Berry’s predicts primeurs flop if prices rise
Whatever the quality of 2014 Bordeaux, if the prices go up, then Berry Bros & Rudd won’t promote it, warns the merchant’s fine wine buying director.
As reports from last week’s en primeur tastings in Bordeaux confirm that the region has produced a good, if not outstanding vintage, Max Lalondrelle, fine wine buying director for Berry Bros & Rudd confirms a latent demand for cru classé Bordeaux among his customers, but only at the right price.
“If the prices do go up we will buy very little, and we will only offer the wine on the taste, but we won’t encourage the consumer to buy, and that is the danger,” he told the drinks business.
While he recorded that a Berry’s primeur campaign for a good vintage raises around £20 million in turnover for the merchant, the 2013 Bordeaux release last year only sold £6m.
“If 2014’s prices are the same or higher [as 2013], then we will be in the same situation as last year, and we will struggle to find an argument to buy,” he stated.
On the other hand, should prices see even a small decline, when combined with the impact of a cheaper euro versus the pound, UK buyers will be tempted to buy the wines en primeur.
“I think our customers should be interested this year,” said Lalondrelle.
“There is a young customer base that has arrived in the last five years who haven’t bought Bordeaux, and if we tell them to fill their boots because it is a great wine at a great price then there is the energy to buy the vintage,” he assured db.
Continuing, he stated, “They will be behind us, if we are behind it.”
Of course, it’s in the interest of the merchants – who generally factor in around a 10% margin on each en primeur sale – to have a successful campaign.
“The trade has not done a big campaign for several years now so we are all eager to get our hands on some sales… everyone is happy to work at it, but it is very dependent on the pricing,” admitted Lalondrelle.
Meanwhile, the Bordeaux négociants, many of whom have not sold on their 2013 vintage allocation – also crave a bounce back for en primeur demand.
“The banks are preventing a lot of négociants from falling over a cliff… I believe 2-3 négociants are due to collapse and around 10 are bordering on bankruptcy,” he said.
“The châteaux need to take that into account – no-one can finance another [unsold] vintage; the négociants cannot buy it, and if it’s not a good deal, we [the merchants] won’t buy it.”
While acknowledging the efficacy of the Bordeaux en primuer system, which sees the wine sold worldwide by négociants before it is even bottled, Lalondrelle stressed that the successful operation of the system required all parts of the chain to be profitable.
“The en primeur system is the best distribution system in the world for anything, there is nothing else that is manufactured and then sold across the world in just two hours, but to work, everyone along the network has to make money.”
As previously reported by db, highly-influential wine critic and en primeur Bordeaux specialist Robert Parker has already suggested that en primeur is “largely dead” for all but the greatest vintages.