Friday, April 9, 2010

Bordeaux: They did it again… (sigh) or a critical Bordeaux synopsis by an expatriated Bordelais, grandson of a winemaker

Bordeaux: They did it again… (sigh) or a critical Bordeaux synopsis by an expatriated Bordelais, grandson of a winemaker

Here we go again, the “En Primeur” Bordeaux tasting is now finished, done and over and soon will start the craziness of the long established, yet somewhat archaic, three-tier selling system that the “Place de Bordeaux” has used for the past 200 years (at least).

The market is excited, the press is boiling, the critics have written their last verdicts and ratings, the buyers are impatient to know the results to start their wishing lists and the prices already started to crowd the emails of professional and private wine buyers, Courtiers, brokers, Négociants, importers, distributors, retailers and anybody else who could be involve in the Bordeaux game.

And yes, I said “game”, because it is a game after all, that has been working like a well oiled machine and never really stopped since the British and the Dutch somehow instigated it few centuries ago. It involves thousands of people in Bordeaux (and in the rest of the world), who, somewhat, depend on it. And despite creating, every year, many controversies, critics, disputes, anger and joy, it constitutes one of the most awaited and lucrative markets in the wine world industry.

At the beginning, around the 8th century, believe it or not, Bordeaux was better known for its whites than for its reds. Slowly, the situation evolved with time, experience and experimentation, and Bordeaux red wines reputations increased dramatically in the 12th century. In fact, from the 12th to the 15th century, Bordeaux regained major importance following the marriage of Duchess Eleanor of Aquitaine with the Count Henri Plantagenet (in the mid-12th), who became, within months of their wedding, King Henry II of England. The city flourished, primarily due to wine trade with England and a few other countries. The vineyard area continued to expand to respond to the demand and drastically increased and spread up until the mid-18th century.

Yet, by the 18th century, still only a small bunch of reds from both banks really transcended and were consistently exported to royalty and other aristocratic and “bourgeoise” families of the old kingdoms of Europe and beyond. Most of the rest of the production was sold in bulk to the Négociants and Merchants for local business and fairly short distance export, with hundreds of barrels directly embarked in the awaiting mostly French, English and Dutch galleons parked in the busy port of Bordeaux, ready to journey to various markets of the world.

Châteaux owners were often scions of old aristocratic families (French, English, Dutch, German, etc..) and were more considered as vine growers rather than wine growers. They rarely took on the role of negotiators and businessmen, they were more eager to satisfy the demand and quickly sell their must and juice in bulk to the Négociants, who in turn were ageing, bottling and labeling the wines. It resulted in immediate cash flow and peace of mind for the Chateaux owners, and barely or no left over wines to sell, because each Chateau commissioned several Courtiers to usually sell their entire crop.

To help the Chateaux owners selling their wines at the right price and to the right Négociants (who will in turn nurture, promote and market the wines), Courtiers (or brokers) acted as confident middleman and close representative of the Chateaux owners, negotiating and choosing the Négociants they wanted to sell the wines too.

Like the rest of the different levels and positions that form the “Bordeaux Three-tier system”, Courtiers still exist today and continue their job as decision translators (meaning as someone who mediates between speakers of different languages) between the Chateaux and the Négociants.

Négociants were (and for the most part, still are) the merchants that bought, promoted and marketed, bottled and labeled most Bordeaux wines up until the 50-60s; because most Chateaux and estates didn’t necessarily have the appropriate cellars and/or storage facilities to vinify and age their wines.

The 18th century translated into the golden age for Bordeaux and its wines; more especially the town itself which has remained to this day a jewel of the 18th century architectural style. It also marked the renaissance of the “Quai des Chartrons” (Chartrons’ pier) where most Négociants established their headquarters for practical and economical reasons.

Being a pier along the western bank of the Garonne River at the northern edge of the town of Bordeaux, “Quai des Chartrons” was obviously a direct access to the port. It consisted into an ensemble of huge warehouses, built with the famous and highly recognizable pale yellow limestone as the prominent characteristic of most building from this era in Bordeaux, where the wine was aged and barrels were stocked before bottling or being sent away. It was the wine import-export center of Bordeaux.

Négociants were the businessmen merchants, who pretty much did whatever they wanted with the wines once in their possession. Meaning that Châteaux owners had little or none to do with the final blend and the resulting bottled and sold wines.

