A modest proposal for Bordeaux – release the 2019s next springBy Rupert Millar
With the world in the grip of a pandemic and with social and economic disruption spreading across multiple countries, now is the time for a radical shake up of the Bordeaux en primeur system and for the châteaux to offer their 2019 wines next spring and create a new template for the whole futures process.
This article contends that the sales window for selling the 2019 futures this year is precarious and diminishing and ppetite for a high-priced vintage which 2019 is likely to be is negligible. And yet this moment also presents a unique chance to utterly reform en primeur for the better by waiting a year and then presenting wines that are at the end of their élevage and ready to bottle.
The arrival of Covid-19 has thrown the world into turmoil with much of Europe either in or going into quarantine/lockdown to contain the spread of the virus while governments issue financial aid packages unprecedented in peacetime conditions.
In the wine trade events both large and small have been outright cancelled this year or postponed to later dates when – it is hoped at least – the pandemic will be largely over.
Among the events disrupted has been the annual en primeur tastings in Bordeaux, with the Union des Grands Crus de Bordeaux cancelling its programme and many individual châteaux announcing they would not be accepting visitors as a precaution. Latour also shelved its planned release of the 2012 grand vin, pushing it back to the autumn.
France’s president, Emmanuel Macron, then placed the country into lockdown this week and all travel into the country by non-French citizens is currently prohibited with the EU closing its borders too which has put a very definitive final stamp on the whole situation.
The UK and other countries worldwide are also going into lockdown with populations advised to self-isolate and work from home and with disruption likely until May at the very least.
There is no doubt that an economic fallout from the pandemic is likely – though hopefully neither too deep nor prolonged (but who can say?).
There is a question mark, therefore, over this year’s offering of the next vintage from Bordeaux. Will it go ahead? Can it go ahead? Should it go ahead? And is there a better option?
It is often asked before a futures campaign what the appetite will be for the wines and this is especially pertinent this year, especially considering there is already an economic slowdown in mainland China, recession in Hong Kong and the Trump tariffs and Brexit on top of the coronavirus outbreak. And then there is the dilemma of when there might be chance to actually offer these wines this year.
Let’s examine each in turn.
The headwinds against fine wine were blowing strongly as last year ended, for the reasons outlined just above (recession, tariffs etc).
This year, so far, has not provided anything to increase confidence in global markets though Liv-ex reported this week that fine wine is holding up (for now) and the various other global concerns have rather receded into the distant background given the wider health problems the world faces.
But that won’t last forever. This pandemic will be brought under control and underlying economic and commercial problems will resurface with the added possibility of at least an economic knock if not an outright recession because of Covid-19.
The 2019s are, according to early, whispered reports, very good wines (“all the panache of a great vintage” Phélan-Segur said in a recent vintage report), better even than the 2018s which were supposedly super (though the jury is a little split on that one).
If the reports are true then these are not wines that are likely to be offered below 2018 prices.
Last year’s en primeur campaign was not a disaster but nor was it a roaring success. The wines appeared, buyers often shrugged. This is not at all the time to present another new, high-priced Bordeaux vintage to the market.
As well as the macro global situation the micro en primeur one has its own long-running problems; too many good vintages, often priced ambitiously, being released onto a market that is bloated and awash with good vintages and prices failing to appreciate post-campaign.
The entire bent of the market is entirely set against a high-priced Bordeaux release late this spring/summer.
When this year?
Normally, tastings for the new vintage would take place at the end of this month and early April. Scores and reports would emerge at the end of April and into early May and the first wines, bar the odd wild outlier, would start to trickle out in late May with trading properly happening in June and all wrapped up by July. All in all you have five months of Bordeaux-focused discussion and selling, something entirely unique in the world of fine wine. It’s no wonder it causes such jealousy.
In a normal world the Bordelais would not want to release the 2019 wines until the trade has tasted them and formulated an opinion but when can this happen?
France is currently in lockdown and the UK is rapidly following suit. When exactly both countries – and indeed other western countries that constitute en primeur’s primary markets – will be fully released from this limbo is unclear at present.
There may still be a hope that confinement will be over by May allowing tastings to take place in that month and with a campaign in June/July.
That though is shrinking five months down to three (tops) and might by necessity mean a quick campaign potentially limited to only a few key estates. This is hardly satisfactory.
Furthermore, this timeframe is not the gift for Bordeaux to give, as Liv-ex director Justin Gibbs, noted.
When individual countries finish their periods of confinement is unlikely to coincide exactly with others and, most importantly, after weeks of isolation how likely is it that both the trade and their customers are going to leap into a campaign at all rather than, say, go on holiday?
En primeur is a big creator of revenue for the fine wine trade but it won’t fulfil that function satisfactorily if it is small and rushed in a less than ideal economic climate.
The question of timings, therefore, remains unanswered.
It is out of the question that a campaign could continue into August. The May and June period is already highly disrupted normally due to various bank holidays in France and the UK and August is the traditional holiday month when people are going to start drifting away from their desks (if they haven’t already by late July). Again, if en primeur is being looked at as a vital trading period, a long, lingering campaign dragged out over the summer is a waste of everyone’s time and effort.
