Other estates must not follow Lafite’s lead

Other estates must not think they can get away with cutting 2011 prices as little as Lafite, leading merchants have warned.

What price 2011 Bordeaux?

With the 2011 en primeur campaign poised to begin in earnest, Justerini & Brooks’ Bordeaux buyer Tom Jenkins told the drinks business that “what works for Lafite may not work for others”.

Jenkins said that for customers to buy this vintage, it was essential that the wines were “correctly priced”.

With a cut of 30% to €420 p/b, Lafite still released over 200% above its 2008 release price but Jenkins noted that Lafite was able to operate on a very different level to its neighbours.

He thought that the château’s price was “sensible” and was glad that prices had come down but warned that other growths would have to be looking at below €300 a bottle to find buyers.

He said: “I applaud Lafite for its price but it is almost unfortunate that it has come out first. Hopefully ego will not get in the way of common sense. If other châteaux release at that price it could put a stop to the campaign.

“The other classed growths shouldn’t feel that they can price against Lafite. If Mouton comes out at over €400 a bottle for example I can’t see people buying it.

“Customers will buy this vintage if it’s priced correctly. The châteaux need to slash their prices. There are lots of very good wines from 2011 but for us to recommend them to our clients they have to offer good value.”

His views echo fears that, despite the promise of falling prices, 2011 will still be priced too high.

Simon Davies, head of marketing at Fine+Rare, spoke to db from Bordeaux and agreed that “it would look expensive” if the other first growths came out as high as Lafite.

Liv-ex has calculated that based on Lafite’s release price, the other first growths should come down by as much as 60% on their 2010 prices – bearing in mind that in 2010 both Latour and Haut-Brion released higher than their fellow first growths at €780 and €660 p/b respectively.

If they did lower their prices the recommended amount, however, the four remaining firsts would be realeasing between €173 and €243 ex-château and €216 and €320 p/b ex-negociant.

However, Davies reported that there appears to be very little hurry from the top châteaux to release and he predicted that it was unlikely another first would come out before May.

Out today are Cos d’Estournel at €108 p/b, which is down 45% on 2010 but still up 66% on 2008 and also its second wine Pagodes at €30 p/b, a 25% drop on 2010 but up 52% on 2008’s €19.75 . Gazin also released at €42, down 12.5% on 2010 and again up on 2008 by 46%.

 

3 Responses to “Other estates must not follow Lafite’s lead”

  1. martin says:

    When talking prices it would I think be particularly handy if you could show a comparison to the price of back vintages NOW not just at their release, it is I think a significantly more useful number.

    • Rupert Millar says:

      Martin
      I (or we) will be doing some comparisons with actual prices as the campaign goes on and it becomes more possible to compare relative values of 2011 and other physical vintages such as 08, 06 and 04.

      In the meantime, food for thought, Cos’s price today (around £1,200 a case) makes it more expensive than 08, 07, 06, 04, 02 and 01, whereas 2011 Lafite is actually the cheapest Lafite out there.

      To maintain value the smaller châteaux are going to have to cut big time as their prices were able to rise so far in 09 and 10.

      Rupert

  2. TC says:

    One thing to remember is that the majority of the Lafite (and most of the other first growths) sold last year were sold in the second and sometimes third tranches. Lafite is rumored to be contemplating only one tranche this year, meaning that the drop versus the “blended” 2010 price is far larger than cited above. In addition, per the above commentary, when viewed in the context of current prices for the recent vintages, Lafite actually looks a bargain, being cheaper than all current physical vintages. Cos, on the other hand, really missed the boat this year – probably too high a price by a good EUR30 / btl or more. It’s a little surprising given JGP’s pre-campaign comments re: heeding the message from last year’s over-priced and over-extended campaign.

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