur with the current market price.
Although many wines are still in the pretense of value, the data shows that Château Pavie's 2018 vintage is not doing well. According to Liv-ex, the en primeur price for the wine released in the UK (excluding London) is £3,504 per case (12 bottles), compared to the current price of £2,258, a 36% drop in price.
Of course, not all wineries are seeing their en primeur prices fall, and there are a few wines that have risen in price after they hit the market. According to Liv-ex, the average return of Petus from 2017 to 2021 was as high as 82%, while Château Lafel (67%), Château Lafite (22.9%), Château Rippon (20.8%) and Château Longchuan (20.3%) all returned more than 20%.
There are signs that interest in Bordeaux en primeur is waning on a sustained basis. As a result, some wineries keep a larger percentage of their stock for later release. The report highlights that many wineries are gradually reducing their en primeur offerings in favor of "bringing more mature vintages to market".
For some well-funded wineries, "one foot has been left out of the en primeur system". As early as 2012, Latour officially withdrew from the en primeur market, and since then only wines have been supplied to the market that have been aged in the cellar and reached a drinkable state.
However, many wine merchants are facing huge cash flow problems. It is said that some of these wine merchants are destocking as fast as they can to raise funds to get rid of the pressure of the banks and continue to operate.
Justin Gibbs, co-founder and head of the exchange at Liv-ex, commented that the price of Bordeaux wine is down 14% from its peak, while the cost of production is at a 15-year high.
Looking back at Bordeaux in 2023, it was a good year overall, and generally speaking, the quality of the production will be relatively reduced, but it also depends on the winemaking strategy of the individual château, and it can produce high-quality wines with careful selection.
At the same time, some vineyards have been infested with mould, which has affected the yield of certain varieties, causing winemakers to adjust the proportions of different varieties and resulting in a final product that may differ from the style of the winery.
As a result, many critics believe that the 2023 vintage of Bordeaux en primeur is so different that it is difficult to generalize. It's better to analyze individual vineyards and producers, rather than buying on the basis of reputation alone.