Bordeaux 2016: the problem with Montrose

Château Montrose capped off an eventful day of en primeur activity yesterday with a spectacularly well-judged release – there was just one problem, there wasn’t enough of it.

Following in the footstep of fellow Saint Estèphe estate Cos d’Estournel, Montrose opted to release its 2016 at exactly the same price as its 2015 – €102 per bottle ex-négociant – which with the exchange rate made it 6.3% more expensive than last year at £1,212 a case.

On the other hand, it is a far superior wine to the 2015, a year in which the northern Médoc appellation struggled with huge thunderstorms and rainfall right before harvest.

In 2016 Saint Estèphe has excelled and Neal Martin gave Montrose a score of 97-99, calling it “disarmingly and hauntingly beautiful”.

Analysed through the Liv-ex fair value method, Montrose was deemed a “compelling opportunity”, sitting well below the trend line.

Only the 2005 offers anything that might be considered ‘more’ attractive from a strict price point of view. With the same Wine Advocate scores it is £17 cheaper but buyers of Montrose and for those looking to pick up an excellent wine in 2016, Montrose is right on the money.

The wine was quickly picked up by merchants and sold well. Responding to the drinks business the only problem picked out by Will Hargrove of Corney & Barrow and Tom Jenkins of Justerini & Brooks was that there wasn’t enough of it.

“[The] Price is great, the only problem is we can’t buy enough. Looks like the château made a tiny release,” said Jenkins.

“We could sell a lot more than we can get and given that nobody can do anything about exchange rates the same price as last year is to be applauded – hopefully more and more people will follow that lead…” commented Hargrove.

It may seem like a nice problem to have but there is a real issue with a limited release of this kind. Clearly, and this has been demonstrated with a few other wines this campaign, the appetite for the right wines is there despite the unfavourable exchange rate. By releasing so little onto the market when the demand is there, Montrose is stopping the trade from making potentially many thousands of euros/pounds in further business because it has misjudged (wilfully or otherwise) the level of demand. The château must have known that not increasing the price on its 2015 would be favourably received or it would not have done it. Why therefore it limited its release is something of a mystery. Perhaps there will be a second tranche at a later date in this campaign but at that point it may very well be competing with releases from the first growths or Saint Emilion cru classés etc and buyers may not be as interested.

Buying windows in en primeur are short and sharp, once a wine has done the rounds that’s generally it, although there may be some time afterwards for stragglers to pick up bits and pieces. Montrose has had its shot for now and it went well but its small tranche means the turnover achieved was not all it could have been and this sort of missed opportunity for revenue is precisely the cause of the apathy which dogs much of the en primeur process today – as Liv-ex laid out a few months ago in its Bordeaux report.

There has been much talk recently of how châteaux may react to the recent and devastating frosts that hit Bordeaux, that more wines might be held back and prices might rise. This may happen in other parts of the region but certainly should not be happening in Pauillac and Saint Estèphe which were largely untouched by the freeze.

Montrose’s second wine, La Dame du Montrose, also came out yesterday at €26.40 a bottle – £312 a dozen.

Montrose aside there will no doubt be differing opinions on the correctness and success of some of yesterday’s other releases, all of which chose to raise their prices on the 2015s.

After an initial rush in the morning, Duhart Milon sneaked out at the same time, priced at €55 a bottle ex-négoce, a 12.5% increase on the 2015. The wine was well-scored, Martin giving it 92-94 and Jancis Robinson MW 17+. The notes from both suggest it is a tightly-wound, classic, if slightly conservative wine – though a “step-up” from the 2015.

Reasonably expensive at £640 a case, only the 2008 would provide a possible alternative and even then, at £625 a case the savings are not drastic.

There has been a renewed bout of activity this morning as well with a few big(ish) name releases, including Clos du Marquis.

The ‘Not-Second-Wine of-Léoville-Las-Cases’ was out at €39.60 ex-négociant, a 10% rise on the 2015. At £470 a dozen it is the most expensive wine from the estate from all recent back vintages – indeed one has to go back to 2000 before finding a wine costing more.

It might be a tough ask for buyers but it also has he best critical scores of any wine back to 2005 – 93-95 from Martin (who called it “majestic”), a 17 from Robinson, 94-95 from James Suckling etc. Highest price and yet highest score, only the buyer can decide what matters more to them.

Also out today of note was third growth La Lagune at €35.40 ex-négociant, a 9.2% increase on the 2015.

One Response to “Bordeaux 2016: the problem with Montrose”

  1. Paolo says:

    Surely Montrose’s thinking is quite obvious? After all this hardly the first wine with great reviews to release a tiny first tranche. The first growths do it every year.

    But this is how Montrose think it will go:

    1. Release tiny amount at reasonable price.
    2. Demand is stoked but supply is not there
    3. Wait
    4. Sell remainder at higher price. Trebles all round!

    Possibly with 2 or 3 tranches in total. Of course what actually happens is:

    1. Release tiny amount at reasonable price.
    2. Demand is stoked but supply is not there
    3. Wait
    4. Release remainder at higher price – which few actual customers will buy but negociants will have to take on pain of losing future allocations.

    Et voila!

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