When Bordeaux was broke
Today, the French wine capital might be bustling and prosperous. But just one generation ago, it was a very different story.
Today it seems as though it might almost have been a bad dream, but only a generation ago Bordeaux was destitute – broke, bust.
The Bordeaux wine market had floundered through several bad vintages in the 1960s, and the brief boom that took place in the early ’70s had ended in a complete financial bust.
Moreover, the strong whiff of adulterated wine had turned the mood sour, and an international oil crisis had sparked the financial shutdown of consumer markets in the US and Europe. Even though World War II was fading into the past, many châteaux and vineyards were still in disrepair because of lack of money – adystopian past, to be sure, yet there are still many people in Bordeaux who remember the period well.
Nevertheless, that scenario seems difficult to imagine today on a drive out of Bordeaux city and up the D2, the quaint two-lane road that wriggles past the classified growths of Margaux, Saint-Julien, Pauillac, and Saint-Estèphe, with their storybook châteaux and pristine vineyards. It’s even more difficult to imagine when checking the price tags of the region’s best wines, a single bottle of which can well exceed the cost of a month of groceries for most families.
Yet, it is all true. As Ivanhoé Johnston, whose family have been Bordeaux wine merchants – Nath. Johnston & Fils – since 1734, tells it: “In 1975, all business had stopped. Wine stocks were in bad shape, and many people went bankrupt.”
Bruno Prats, also from an illustrious wine family and proprietor of Cos d’Estournel from 1970 to 1998, was more fortunate. But it was a close call.
“I started at Cos in 1970 under very difficult conditions,” he remembers. “I would have to go to the bank before harvest and ask for money to pay the workers.”
Bordeaux’s euphoria at being liberated from the Nazi occupation during World War II had quickly worn off. During the war, the wine community had survived by selling to Germany, although a weinführer, Heinz Bömers, mandated often minimal prices. Some wine was simply appropriated by German troops without payment. Yet there were merchants – négociants – who courted business with the weinführer and prospered accordingly. One particularly prominent merchant, Louis Eschenauer, was charged after the war with “economic collaboration”, and put on trial in civilian court.
While some competitors probably thought “good riddance”, they kept quiet.
As Don and Petie Kladstrup, observe in their book, Wine & War: “Other négociants who had sold wine to Germany knew it could have easily have been any of them on the stand. Some, in fact, had already been fined and seen their goods confiscated. Others had competed for Bömers’ attention and business by inviting him to parties and trying to demonstrate their interest in German music and literature.’”
Eschenauer was convicted in late 1945 and sent to prison. But in 1952 he and many other collaborators were given amnesties by Charles De Gaulle’s French government that was seeking to bring the country together after the war years that saw those in the resistance tortured and killed. Following the war, suspected collaborators experienced the same grisly fate at the hands of vigilantes.
Nor was the gloomy mood of the 1950s helped by the weather. “There was a succession of poor vintages at the time,” remembers Dominique Renard, who for 30 years managed Duclot, the marketing arm of Moueix family wines, including the famous Petrus estate.
“The year 1956 in particular was engraved in our memories. There was about a foot of snow in the vineyards in late spring, and for a while everyone thought the vines were dead.”
The following decade was no sunnier.
“The ’60s had quite a few bad-to-horrible vintages,” says Prats, rattling them off from memory: “There was ’63, ’65, ’68, and ’69. Only 1961 was a great vintage. ’62 was decent, and ’64 depended on when you harvested, because we had rain.”
In comparison, today older Bordeaux producers remember the last truly terrible vintage as perhaps occurring in 1993. Many, if not most, of today’s winegrowers have never experienced a truly catastrophic harvest.
But the 1970s started out on a much better note. The critic Robert Parker, who was not to arrive in Bordeaux until a decade later, retrospectively applauded the ’70 vintage as “the first modern-day abundant crop that combined high quality with large volume”. Vintage 1972 was also good, but while 1973 was also very abundant, the grapes were generally in poor condition due to rains.
All this might have been managed had there not been trouble from outside Bordeaux that almost killed the wine economy. In the autumn of 1973, oil-producing Arab nations called an oil embargo in retaliation for the US and European countries supporting Israel during the Yom Kippur War.
Escalating oil prices meant severe inflation in all of Bordeaux’s wine markets at a time when the region had full wine stocks in its cellars. Although the embargo lasted only into 1974, the economic effects lingered much longer.
ENORMOUS STOCKS
Until this time, négociants had controlled the wine markets more than producers, holding enormous stocks of wine from multiple vintages in their Chartron cellars at La Place on the Bordeaux waterfront.
As Prats recalls: “1970 was a good vintage, and it was the beginning of the American market, helped by the rebirth of the wine industry in California. The problem was that the prices rose too quickly,” he says.
“In early 1972, the négoces bought too much wine, and it wasn’t as good as we had thought. They couldn’t resell it, so that meant they didn’t have the money to buy the ’73 vintage from the châteaux. As a result, the châteaux were also locked in, with stocks languishing in their cellars.”