For years, due to the fact that it is often raining and humid in Bordeaux (climate also being influenced by the Atlantic ocean and the Gironde-Garonne-Dordogne rivers). Consequently full ripeness is difficult to reach and many Bordeaux wines, which normally shows high tannins with green, vegetal edges, were discreetly and anonymously re-enforced with high amount of sugar (heavy chaptalization) to increase alcohol level and/or be complemented (mostly enhanced in some cases) by an addition of riper grapes or even wines from warmer regions like Languedoc-Roussillon and even Spain and Algeria, to increase fruitiness, richness and depth. Of course, people were closing their eyes on it, Châteaux owners were not necessarily aware of it and the resulting wines were almost costumed for the taste of the different regions and markets they were sold to. It was business as usual for the Bordelais.

Remember that these kind of things (cited above) used to happen quite often due to the raining and humid climate of the region (200+ days per year in average), and consequently lack of ripeness and diluted juice. Therefore, statically talking, most Bordeaux decades, since 1900 (and probably even before), can be divided in 3 categories: 2-3 good to very good vintages; 3 OK to good vintages and 3-4 mediocre to OK vintages (per decade).

It translates that Bordeaux only sells 2-3 good to very good vintages per decade on which Bordeaux Châteaux owners can make a decent amount of money and inflate the prices for higher profits (which has been especially the case in the last decade). It means that the other vintages (good to OK and mediocre), especially the ones before the 50s, needed a bit of help to be better appreciated and consequently sold.

Moreover, between 1900 and 1980, Bordeaux counted quite a few really bad years and vintages:
  • experiencing 2 World Wars;
  • the European Phylloxera plague that lasted until the mid 1930s (and despite better techniques to avoid it, we still haven’t found a cure for it) and destroyed more than 75% of most European vineyards between 1860s and 1930s;
  • one or two great vintages in the 40s and the 60s;
  • the 50s and the 70s didn’t deliver much;
  • the 60s and 70s overall were all about huge production with high yields per hectare, therefore lacking of quality, yet responding to the demand of an increasing market of drinkers as a result of the baby-boom (people born just after World War II);
  • and it is basically only when new and more adapted techniques of vinification and more careful vineyard management (and deeper concerns about applying the rules) appeared in the 80s (with a slight increase of temperature), that most of the unlawful used recipes were dropped for a more respectful use of the rules but also more natural and traditional way of making wine.
  • The 90s only produced a few very good vintages toward the middle and the end of the decade and saw the apparition and rapid growth of the sustainable, “Lutte Raisonnée”, Organic and Biodynamic movement, more developed on the right bank with the “Garagistes”.
  • 2000s were obviously one of the best decades for Bordeaux, with the 80s, but it is partly due to the fact that with the new techniques and methods and rectification processes, bad or good vintages, rainy or not, it has become more difficult to produce bad wines in Bordeaux.
However, the unavoidable use of unlawful and uncontrolled methods, in the vineyards and the cellars (pretty much all over in France), leaded to the creation of the French AOC (Appellation d’Origine Controlée), in 1936.

Before that barely any control over the amount of yield per hectare, alcohol content and origin of the wine occurred. Barely any restrictions (now strictly ruled) existed and the few ones in place were not really followed and/or applied. In fact, it was difficult to check and too current in everyone business to really be able to entirely investigate and regulate it. These are the main reasons why systems like the AOC were invented: to certify the origin, acknowledge the particularity and characteristics of the Terroir (climate, type of soil, geography, topography, etc..); but essentially to control what is done in the vineyards and the cellars and more importantly what is in the bottle.

Just to remind you, the notion and concept of “Embouteillé a la Propriété” or “au Château” (bottled at the property or at the Château), only dates from the 50s. At this time, only the elite and “crème de la crème” wineries like the first growth and a few more “privilegiés” had access to bottling machine. A bottling machine mounted on a truck was passing by in the villages and the estates, and that was pretty much it. Before that, bottles were bottled and corked one by one, by hand with a rudimentary corking machine.

Most of the highly praised estates were only able to buy one of these machines in the late 60s. Moreover, the concept of protection and control of the “bottled at the estate” process was only firmly established by the early 70s. Before that, pretty much everybody, Châteaux owners and Négociants, could do what ever they wanted to the content of the wine to make it taste better, and to the label, without fears of having someone to look over their shoulders.