The other option is the autumn; to try and get the tastings and then campaign going in September and run into the start of Christmas.
This is bad for two reasons:
- One: September is new releases month for a raft of fine wine labels from Italy and the New World through La Place de Bordeaux which means huge competition for the 2019 wines which they wouldn’t have at another time. It’d be release and information overload and when that happens (as we’ve seen in the past) most don’t get sold so it would be a huge missed sales opportunity.
- Secondly: much the same with a rushed summer campaign, few if any merchants or their customers want to be laying down their money and selling/buying Bordeaux futures in the run up to Christmas when there are other expenditures and sales opportunities to contend with.
Finally, recent reports suggest a second wave of Covid-19 cases is currently appearing across Asia just as they appeared to be over the worst which only demonstrates that no apparent respite should be taken for granted. Late spring and early summer are not guaranteed.
The window for a dedicated en primeur for the 2019s this year is uncertain and narrow at best.
With a market in the dumps, little obvious appetite for expensive primeur wines and an uncertain and less than perfect sales window this year, the best option for Bordeaux is to keep the 2019s in barrel (where they are going to be anyway) and offer them next spring at the end of their élevage and make this the established norm for new Bordeaux offers.
This is a chance for a radical shake-up of the entire en primeur system. By skipping a campaign this year, the châteaux have a chance to offer wines that are ready to be bottled instead of almost new as the system works now. Offer the 2019s in 2021, the 2020 wines in 2022 and so on.
This has advantages for the image of en primeur:
- There have been calls for years for a move of this sort, which both en primeur’s critics and also supporters point out would allow for a proper evaluation of a vintage and wines that have been fully vinified.
- It would also help end the speculation and claims that samples offered at en primeur tastings are clever little blends prepared for certain critics rather than the ‘real’ thing, making the process completely transparent which can only be a positive.
With regards the 2019 vintage in general the advantages are:
- If this really is a great vintage, then it deserves a great campaign and the chance to shine.
- Delaying for a year would allow for an improvement in the global economic situation (not a guarantee of course but certainly a possibility) and sharpen the appetite for the vintage among collectors, making them more interested and amenable to talk of a ‘great vintage’.
- Both collectors and merchants, having not bought any new Bordeaux this year, would then have a full war chest to unleash on the 2019s next year, providing a real marquee event that could be a huge cash windfall and a real driver of turnover for all the moving cogs in the primeur process.
Moving the campaign to next year is not without its issues of course. For merchants (in the UK but elsewhere too) it means missing out on an important source of revenue which is worth, potentially, several millions of pounds for each enterprise. Berry Bros & Rudd makes £20 million a year on average from en primeur sales though it’s not as big for others.
Many merchants db has contacted have been broadly supportive of the idea, however. En primeur is no longer quite the mainstay of their businesses it once was, they have limited a lot of their primeur activity after a series of disappointing campaigns and they have diversified their offerings to compensate. A missed campaign would be annoying but not lethally detrimental to the health of most merchants.
The other major affected party would be the middle men, the négociants. Many are reliant on the banks at the moment and en primeur represents a much bigger chunk of their annual turnover than it does for merchants, 30% to 50% at least.
Skipping a campaign would be a potentially heavy financial burden for some of them but would it be much more so than having to invest in expensive 2019 wines that then don’t sell and have to sit on their books like so many other wines already do?
The négoce have, like the merchants, diversified their offerings in recent years to make up for the shortfalls poor-performing futures campaigns have created – all the Super Tuscans, South American and Napa wines they sell in September for example. And they have Bordeaux stock to sell. They might have to sell it cheap but this is already a buyer’s market and at least it’s ready cash.
In short; the potential advantages of skipping a year and resetting in 2021 are manifold. Château owner and Bordeaux commentator Gavin Quinney raised this topic in discussion with db and made the point that: “It’s not like fashion outlets currently offering spring collections that they won’t be able to this autumn”. The 2019s are spending this winter in barrel anyway, it won’t do them any harm – quite the opposite in fact.
Collectively, as he also pointed out, the Bordelais have spent tens of millions of euros on new chais in recent years. They haven’t done so for no reason. Great wine may be made in the vineyard but it is finished in the winery. The Bordelais are masters of élevage and en primeur would be much improved if it were based, rooted indeed, in this proof rather than projections as is currently the case.
The big châteaux themselves are surely fiscally secure enough to last a year without a campaign and if they’re not then a) they are in trouble and b) isn’t it lucky they have been hoarding (sorry, ‘holding back’) so much stock from past vintages to provide them with a source of revenue?
To press ahead and try and sell the 2019s this year is to consign the campaign to failure and the wines to history as yet another victim of chronic short-sightedness from a stuffy system unable to adapt.
Selling the 2019s next spring and beginning to assess finished wines from then on would be a bold, innovative and forward-thinking step for Bordeaux and the en primeur process as a whole.
Yes it is disruptive and there is the possibility of short-term financial repercussions but in securing a future for the en primeur system in a stronger, more transparent and superior form it is decisive.