En Primeur Wines, Stronger and maybe Cheaper?


barrels.pngWith the En Primeur week just ending, Bordeaux 2008 has turned out to be a surprisingly stronger vintage than most thought it would be. Many wine experts believe that the Right Bank has been especially strong with good structure and tannins suggesting a lot of potential for aging. Shiv Singh comments on the En Primeur.

On the Left Bank, the only standout appears to be Chateau Latour. The overall winners though seem to be Sauternes and the Graves (including Pessac-Léognan) closely followed by Saint-Emilion and Pauillac.
Needless to say, it is the economic climate that is overshadowing the En Primeur more than the physical climate. The September weather in fact saved Bordeaux once more. Having attended the En Primeur’s twice before I know how everything comes down to the weather and the last few weeks really saved the day again. Given how much damage the global economy is doing to wine, this was a much needed reprieve for the producers.
But it still leaves the producers and the brokers in a difficult position as they’re holding onto a lot of 2007 inventory at a time when they’re being asked to put a price to the 2008s. Prices for the 2008s are bound to come in lower especially at the higher end of the market which in a typical year would have the most inflated prices. Industry reports have it that the prices maybe dramatically lower.
Decanter Magazine reported that some negociants are demanding a 20-40% decrease in prices for the 2008s. They recognize that they must take on the wines but worry that the banks aren’t going to finance their purchases as they have in the past. With so much excess inventory lying around, the banks will be hard pressed to support the brokers this year.
‘Most negociants can’t buy [the 2008s]without selling [the 2007s],’ said Ronan Tremelot, export director of Cordier Mestrezat Grands Crus.
‘The banks won’t finance us if we can’t then sell the wines or even tell them when there’s any likelihood of the market picking up. But there’s no point in the chateaux keeping the price of the 2008s high just to protect the 2007s. We’ll have to take a loss on the 2007s.’
Pierre Lurton of Chateau Cheval Blanc told Decanter magazine that their price would come down ‘considerably.’ And Chateau Margaux managing director Paul Pontallier, when asked if there was a possibility that first growth prices would be as low as suggested, did not rule it out.
Putting the pieces together, this certainly does sound like a good year to buy En Primeur. As mentioned, prices will be lower largely because of the 2007 inventory and the economic climate while the wines themselves look promising. Ironically, it could turn out to be an excellent year for consumers if they choose the wines carefully and jump in early. Watch this space for more as the expert reports on the En Primeur come in over the next few days.
More on En Primeur:

Bordeaux En Primeur Moving Forward. Some question timing
En Primeur wines finally made more accessible
The 2007 En Primeur Season. An Introduction
The 2006 Bordeaux En Primeur Season, the last word

1 Comment

  1. A good and informative piece, but I’d take issue with the suggestion that this “certainly looks like a good year to buy en primeur”. First, there are plenty of reasons to question almost ANY en primeur buying. Peter Lunzer’s highly successful wine investment fund revealingly makes very little use of buying in this way. Wines and vintages that show significant rises in value in the years following their en primeur sale are the exceptions to the rule. Second, in the current financial climate, with hedge funds and newly-redundant individuals likely to offload desirable 2005, 2003 and 2003 wines for ready cash, I’d ask why anyone needs to buy 2008s – however unexpectedly good they may be – right now. My advice, unless you have money to burn, would be to wait and watch…

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