En Primeur: A Rare Show of Dissent (and Be Careful What You Tweet)

One Bordeaux story that flew around the internet this month was a Bordeaux negociant’s public refusal to buy a top Chateau’s 2010 because the price was ‘ludicrous’. At that price the wine ‘deserved to tank in the market’, I tweeted. So guess who I sat next to at a black-tie dinner, given by the leading Châteaux, two days later?

Let me explain.

img_0570_3Adam Lechmere’s article on Decanter.com on 16th June, entitled ‘Negociant boycotts ‘ludicrous’ Rauzan Ségla‘ caused quite a stir. As well as far more comments than usual for an article on Decanter, Tim Atkin MW wrote a post on his blog, as did Oliver Styles.

The Place de Bordeaux is a trading environment that usually operates behind closed doors, whereby top Châteaux sell their wines, as futures mostly, to a band of Bordeaux middlemen – via courtiers, or brokers – who then sell on to importers around the world, who in turn sell to private buyers. The Bordeaux negociants provide the financial buffer between the producer and the market. With a vintage like 2010, with prices at an all-time high, and with demand mixed as a result, they’re having their work and resources cut out.

For Barrière Frères to refuse their allocation of Rauzan-Ségla was one thing, to email their customers to say that the 40% increase, from €60 to €84 a bottle, was ‘ludicrous’ was quite another. (The email can be seen here on Cellarblog.) A copy was swiftly obtained by Decanter, who then contacted John Kolasa, the MD of Rauzan-Ségla. I then tweeted his quote, taken from the Decanter article:

“Rauzan-Ségla MD on ‘a bit annoyed myself that prices are so high but as the representative of the owners I’ve had to follow the line’.”

It was clear from the twittersphere that the price increase wasn’t going down well. @jeanniecholee – the influential Asian Master of Wine – launched a new book at the Bordeaux Wine Bureau, or CVIB, that evening. “Buzz tonight was how Rauzan Segla tanked in the market. With prices >40% vs 09, not even negociants wd touch it. Very jittery market this yr” she tweeted.

The following morning, on Friday, I sent this tweet:

“With this from MD: “annoyed myself that prices are so high but… I’ve had to follow the line’, didn’t Rauzan-Segla deserve to tank?”

Soon after, intrigued by his outburst, I called Laurent Ehrmann, the MD of Barrière Frères and the man who had signed the email. “We all have the same routines in our lives – we take a shower, we go to work and so on – but this was a wake-up call,” he said.”I saw this in front of me and I thought ‘Hold one second. Take a look at this. I do not want to pollute our customers’ time with this offer’.” It’s fair to say that Laurent can be quite outspoken. More on that conversation – regarding his role as a negociant – another time.

img_1274The bizarre thing was that two days later, I had been invited to a very grand dinner at Château Haut-Brion, at the start of Vinexpo. Each of the 35 tables of ten was hosted by senior representatives from two leading Châteaux. As I approached the table, I spotted the name on the place setting, right next to me: John Kolasa, the Managing Director of Château Rauzan-Ségla. Oops.

I’ve met John before on several occasions, and he’s a nice guy, so conversation came easily. There was much to talk about, what with the ups and downs (mostly ups, in price terms) of the primeur campaign still dragging on. A Scotsman, he’s also a negociant in his own right with Ulysses Cazabonne, working there for the same owners as Rauzan-Ségla, the Wertheimer family of Chanel. His first full vintage in charge of Rauzan-Ségla was the 1995.

“Are you on Twitter?” I enquired gently, as we talked about the internet in relation to the campaign.”Oh, I don’t have time for that” he replied. Thank feck for that, I thought.

We talked about the price of the 2010s generally, and how he’d arrived at the price for Rauzan-Ségla. As he had told Decanter, prices were too high, and he wanted to offer his 2010 for less than the 2009. The owners were bullish though, especially given a 97-98 point score from James Suckling, the American critic. ‘But what about Parker’s 92-94?’ I asked. ‘He marked us down’, he said. I replied that Parker was a little bit light perhaps, as I’d given the wine 93-95. We didn’t split hairs for long. (Oh, in case you’re thinking, ‘how silly to talk about scores’, you’re right – but when it comes to selling Bordeaux en primeur, they matter.)

I surmised that John’s quote to Decanter might have been more accurate if he’d said ‘I’m a bit annoyed myself that prices are so high but as the representative of the owners I’ve had to follow the(ir) line’. Not that he’s paid to say things like that.

