Uncharted territory: the truth about Bordeaux
Today’s Bordeaux comprises “two different worlds”, with only the top 2% of châteaux relatively cushioned from economic hardship. But what will become of the others? Chris Losh reports.
GOING BY the weight of coverage and mutterings on social media over the last six months, you could be forgiven for thinking that the main issue affecting Bordeaux right now is the slightly chunky pricing of the 2022 en primeur releases. It’s true that increases of 20% on the (admittedly largely unloved) 2021 vintage were coolly received by merchants around the world who were hoping for a ‘good-value’ narrative to convince hesitant customers at a time of such economic uncertainty.
But this is emphatically not the biggest story in Bordeaux. Grand cru classé accounts for about 2% of the region’s volume and is doing well. For the remaining 98%, things are far patchier. “You have two different worlds in Bordeaux,” says Carole Vidal, director of the Conseil des Vins du Médoc.
“The classed growths, who are luxury producers; then everyone else, who is trying to keep their customers. These producers can’t just increase their prices, even though costs are going up.”
Ah yes. Price increases. The ‘two worlds’ nature of Bordeaux is neatly summed up by the fact that this year Château Angélus felt sufficiently confident to be able to put its prices up by nearly 40% (to just over £4,000/case), barely two years after growers gathered outside a Lidl in Libourne to protest at the presence of bottles of Bordeaux on sale for less than €2.
Equally, while Château Léoville Barton has just spent an eye-watering amount of money on a spectacular new winery, complete with 44 oak fermentation vats, producers elsewhere are applying for grants to pull out vines that have been in their family for generations.
UNDERLYING HEALTH
The underlying health of a region is usually revealed by its bulk market, and Bordeaux’s is sickly. It’s hard to know exactly how sickly, since the Conseil Interprofessionnel du Vin de Bordeaux (CIVB) has stopped releasing bulk prices on the grounds that doing so “attracts too much focus”.
Most producers contacted for this article said they would typically receive €800-900 per 1,000-litre tonneau – or just under €1/litre for selling en vrac.
However, there have been reports in the French trade press suggesting figures as low as €650/tonneau over the last year.
France recently put aside €200 million for crisis distillation, with the majority of it earmarked for the south of the country and Bordeaux. A good number of growers in the region are losing money on a regular basis.
Allan Sichel, president of the CIVB, is right when he talks of Bordeaux “going through cycles”. But vignerons across the region must be fervently hoping that this current phase of the cycle does not go any lower. A lot of producers – unprompted – describe Bordeaux as being “in crisis”. Some of this is weather-related.
Combinations of frost and hail have hit the region hard of late. This year, two bouts of mildew left the region’s growers so traumatised that the authorities set up a hotline for them.
Three of the last six vintages have been significantly below average. One producer told me of a peer who has lost their entire crop in each of the last three years and is now giving up.
“It’s the amplitude [of the weather events] that’s the problem,” sighs Sichel. “When it gets hot, it gets very hot. When it rains, it rains a lot. When it gets cold, it gets very cold.
“We weren’t used to this at all before. If it happened one year, you would be comfortable that it wouldn’t happen the following year. It was the exception. We’re now seeing that almost every year there is some catastrophe.”
Bordeaux, of course, is not alone in this. Concerns about climate change are rife in conversations from Walla Walla to Wirra Wirra. The problem is that, even for those Bordelais who battle with extreme weather to produce wine, it’s getting harder and harder to sell it.
Domestic consumption is tumbling in France. According to the International Organisation of Vine and Wine (OIV), in 2002 wine consumption in France stood at 72 litre per capita. Now it has fallen to 47 litres per capita.
Moreover, the decline is not evenly spread. Figures from the American Association of Wine Economists show that white wine sales in the country have remained largely flat over the last 25 years, but those of rosé wines have actually doubled.
However, there’s no escaping the fact that sales of red wine are half what they were in the mid-1990s – a big problem if, like Bordeaux, les rouges account for 85% of your production, and the majority of your wine sales are in the home market. During the 2000s and early 2010s, this problem was masked by the wine boom in China, where consumers paid top dollar for the best wines and hoovered up big volumes of cheap wine as well. In other words, both value and volume figures continued to look good.
