By ERIC PFANNER
Published: Apr
PAUILLAC, France — As they have every April for decades, wine merchants
from around the world donned their tweed jackets, tucked in their pocket
squares and descended on Bordeaux this week to assess the latest
vintage. In visits to revered chateaus in localities like Pomerol,
Margaux and Saint-Estèphe, they swirled, sniffed, spat and scored the
2012 Bordeaux.
Nicolas Tucat/Agence France-Presse — Getty Images
The quaint French village of Saint-Emilion.
But this year one of the biggest names, Château Latour, will not be available when the other 2012 wines go on sale
in the coming weeks. Anyone who wants the 2012 Latour will have to wait
years, thanks to a decision by the chateau’s owner, the French
billionaire François Pinault, to withhold the wine from the annual sale of Bordeaux futures.
The move reflects broader trends that are shaking up the clubby wine
industry of Bordeaux, the largest producer of high-quality wines in the
world, and stirring tensions between the people who produce the wine and
those who sell it to affluent clients across the globe. Each side
accuses the other of greed; hundreds of millions of dollars are at
stake.
“If you do anything that goes against what’s been traditionally done in
Bordeaux, it’s controversial,” said Stephen Browett, chairman of Farr
Vintners, a wine merchant in Britain that specializes in Bordeaux. “When
it’s one of the richest men in France that is thinking outside the box,
it’s doubly controversial.”
Mr. Pinault is used to getting his way. For more than two years he
battled his main rival in the French luxury goods business — Bernard
Arnault, the chief executive of LVMH Moët Hennessy Louis Vuitton — for
control of the fashion house Gucci, eventually prevailing in 2001. Other
holdings, via companies his family controls, include Yves Saint
Laurent, the auction house Christie’s and the Palazzo Grassi in Venice.
Mr. Pinault has owned Château Latour for two decades. But that still
makes him a relative newcomer to Bordeaux, where the old money frowns on
the ostentatious tastes of men like Mr. Pinault and his son,
François-Henri, who now runs the family holding company, Artemis, and
who is married to the actress Salma Hayek.
For as long as anyone here can remember — at least three centuries, some
say — the high-end wines of the region have been sold via local
intermediaries, called négociants, rather than directly by the chateaus.
The négociants sell the wine to merchants, distributors and importers
in the spring after the harvest, while the wine is still in barrels,
through a futures market
called en primeur. Elsewhere, wine producers generally sell directly to
distributors, importers or private clients, without the added layer of
négociants.
Many chateau owners and négociants say the system benefits both sides.
Chateaus get the upfront revenue they need to invest in the production
of the next vintage. The négociants whip up interest
in the new vintage, and their marketing prowess has helped Bordeaux
beat its rivals into new markets like China, now the biggest importer of
the region’s wines.
In return, the middlemen get up to 15 percent of the wholesale price of
the wine — not bad when a bottle of Château Latour sells for around 300
euros (nearly $400) in a mediocre vintage, much more in a great one.
“The négociant system has survived the Revolution, two world wars, the Great Depression
and phylloxera,” said Patrick Bernard, who runs one of the biggest
firms, Millésima, referring to the insect pest that ravaged the
vineyards of Europe in the late 19th and early 20th centuries. “The
economy of Bordeaux is based on en primeur. If you break this, you break
the Bordeaux wine economy.”
But chateau owners complain that they have not been getting their fair
share of the gains from a recent surge in global demand for high-end
Bordeaux. In vintages like 2005 and 2008, the price of many wines
doubled or tripled after the initial sales, and much of the profit went
to wine merchants and other customers, not the chateaus.
More and more chateaus have been sold by longtime family owners to
corporations or to tycoons like Mr. Pinault, whose family has an
estimated worth of $15 billion, according to Forbes
magazine. Mr. Arnault, for example, has snapped up two other famed
Bordeaux properties, Cheval Blanc and d’Yquem. Proprietors with such
deep pockets do not need to worry about how to pay for the corks,
bottles and labels for the next year’s wine, so they can do without the
revenue from the early sales.
Page 2 of 2)
While a few chateaus had previously pulled out of the traditional
system, the move by Château Latour, announced last year but effective
with the current vintage, was the most direct attack yet. Latour, one of
the five so-called first growths of Bordeaux — the top wines in an
official classification that dates back to 1855 — is coveted like few
other wines.
Jean-Pierre Muller/Agence France-Presse — Getty Images
Winemakers open their 2012 bottles for tasting by
6,000 wine merchants who gather at this time each year.
Château Latour said that instead of selling early, it would keep
vintages until it deemed them ready to drink, and price them
accordingly. Over the winter, it followed up by announcing that instead
of providing the 2012 vintage for sale this spring, it would offer
remaining bottles of the 1995 Latour.
Frédéric Engerer, the director of Château Latour, says his complaint is
not about the intermediaries — the ‘95 Latour is being sold through them
— or about money. The problem, he says, is that the system encourages
people to drink Latour, which benefits from a decade or two of aging,
too early.
After buying in the futures market,
customers take delivery of the wines as soon as they are bottled,
usually about a year and a half later, making it tempting to pop a cork
or two before the wine is ready. Furthermore, many bottles of Latour
have been changing hands often as speculators seek to make a quick
profit, so the wine may not be stored in optimal conditions.
In some other wine regions, like Champagne, Mr. Engerer noted, producers keep the wine in their cellars until it is mature — so why not Bordeaux?
“We want to provide our wines to our customers at the best moment and
with best possible quality,” he said in an e-mail. “This makes all the
more sense for Latour, which is one of the longest-aging wines of
Bordeaux.”
His argument, however, did not go down well with Mr. Bernard of
Millésima. Last month, as the tasting season approached, Millésima
announced that it would no longer sell Château Latour, leaving a void in
his portfolio alongside the other first growths — Margaux, Haut-Brion,
Lafite Rothschild and Mouton-Rothschild. Several other négociants
followed suit, though most have tried to keep their heads down.
Mr. Bernard says the real problem is that chateau owners have become
unrealistic in their pricing expectations since the 2009 vintage, widely
hailed as one of the best ever. The 2009s sold well, even though some
chateaus tripled or quadrupled their prices.
But subsequent vintages have drawn less interest. Now Mr. Bernard — and he is not alone — is urging chateau owners to cut prices sharply for the 2012 wines.
In 2011, the first growths were released at an average wholesale price
of 350 euros a bottle during early sales — down from 500 euros for 2010
and 450 euros for 2009, but still up sharply from 100 euros for the
2008. Even the Chinese, eager buyers of the 2009 vintage, mostly said no
thanks.
Mr. Bernard says a price of less than 200 euros would be appropriate for
the 2012 wines, given the uneven quality of the vintage and the
uncertainties in the global economy.
His view was seconded by Robert Parker, the prominent American wine critic, who wrote on Twitter: “Prices need to fall dramatically to reignite some market interest.”
For chateaus, pricing Bordeaux is always a complicated game with many
variables: négociants, consumers, the quality of the vintage and the
economy. The ordinary laws of supply and demand do not always hold sway.
Many chateau owners say the traditional system still makes sense, but
all are watching closely to see how Latour fares.
“People have been saying for 30 years that en primeur is dead,” said one
chateau owner, speaking on condition of anonymity to protect business
relationships. “It’s true that nothing you learned in business school
applies here. But en primeur keeps going.”
No comments:
Post a Comment