Black Box Pricing Stuffs Up Chateaux

Uncategorized, Wine Industry

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Back in my old life in finance there was a “thing” called the black box. This has nothing to do with the recording devices on planes. This is an idea generator that secretive hedge funds would use. It’s the way they processed the info around them and then came out with trade ideas, but no one knew how the bloody hell they got to that conclusion. Well in Bordeaux right now, the Chateaux are pricing up the 2016 vintage, which is a big thing for the wine merchants and investors round the world. And once again, no one knows how the hell they’re coming out with them!

Brief Thoughts On 2015 Vintage Primeurs

20h33, France, Uncategorized

thoughts of 2015

You might have noticed that I didn’t post anything all last week. It’s not through lack of trying, trust me, it’s more through complete lack of time! I was in Bordeaux all week with a posse of wine geeks getting through the most insane itinerary during one of the most important weeks in the Bordeaux wine’s calendar: Primeur Week.

Getting Ready For Primeur Week

20h33, France, Uncategorized

primeurs

There’s just one more week to go before the great and the good of the wine world head over to Bordeaux for the annual Primeur Week tastings. That little period between Monday and Friday will determine much of rest of the year’s trading in the wines of arguably the world’s most famous red wines. But why? What exactly is it?

Working in the Wine Industry – En Primeurs 2015

20h33, France

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Quite a topical post this one, as I’m just on the train back into London on my way back from Bordeaux. I’ve been out there for three days travelling round with JB and a couple of others tasting the 2014 vintages from the great and the good of Bordeaux. And yes, before you ask, it is a tough life!

Bordeaux Broken Down ‪#‬‬‬5: Last Few Things…

France, Reds, Rosés, Sparkling, Whites

I don’t really want to keep going too long on one topic really. It’s meant to just be a few thoughts and a few pointers to help everyone on their way. If I keep going it’s just going to turn into a bit of a rant. So in the vague hope of avoiding that, I’m just going to rattle off a few short topics in one go, hopefully it makes sense.

Ok, so quick one on the grapes. Not essential knowledge for beginners, but if you’re interested then here you go. The main red grapes are Merlot (dominant on the right bank) and Cabernet Sauvignon (dominant on the left bank). They’re the international varieties most people have heard of. Also in the mix is Cabernet Franc, used a blending tool to add some nice smells. White wines are based around Sémillon (used for the sweet wines of Sauternes) and Sauvignon Blanc.

Lovely Merlot, although I think we all prefer the bottled version!

Lovely Merlot, although I think we all prefer the bottled version!

Whenever people think about wines from Bordeaux, you can’t help but have a discussion about prices. The top wines in Bordeaux go for mental money. You’re looking at anywhere up to and beyond £1,000 per bottle in some cases. Really? I mean really? Most people I’ve spoken to reckon 99.99% of wine drinkers couldn’t tell the difference between a wine costing £100 and £1000. That’s probably true. But this stuff is traded as a commodity these days (tax free innit!).

Also, recent buyers from Asia are throwing the prices up in an unexpected way. Europeans will stick a bottle of ’46 Pétrus in their cellar and just stare at it. They may invite their guests down to stare at it too. If you do this in Asia it’s like a massive slap in the face to your guests. Are they not worthy enough to drink your best bottle? So they drink it. All of a sudden the best vintages in living memory are harder and harder to get hold of. Prices go bananas.

Pétrus, a fantastic producer from Pomerol, coming to a dinner table near you, if you live in Beijing...

Pétrus, a fantastic producer from Pomerol, coming to a dinner table near you, if you live in Beijing…

So prices for new vintages sort of follow suit. People can buy new vintages two years before they’re bottled in what’s called the En Primeur system. It helps chateaux maintain a cash flow throughout production, and supposedly gives people the first look at discounted prices. I tried it for the first time for the 2012 vintage. I set a budget and stuck to it. It didn’t stretch that far. One dinner party with my chinese mates is going to wipe me out!

Last bit I thought I’d point out before finishing is to explain what I meant a few posts ago about it being better to visit the right bank than the left bank. This is just my opinion but, from what I could work out, most of the chateaux on the left bank are owned by conglomerates, and it’s more family owned on the right bank. This has a lot to do with French inheritance taxes, and vineyards being a lot bigger on the left bank. Families couldn’t afford to inherit the land, so they sold it to investors. This makes it a tad tricky to just pop in with a smile on your face and check out what they’re up to.

It’s a bit more serious business mindset. Nothing wrong with that I guess. Also it goes someway to explaining why there’s been no reclassification on the left bank since 1855. You’ve just splashed out £200m on a 3rd growth classed estate safe in the knowledge you can sell your bottles for £75 a pop. You don’t particularly want it getting demoted anytime soon, and struggling to get £30 a bottle. I’d imagine there’s plenty of lobbying going on behind closed doors.

Well maybe I should stop with the cynicism, eh? And I reckon I should definitely stop with this break down of Bordeaux for the time being. Hope you’ve picked up one or two things you didn’t know before.

If there’s anything you want explained a bit further then please get in touch. Otherwise, once again, thanks for reading.

Cheers