However, there were signs even before Covid-19 that the Chinese market was slowing down, and the pandemic, with its extended two-year lockdown, really jammed a spoke in the gears. Volumes in Bordeaux’s number one export market halved. A large number of Chinese who set themselves up as Bordeaux importers stopped and will probably not return.
In the long term, this may not be a bad thing. “What we’re seeing now is real structured importers, professionals,” says Sichel. But it means that the recovery will be slow.
“China still represents a fantastic opportunity. But returning to the years when we were shipping very large volumes is going to take a lot of time and support,” continues Sichel. “It will be a 10-year programme in itself.”
The problem here, of course, is that Bordeaux probably doesn’t have 10 years. Overproducing at a time when world markets are booming is one thing; doing so when most of them are flat or falling is another thing entirely.
Négociants have cut back on the amount of wine they are buying, leaving the many château owners who relied on them with unsold stock and no route to market. The story of Château Cassat, in Puisseguin-St Emilion, is not atypical. The estate used to sell 80% of its production to the négoce and 20% direct to the consumer.
That had shifted to a 60/40 split, until last year, when the négoce took nothing. The business is now attempting to set up a broad-based export business with little prior experience.
“My dad wasn’t big on business – he didn’t like getting on a plane and meeting people,” says current CEO Nicolas Paludetto. Now, with stock unsold in the cellar, the château has no option but to kick-start an export business, though Paludetto admits that it’s “hard for a small property”.
One large UK importer said that it was not averse to taking on new producers from Bordeaux, but it was “strictly a onein, one-out situation”.
VINE PULL SCHEME
The back-story is, it must be said, demoralising – and largely not of the region’s making. There’s nothing, after all, that Bordeaux producers could have done about climate change, a pandemic or global economic meltdown.
One area that could, perhaps, have been addressed sooner is overproduction. And here action is being taken. This year, following strong lobbying from within Bordeaux, the French Government announced a subsidised vine-pull scheme. Successful applicants will be paid €6,000 per hectare either to repurpose their land from viticulture to another crop, or to remove vines and leave the land completely unfarmed.
Partly this is being done for the wider health of the vineyard – untended vines are prone to disease flavescence dorée, which can affect neighbouring plots. But it’s also a chance to go some way towards rebalancing supply and demand.
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Over the next few years, the arrachage scheme will remove 9,500ha of vineyard, bringing the region’s total area down to about 105,000ha. Currently, Bordeaux sells around 4m hl of wine per year, so the vineyard could probably afford to lose a further 10,000ha, which would put the region back to where it was in the 1980s. There’s a possibility that it will happen naturally, whether with government support or not. Numerous small producers spoken to for this article have already cut back their production or are planning to.
Arnaud Burliga at Château La Lande de Taleyran in Entre-deux-Mers has halved his production, dropping mostly red vineyards. Of the 250,000 bottles of wine he makes per year, more than half are now white or rosé.
“You have to be concerned with what consumers drink,” he says wryly. “I can try to drink all my own production, but it will be tough.”
At Château La Mothe du Barry (also in Entre-deux-Mers) and Château Quincarnon in Sauternes, both wineries are consolidating, or have already consolidated, their production, by dropping rented vineyards and concentrating on their own vines. It’s unlikely that other wineries will be queuing up to take fruit from those rejected vineyards.
With whites and rosés generally performing well, it’s no surprise that red vineyards – particularly Merlot – are most at risk of abandonment. Merlot – comprising 66% of all red plantings – was heavily planted throughout the 1990s (“Don’t forget, Robert Parker was a Merlot boy,” as one producer puts it) and, as well as falling somewhat out of favour internationally, also seems to be the most affected by climate change.
Consultant Mathieu Huguet says that, while there used to be about five days between the variety hitting sugar ripeness and attaining “technical” ripeness, now that gap is 10-15 days. It leaves growers with an impossible choice between high alcohol levels and scratchy tannins.
Rootstocks which fell out of favour in the 1960s because they were too productive are coming back in because they are drought-resistant. And Merlot surprised everyone in 2022 when another warm vintage produced wines of remarkable freshness.
Yet even fans of Merlot admit that there is probably too much of it, and expect to see more Cabernet Franc and Petit Verdot going in the ground in the next few years.