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Even though Prats had to borrow money to pay workers at Cos d’Estournel, his uncle, Pierre Ginestet, was in a much worse position. As a major wine merchant, he had borrowed heavily from banks, putting up the family-owned Château Margaux as collateral. When the market crashed, leaving his cellars at La Place full of unsold wine, he had to let go of Margaux to pay off his debts.
At the time, young Dominique Renard was working at Château Margaux, at the start of his career.
“I attended the discussions when Margaux was looking for a buyer,” he says. “Margaux was the only First Growth whose wines were not sold on La Place, as its owner, Ginestet, had exclusivity to the wine and sold it in the US though Kobrand. So they bought up complete vintages, which then they couldn’t sell. National Distillers from the US wanted to buy Margaux but the French government stopped the sale. They said Margaux was a national treasure and could be purchased only by someone French but then they agreed for it to be sold to André and Laura Mentzelopoulos, who were Greek, although they did own supermarkets in Paris.”
The transaction was completed in 1978. Lesser-known châteaux in distress also searched for buyers.
Even family-owned estates in transition were not all that stable. “On the Right Bank in the early ’80s,” Ivanoé Johnston relates, “when Stephan Neipperg took charge of the family estate, Canon La Gaffelière, the roof of the château was not at all secure, and he had to concentrate on living in just part of the property.”
Renard recalls, “When Jean-Michel Cazes took over Lynch-Bages in 1973, he said the estate had more debts than assets.”
Château Pontet-Canet in Pauillac changed hands for other reasons. Wine scandals involving cheap wine, generally from the South of France, being blended with those of Bordeaux were not new, but the one in 1973 could hardly have come at a worse time for the region’s reputation.
The most prominent name involved was Lionel Cruse, whose family owned a large négociant business, as well as Pontet-Canet, then its family seat.
THE ‘WINEGATE’ AFFAIR
Although proclaiming his innocence, Cruse didn’t help his credibility in the US by comparing his fate with that of Richard Nixon’s. In November 1974 Time magazine reported: “When the scandal broke in June 1973, it was quickly dubbed the ‘Winegate’ affair by French papers.
Protesting his innocence, Cruse shot back in righteous anger: ‘You’ll see, I’ll be the Nixon of Bordeaux.’ That prediction turned out to be more accurate than he could have possibly wished.” And thus, Pontet-Canet was sold.
In 1976 Bordeaux’s pride was further wounded when English wine merchant Steven Spurrier held his now-famous Paris tasting, in which California wines were judged in a blind tasting by French experts as being superior to those of Bordeaux and Burgundy. “But the Judgment of Paris was also positive for Bordeaux,” Prats says, “because for the US market it set Bordeaux as the benchmark for wines to be compared with. It was the best way to promote finewine drinking in the US.”
The last few years of the 1970s passed somewhat quietly, but in 1981 the French government stuck another financial dart in Bordeaux’s heart by doubling its inheritance tax, crippling the way French wine estates had remained in family hands for generations.
Then, almost magically, the clouds parted, and there was nothing but sunshine.
“The 1982 vintage proved to be a turning point,” Renard says. “Not only was it of great quality, but Robert Parker came along with his opinions running counter to the English critics, who thought the wine was too good now and that it wouldn’t age.”
This was a vestige of prevailing thoughts in the days when Bordeaux wine was uber-tannic and needed years to be drinkable. “After that,” Renard says, “Parker ruled the market for 30 years.”
The combination of Parker in his first year as a critic taking the wine world by storm with his 100-point ratings and eclipsing the more-conservative and price-sensitive British trade press, paired with the Judgment of Paris six years earlier, turned America’s Baby Boom generation into wine connoisseurs and passionate Bordeaux collectors.
BOOM AND BUST
Since that 1982 vintage, Bordeaux hasn’t looked back, although there are periodic predictions of another crash because of high prices. While certainly not going that far, Prats does point out that boom and bust isn’t new to the region.
“The 19th century was very prosperous for Bordeaux,” he says, “but after the first war and the financial crash of 1929, the situation was even worse than it was after World War II.”
Johnston has another story from the bad years – this time a feel-good one – about a young woman who took over her family’s château, but then almost lost it. She was May-Eliane de Lencquesaing, and the château is one of Pauillac’s grandest, Pichon Longueville Comtesse de Lalande.
“May-Eliane inherited it in the late ’70s when several lots [of vineyards] were split among the Miailhe family,” Johnston says. “She cried because she thought she would have to sell the property in the early ’80s. But she ended up selling her 1982 vintage crop for more than the price she was expecting if she had sold the total property.”
De Lencquesaing continued managing the estate for more than two decades of good times before selling it in 2007 – this time, without financial pressure, and on her own terms. And she did so when memories of the decades of Bordeaux being destitute seemed only like a bad dream.
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