That are a few of the many reasons why connoisseurs, auctioneers, collectors and wine professionals will always remind you that it is very difficult to prove the origin and the quality of a bottle of wine bottled before the 60s and more especially the 50s.

Also to avoid frauds, a few of the long established Châteaux started to number their bottles and indicates the total bottle production on the label (take for example the labels of Château Mouton Rothschild starting in 1945 up until 1987 for the last vintage of Baron Philippe de Rothschild who died in 1988).

Before that time, way before the 18th century up to the 40-50s, Châteaux and more especially wine growers and small producers didn’t necessarily aged their wines and more particularly bottled their wines at the estate. Some did of course, but most the wines were mostly sold in bulk and a lot of small growers were selling to local cooperatives up until the 70s-80s. Rare were the ones who could take care of their wines from beginning to the end.

Quality of the final blended wine in the bottle depended mostly on the quality, care and professionalism of the local cooperatives and the Négociants to whom the wines were sold (in most cases). Moreover, wines from the same Chateau and same vintage were not always bottled at the same time, which increased the risk of defaults and diseases, but also the overall quality and difference of taste between the various batches. Even now, blending still occurs at different stages of the vinification process, sometimes before the barrel ageing and in most cases after barrel ageing, just before light resting period and bottling. Bottling is now usually conducted at the same time for all the bottles of a same vintage, over a period of a few days rather than weeks (before).

Since the 50s, the situation has somewhat evolved in some ways but overall remained fairly the same despite a few changes in certain roles.

  • Châteaux Owners remain Châteaux owners, yet with much more control and interest than ever before regarding the quality and the taste, and the overall profile of their wines. It is partly due to the strict rules imposed by the AOC system, but it is mostly due to the facts that most Châteaux now have their own cellars, ageing facility and bottling system to always keep a controlling eye on the entire production process from the harvest to bottling and even selling.
  • Courtiers still do the same things and are still shared and pulled both ways between both the Châteaux owners and the Negociants.
  • Négociants still are the merchants of the “Place de Bordeaux”, yet they do not vinify, age or bottle the wines anymore. They basically have lost the control over the taste and the production of the wines that they sell. That said, like before, they still are stuck in the position of buying their entire allocations from the Châteaux through the Courtiers, each vintage and every year, otherwise they could lose part of their allocations which could be a great lost, money-wise, especially for the best vintages.

Négociants are also more careful in their choices and which Courtiers they are pairing with. Over the years, their relation usually becomes a trustee friendship and the Courtier-Négociants relationship usually last as long as business and personal understanding don’t clash. Négociants spend more time than ever before, counseling the Châteaux owners about the different markets and trends, tasting at the Château and traveling around the world to promote and market the wines.

One thing hasn’t changed in more than 200 years and more especially since the Bordeaux classification of 1855, it is still the Chateau owners who fix the price of their wines at the property. Before Négociants used to have a certain influence, now and since the classification, Châteaux owners decide their prices depending on their rank, their reputation and their habits, but more importantly, after spying on their neighbors. Yes, that is right, let’s say that if your neighbor decided to elevate his price because he estimated that his wine is worth a higher price than the previous year, because of its quality and the overall quality of the vintage (and the amount of yields); it is automatically sure that you will estimate your wine being netter than your neighbor’s wine, therefore you’ll apply a slightly equivalent or even a more (understandably) higher price than your neighbor.

Here is the logic of the Bordeaux pricing and it all depends on the first daring Châteaux that will be the first(s) to post their prices publicly; the rest is speculation, competition and always see yourself on a higher ground of quality than your neighbors within the same appellation or sub-appellation (mostly greed, vanity and jalousie).

Nowadays, Bordeaux production consists of 88% of reds and the 12% remaining are divided with mostly whites (dry and sweet) and an increasing amount of rosé wines, which were first created to remove juice from the vat by "saignée" to increase the richness of the reds in the 70-80s and were used mostly for the family consumption. However, the useful action of removing extra juice, due to diluted must, to produce rosé (because it usually rains about 200+ a year in Bordeaux), became a trend and rapidly a profitable new market, which exploded in the 90s and 2000s.