NEW VARIETIES
In spring 2021, Bordeaux also sanctioned the planting of six new varieties:
Marselan, Touriga Nacional, Castets and Arinarnoa for reds, and Alvarinho and Liliorila for whites. They cannot make up more than 5% of a grower ’s total vineyard, or more than 10% of the blend, and cannot appear on the label. But they could represent a useful way of combatting climate change.
Take-up so far has been slow – only 150ha of the new grape varieties have been planted, mostly Marselan – but it’s early days and, after centuries of working with the same grapes, a little reticence on the part of the vignerons is understandable. The region deserves a lot of credit for its foresight in implementing the research 20 years ago, and seeing it through to approval and planting.
Another area in which the region is very much a world leader is in sustainability. Bordeaux is on course to halve emissions between 2007 and 2030, and by 74% by 2050. Some 75% of the region’s vineyards have a certified environmental approach.
There’s a school of thought that organically-farmed vineyards might be more resistant to climate change, which could prove useful. Green credentials also play well with the public, and can be useful in gaining listings. In Sweden’s monopoly retailer Systembolaget, for instance, they are absolutely essential.
The downside is that organic yields are lower, and for the most part the wines do not attract higher prices, putting further pressure on finances. Despite this, commitment to greener viticulture and winemaking are solid. As the CIVB’s Sichel puts it: “The culture today in Bordeaux is that there is no other way.”
The green angle is something that may have gone somewhat under the radar – possibly because the multitude of classifications available is baffling. But the growing number of – for want of a better term – ‘modern wines’, made in a less traditional style, or with atypical, creative or even witty labels – is more noticeable.
It’s evident in wine bars and retailers in the city, where not every bottle has an ink drawing of a château on it, and it’s slowly spreading worldwide, through de facto groupings of iconoclastic producers such as those in the ‘Bordeaux pirates’ organisation. The latter ’s mission is to sell wines from “off the beaten path”, and their bottles come with an eye-catching skull-and-crossbones logo to underscore their enfant terrible status.
The CIVB has, this autumn, launched a big campaign, Terroirs de Bordeaux, des rouges de toutes les couleurs (reds of all colours), in its home market – an attempt to encourage French consumers to try Bordeaux wines on different occasions, from after-dinner drinks and with street food to gastronomy.
“There’s a lot of fun to be had with Bordeaux wines,” says Sichel. “And hopefully we will have given the consumer the tools to decode it.”
Certainly, if it arrests – or even slows – the decline at home it will be money well spent, and the campaign could be extended outside France next year.
“Bordeaux isn’t sleeping,” says Joël Duffau at Château La Mothe du Barry. “But you don’t just make these shifts overnight.” This is true. But change is coming to Bordeaux, whether the region likes it or not – and not all the current producers will still be there to see it. db
CIVB president Allan Sichel spills the beans on…
Today’s economics
“The excess of supply is what pushes prices down and means that growers can’t farm their land.”
Rosé and crémant
“We’re seeing very powerful dynamics with rosé and crémant, which are both progressing. Twenty years ago, rosé was often a sub-product. That’s not the case any more. If you’re not making top quality rosés, you don’t sell them.”
Merlot
“We mustn’t consider that Merlot is finished; 2022 is a fantastic example. It did really well in these relatively extreme weather conditions of drought and heat. Research suggests that Merlot has a very good capacity to adapt.”
Green Bordeaux
“We need to push forward the attractiveness of Bordeaux; the whole concept, the whole image. We want to change the perception [of the region] – and that argument of organic and sustainability is very strong and in line with societal expectations.”
Feature findings
• Bordeaux is split in two, between a buoyant high-end market and volume-oriented producers struggling to turn a profit.
• The region has been hit by the effects of climate change and regular severe weather events in a succession of recent vintages.
• Meanwhile, a steep fall in red wine consumption has seriously impacted sales in Bordeaux’s most important global market: France.
• A vine-pull scheme sanctioned by the French Government could see the region’s total vineyard plantings shrink by almost 10,000 hectares to approximately 105,000ha.
• Vineyards planted to red varieties – Merlot especially – look particularly vulnerable as producers pivot to making white and rosé wine.
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