My Article: 2011 Bordeaux Pricing

The only problem with 2011 Bordeaux is the price. The quality is very good. Some wines are even outstanding, especially the dry and sweet whites. Check out my tasting notes of 560 wines in Monday’s report, if you subscribe.

The prices must drop significantly if Bordeaux wine producers want to sell their wines as futures, or en primeur. In some cases, they will have to drop by more than 50 percent to generate interest in the wine trade and consumers alike.

The bottom line is that the top wineries of Bordeaux should sell their 2011 futures for less than the current price of the least expensive bottle on the market. In other words, people are not going to buy 2011 for a price that’s more than what they can buy an older vintage for in bottle.

I certainly can’t recommend buying 2011 Bordeaux futures to my readers if they can buy, say 2002, 2004 or 2007, for less. No reason exists to tie up money in a wine that won’t be delivered for three years when a bottle from a similar quality vintage that is ready now can be purchased.

I asked the London-based wine-trading platform Liv-ex to create graphs for first and second growths to show the least expensive vintage currently on the market, according to its database. It looked at trading prices on its platform from the vintages 1999 to 2010. Prices are trade-to-trade transaction prices. Consumer prices would be more.

The least expensive vintage for the first growths with Liv-ex currently on the market is 2002 at €375, although the 2004 is very close in value at €377. The 2007 is also very close at €383. This falls in line with what I heard while in Bordeaux last week, that the first growths are thinking of releasing 2011 prices at just under €300. That would mean prices to the wine trade should be near €350. Again, consumer prices would be more.

Just for the sake of comparison, the first growths in 2009 and 2010 are trading together at an average price of €844 and €795, respectively.

The second growths would have to come down much more. Liv-ex averaged the bottle trading price for each vintage on its electronic platform for the combined values of La Mission Haut-Brion, Léoville Las Cases, Ducru Beaucaillou, and Cos d’Estournel, and it seems that the prices for 2011 would have to be less than €97, which is the trading price for 2004. This means that the 2011 probably should sell for something in the region of €80 a bottle.

The average bottle price on Liv-ex for these wines in 2009 and 2010 are €286 and €279, respectively.

I discussed pricing with dozens of winemakers and chateau owners while in Bordeaux and most agree that their prices need to come down. Some of the most vocal were the first and second growths, but I just don’t know if they can find it in themselves to come down enough to make the market interested in 2011.

Liv-ex, the London-based wine trading company, provided statistics and graphs for this story — www.liv-ex.com. Look for more collaboration with Liv-ex on my website.

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One thought on “My Article: 2011 Bordeaux Pricing

  1. danielisenhart says:
    The Bordelais are always reactive when it comes to pricing en primeur following a great vintage (or in this case 2 great vintages). So there is no doubt in my mind the 2011's will be overpriced (even if prices drop by 40-50 percent over 2009 and 2010) and will not sell as futures, as was the case back in 2007. My hope is that 2012 is a great vintage because if history plays out, these wines should return to a level of affordability as was the case in 2008. After all, something has to eventually change, right?