In any case, by Friday afternoon, John had sold a third of the allocation they’d put out for sale en primeur. Once again, the role of the critics – assessing wines before prices are released – should be questioned.

Anyway, I’ll carry on tweeting, despite this close call. Robert Parker said yesterday on Twitter:

“2010 Bordeaux futures prices for the famous chateaux look ridiculously high-a fool’s game to throw money at these wines(a top vintage)”

To which I replied

@RobertMParkerJr You can fix this. Will you agree, next year, not to publish your scores until prices are out?

This is sent to friends on our mailing list.

11 thoughts on “En Primeur: A Rare Show of Dissent (and Be Careful What You Tweet)

  1. Jacko

    Hi Gav….all very interesting reading and I absolutely concur that if Rauzan~Segla didn't crash the momentum of the 2010s, then Smith~Haut~Lafite at €77 (€75 the next morning as negotiants scrambled to unload unwanted and overpriced inventory!) sure let the wind out of the campaign. Albeit a very small representation of the market, Jascots' EP buyers bought carefully up to that point with many buying wines to enjoy themselves but investors and speculators just not being up-fer-it at all this year with the exception, quite rightly, of Pontet~Canet and Lynch Bages and then the brick wall went up.

    Crystal Ball gazing it may be, but, the question must be asked about to where will the 2011s go next year? A third-in-a-row mega-vintage will be greeted with utter disdain and a poor vintage will not sell unless at more than -50% off the price of this vintage….unless China keeps propping the market up.

    I think that many of the Chateaux owners have set themselves up for a short-sighted gain that, in some instances, has failed to meterialize and next year they will have a serious problem.

    I remember Clos du Marquis 1997 selling at -50% in 2001 from where it was launched in 1998 and can't you see that happening with the overpriced, non-trophy 2010s?!

    It's bonkers, really!

    Good luck to Bauduc and love to you and the family,

    Jacko

    1. Gavin Post author

      Thanks Jacko. Who knows what will happen for 2011. Let's see how the vintage unfolds. My guess is that prices will take a tumble for the 2011s, and some, but to quote Lilian Barton – and she and I have had a few laughs about this quote of hers from last September – 'However the 2010s turn out, they'll be cheaper than the 2009s'.

  2. Winerackd

    Probably due to naivety, I cannot comprehend why a concerted effort by a relatively small number of journalists and critics cannot introduce wholesale change into the primeur system, prices and scores.

    1. Gavin Post author

      Thanks, Daniel (winerackd). I agree, although without Parker joining the effort, I'm not sure it'll be worth it. However, I have tweeted him, so it's a start. Jancis Robinson started the ball rolling this year, and I think the idea can gather further momentum next spring.

  3. Woody

    Gavin – I love the blog, and this is a great entry. I'm popping down for the marathon in september, but I am staying at a friends house in entre deux mers – hopefully I'll be able to pop along!

    1. Gavin Post author

      Cheers, Woody. Give us a shout nearer the time in September (gavin@bauduc.com or facebook/twitter etc/0033642329853/or carrier pigeon) and in the meantime, get some practice in.

  4. Keith Hearnden

    Very informative and enlightening, as usual, Gavin. I've long been of the opinion that there are too many bankers' bonuses around for the good of the wine market overall, but this is now complicated by the new strength of the Chinese economy.

    Our local independent wine merchant (est. 1910), current incumbent a personal friend for many decades, has refused to play the Bordeaux game for many years,on the basis that there just isn't any real value for money left among the classed growths. Can I hazard a guess that these elite properties will happily rely ever more on the Far East for sales, where prestige dictates that it is the price that matters, rather than what is in the bottle. A marriage made in boardrooms, where love doesn't figure.

    Many congratulations on Jancis's endorsement of your own wine, all of which pove a constant pleasure.

  5. Paul Nugent

    In some slight tandem with Keith's comment above, these prices have become obscene, almost in a pornographic sense "where love doesn't figure." Still, I love the way you write about this stuff, giving us a peep-hole so to speak.

    Ditto to Keith's congratulations on Jancis' endorsement. I remember over 25 years ago sitting next to her at the first wine-tasting I ever attended. Can't think how I wound up sitting next to her but she could not have been nicer.

  6. WineDineDivas

    Thank you for the informative report Gavin, and we liked your tweet to Parker Jr. Hope that he will think about you next year before he announce his scores.

    Cheers:)

    Judit & Corina