Bordeaux now encompasses more than 12,000 so-called “Châteaux”, grape growers and wineries (including Domaines, Clos, etc…) scattered over roughly 116,000 hectares of vineyards, divided in 57 appellations.

The controversial point is that people in general talk about Bordeaux as a whole, in general terms. But Bordeaux offers many different tastes and profiles from its 37 main appellations, yet people continue to talk about Bordeaux as one and only entity. This happens partly because Bordeaux never really promoted or marketed its wines, for the most part, they have been sitting and counting on their reputation for the last 200 years, to sell their wines.

It is also due to the fact that out of the roughly 12,000 Chateaux and estates in Bordeaux, only about 1,000-1,500 are really known to most markets, the rest remain in the shadow of that small group. And from those, only about 700-800 are really selling well every year. And believe it or not, but the whole reputation of Bordeaux only lies in the hands of the best 250-300 top-tier Chateaux, which sell for a lot of money. That is why most people think that Bordeaux wines are expensive. Petits Chateaux don't benefit of that reputation and suffer a great deal to promote their quality. There are some truly good deals, but it is in the mind of most people that inexpensive Bordeaux are not worth trying and buying or that they are not as good as they should be for the asking price. It is not true, but the market gives this impression and people tend to stick to what is advertised in front of their face, without trying to understand further (only a small amount of the amateurs and the connoisseurs do).

Nowadays like before, Bordeaux wines are still sold by many Négociants houses and Courtiers, who take their own respective commission or marge-in above the price of each other. Châteaux owners still decide of the original prices, then Courtiers take their marges (small %) and finally the Negociants (a slight bigger %). Prices also evolve with the different offerings (or "tranhes") during the "En Primeur" (or Futures) campaign. Not to mention, but prices take another toll when they are delivered and imported (importer's marge then distributor's and /or retailer's marge).

The last decade has brought a lot of controversies regarding price to quality ratio. The big question is what really justify such prices? Super high quality? Reputation? The 1855 Bordeaux Classification? Or and more likely the constant soaring demand from the emerging markets?

In the last ten years, the soaring demand from emerging countries like China, Japan, Brazil, Russia, Corea and a few other countries, has help most Bordeaux prices to skyrocket and continue to trigger interest. Yet, Europe being quite slow, and America mostly buying the best vintages and booing the lesser ones, atop a difficult market, the expensive 2005 didn't sell as well as plan. Moreover, the warehouses in France and pretty much everywhere else are full of unsold 2006, 2007 and 2008.... Bordeaux is eager to sell their 2009. And you know what, to catch up with their unmoving inventory and try to take advantage of this last vintage to make a bit of money based on the anticipated quality of the vintage and the excitation of the press over it...They did it again...(sigh)... they raised their price up for the 2009 vintage.

If you listen to the Bordelais, nearly every vintage of the last decade has been a vintage of the decade. It all started with the magnificent 2000 vintage; the ultra overripe and inharmonious 2003; then the more balance and harmonious, rich and powerful, yet tannic and unsettled 2005; and 2009 seems that it will beat all these previous vintages and their respective prices, which will once again skyrocket and trigger a lot of talk.

Although apparently this year, there are no real consensus regarding the quality of a specific region compare to another, it seems that it is a pick-and-choose vintage, mostly due to the unusual high alcoholic content and the ripeness of the fruit due to a beautiful end of the summer and harvest season. Not every wine, despite the quality of the vintage, justified the imposed 2009 prices. When are high prices justified?

I know that the vintage seems to be promising and even better than the already highly expensive 2005. However, if we take an example without naming the Château, I have just been offered a 2005 vintage (Chateau X) that was selling for about $16, and if I take the 2009 vintage at $170 a case (the price offered to me this year for the 2009), I will have to sell it for $21.99 a bottle, which is crazy to me.

Even if the vintage is slightly better than 2005, how do you want me to explain a difference of $6 to my customers, on a small Bordeaux wine that used to be somewhat of a bargain before.

With a world financial crisis, many natural devastating disasters, and a lingering vacillating economy, Bordeaux market is insane (in my opinion). They really are going to completely kill their reputation if they continue to rise their prices like this:

• 2000 was already quite high
• 2003 was 3 times the price of 2000
• 2005 was 5 times the price of 2000
• 2009 is way higher than 2005 for most wines...

Will they ever understand? ....

Think about it...


LeDom du Vin

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