Bordeaux uncorks blockbuster vintage, eyes China
Tuesday 30 March 2010
[CORRECTS to read XX futures market XX sted auction in intro] French vineyards launch the annual Bordeaux wine futures market this week, boasting a blockbuster vintage they hope will revive their flagging fortunes and lure wealthy Chinese buyers.
More than 6,000 wine professionals have descended upon the Bordeaux region, many of them from the cash-strapped Western economies that were forced to slash back imports of fine wines in 2009.
Traditional markets in the United States, Britain and northern Europe may now be starting to pick up, but in Bordeaux all eyes are on global powerhouse China, now the key customer of the chateaux.
And the 2009 vintage, which is sold this year, is reportedly very good.
Market-making wine critics Robert Parker and James Suckling have not yet released their all-powerful ratings, but experts are already confirming what the winemakers have claimed.
"Great vintage, definitely. Certainly among the best vintages ever," said world-renowned wine consultant Michel Rolland. "I think the grapes are better than in 2005 and even the technical approach is the best we have ever had.
"I think the wines are fascinating people all over the world. If this vintage is not able to bring back a good market, I think we have big trouble for the future in the wine business," he told AFP.
In a system unique to Bordeaux, wine is released for sale between April and June, more than a year before bottling, in order for the buyer to secure both a supply and a price.
Big vintages create a big buzz, fuelled by the trade-only tastings and constant negotiations between winegrowers, merchants and export clients.
The last hot vintage in 2005 sold for record prices, but subsequent vintages have received tepid interest, and last year's global recession took a massive chunk out of the market.
Now things are looking up.
"We've beaten our record which was 5,475 visitors for the 2005 vintage, an excellent sign of interest," said Jean-Marc Guiraud, president of the Union des Grands Crus, which represents the region's top winemakers.
Many estates will sell 70 to 90 percent of their stock, and for top labels like Chateau Beychevelle and Chateau Pape Clement 95 percent will change hands within hours of hitting the market - if the price is right.
For, even if the buzz is returning, traders are effectively playing on a futures market at a time of economic uncertainty, gambling that the quality of the 2009 vintage will see it sell well in several years' time.
"Foreign clients are showing a more pronounced interest than they have in recent years," said Georges Householder, head of the merchants' trade body. "In particular, China is showing signs of entering the futures market."
Don St. Pierre, chief executive of ASC Greater China, the largest importer of fine wines to China, confirmed this trend.
"I believe the demand will be strong, but if prices come out too high, i.e. near the 2005 release, it will not be well received," he wrote in an email to AFP as the bargaining began.
The price levels negotiated in the coming month will be crucial to the industry, a important source of French jobs and exports.
After lean years, winemakers are keen to capitalise on the high quality vintage, but if prices are set too high they risk scaring off buyers.
"There is beginning to be some interest, but price will be the determining factor in this still dicey economy," said Chris Adams, chief executive of Manhattan retailer Sherry Lehmann.
"It's early yet, but the few wines I've tasted confirm that this is quite special," he added.
Many British dealers sell on their stocks to Asia but, with sterling very weak, they are nervous.
"There is still a crisis. They don't know what they should budget for futures," said Sebastien Chaumet, export director for merchant Ginestet. "They have to buy and sell every day. They need cash every day."
Winemakers Jean-Michel Cazes of Chateau Lynch Bages, Patrice Hateau of Pape Clement and Philippe Blanc of Beychevelle all told AFP they would take the economic context into account as they negotiate prices.
"There is a lot of excitement, a strong demand, but one must remain serene in a complicated global context," said Blanc.
Nevertheless, at the top end of the market - legendary grand crus like Chateaux Lafite-Rothschild, Margaux and Ausone - prices are expected to soar.
"We will be in the irrational," predicted broker Francois Leveque.
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