2007 Futures campaign

Wire from AFP from May 24 :

"Primeurs 2007: "difficult" vintage and "greedy" owners

BORDEAUX, May 24, 2008 (AFP) – Despite the 2007 vintage considered "difficult" or even "intermediary" by tasters, the price of Bordeaux classified growth sold during this futures campaign have barely gone down. Some of the buyers are calling chateau owners “greedy”.
“the quality of this vintage makes it a tricky year”, admits Francis Cruse, Director of the Union des maisons de Bordeaux, the trade representative for Bordeaux wine-merchants.
“the market is expecting more reasonable prices (than the previous years, note from the editor), but it is not the case” he ads, whilst the first prices of the 2007 vintage are starting to come out.

Victim of a gloomy Summer, offset by a nice month of September, mild and dry, the quality of the 2007 vintage surprised everyone being better than expected. Still, there is little chance that it will attract collectors or speculators who are an important part of futures sales.

Futures sales only concern the most prestigious crus and only represent 3 to 5% of total sales of Bordeaux wines.

Stock levels are low, volumes down 25 to 30% compared to 2006. Prices remained high following the stratospheric increase of 2005: “the market for the most prestigious top growths has never been so healthy. So some of the property owners are a bit greedy, as they don’t want to lower their prices”, adds François Lévêque, president of the regional trade organization for brokers of wine and spirit.
Indeed, the campaign just started and the price for the top crus will only come out at the beginning of June following Vinexpo, the largest international wine & spirit trade show, taking place in Hong Kong from May 27 to 29. It takes place every odd years in Bordeaux.

Jean-Luc Thunevin, wine-merchant and property owner in Saint Emilion, describes this vintage as “difficult”. He considers that “it is abnormal that 2007 prices are more expensive” than 2006, even if owners justify their price increase by the “important investments” made to improve the quality.

Even if prices went “down 5 or 7%, this is sadly not even a drop”, he ads, “we would have liked to see -15%”. He asks: “Why pay today wines that will be at the same price in 2009?”, when the futures will be bottled and shipped.
For example, Chateau Lagrange (Saint-Julien) was released by the property for 20 Euros Ex-VAT for a bottle of 75 cl (-4.76%), chateau Haut-Marbuzet (Saint-Estèphe) stayed at 20 Euros ex-VAT, Chateau Gruaud Larose (Saint-Julien), down 2.04%, was negotiated for 24 Euros ex-VAT.
At the same time, we noticed that a drop of 3 to 5% on “Strong brands, with consumer prices between 20 and 40 Euros”, are “very successful”, claims M. Lévêque. On the other end, “lesser known brands, have a hard time at -5%”.

“vintage to drink”, “pleasure wine”, Bordeaux 2007 also suffers, on a certain level, from the lack of interest from English or American customers, who mostly show-up for great speculative vintages. Customers who already are loaded with stock of 2005 and 2006 and are victim of an unfavorable exchange rate. For the broker, François Lévêque, “sales of 2007 will mainly come from mass merchants”. This trend was just confirmed by a colleague, Max de Lestapis: “Mass market will be active this year and will play a crucial role for weaker brands”.
Top names will always find buyers.

hdz/sw/ds "