Dear Ladies and Gentlemen,
Question, is there a wine pricing bubble (significant price drop) coming? Where might this impact pricing the most? Where/what should I build a “watch” list to take advantage? How low could prices drop?
Curious-what makes you think there is a drop coming?
Seems like we have another year of covid disruption, en premier was disrupted back inventory already high, new regions bumper crops higher competing wines, fires may force sale of libraries for cash flow, general global recession,seems like could happen?
Factor in another Vintage of the Decade, Century, and Year…and prices will go up one more time.
Seems prudent to at least build a watch list senerio to take advantage!
There have been other threads that touched on this. It’s complex and there are multiple influences, it’s early in the COVID game and general economic disruption, and there’s still significant money in the game.
bear in mind bordeaux priced down already 20-25% this year. But I dont think we’ll see a large wine price pop - vintages are relatively unique and not commodities. Look at the recent 2010 Palmer or 2009 Latour releases - infact being above market price rather than below to clear out inventory.
You might see a price drop in the lower end of the market, but at the higher end I wouldnt hold my breath
What could be interesting is if th recession really sustains for a while and 2020 gets priced down heavily as well, and perhaps extending in to 2021. If they are good vintages. That could arguably really undercut the 2018, 2017 and potentially 2016 pricing in Bordeaux at least, which will suck for anyone who bought them in futures. The challenge THEN, of course, is that if you’re screwing people who buy wine EP, you’re really screwing yourself in the medium term.
mid tier california or bordeaux? sure
burgundy, piedmont, n rhone? nope
I am guessing something along those lines. Your <$60 wines may soften, and in particular, the savvy buyer may find more sales and clearances, as wineries try to raise some cash and dump some excess inventory without damaging their future price point. I could also see some softening above that price point in more large-production non-geek wines which rely heavily on restaurant sales.
But expensive and especially trophy wines probably aren’t dropping much, if at all. At least it doesn’t feel like it thus far or in the near future.
The bubble question has been asked, and the market has answered, at least 10 times in the last 10 years. Not happening.
In general, I’d agree, but if you’re buying trophy wines at the moment you can get some good deals. 2019 Le Pin came out lower than 2018 and more comparable to 2017 if I remember correctly. Lafleur was the same price as last year, but if your wine doubles aftter release why would you discount? Lafite, Mouton, Pontet, etc, all respectably discounted in 2019 (as a vintage).
If you’re talking about the ‘generic’ Le Pin/etc pricing, then I’d tend to agree, this vintage just represents cracking value for money against the wider market and I would expect it to go up to traditional levels in due course.
No
Maybe the question is better ask "IF there is a bubble WHERE is the most vulnerable region?
trophy wine pricing isnt going anywhere because the people who drive those prices up aren’t losing any money. agree we may have potential to see some library offers or fire sales to help gain some liquidity for non-trophy wines and but the jaw dropping prices we see are here to stay
Will be similar to 2009 in fashion - the top end designers continued to perform strongly as the rich are still rich (losing $5m in wealth is nothing if you still have $20m around), the lower end generally performed well, and it was the middle bracket that got squeezed hard.
All the top flight wines - DRC, Rousseau, etc will continue surging. It’s the stuff bought by the middle and upper-middle class that might take a hit.
Just what I came to say as well Matt. There could be some deals on mid tier wines, but neither the trophy wineries or their chasers seem to be hurting in this economy.
If nine months is still “early”, then when do we get to halftime, and when is the 2-minute drill at the end of the 4th quarter?
As long as the central banksters keep pumping fake money into the world economy, and as long as the chinese can’t figure out how to clone Vosne & Musigny & Montrachet & CC somewhere on the steppes of central asia, the sky’s the limit for Burgundy.
Infinite fake money plus extremely limited authentic Vosne/Musigny/Montrachet/CC dirt makes for a seller’s market.
Don’t know about Bordeaux or the Northern Rhone or the Cal Cab Cults - maybe Cote Rotie keeps appreciating? - but there’s so much more soil there that there’s still plenty of elbow room for newcomers [on the production side of things].
Agreed, Jon. People need to remember that when COVID hit there was already a lot of wine in US warehouses or in the pipeline on its way here. This wine was already priced and much of it paid for. That wine has sold at a decent rate at retail, but with on-premise sales in decline it’s been slower than importers, distributors, and wineries want. Some importers and distributors are slowing down on imports, but eventually all of the wineries are going to want more consistent sales. And if it’s not one of the 100 wines that collectors really clamor for, I can see the pricing on a number of wines dropping some if the current COVID trend continues into next year.
Below the trophies, collector’s items and social media influencer wines, I do think there is a glut of wine out there. Think of how many fewer bottles of wine have sold in restaurants in 2020 compared to normal years - that wine is all still in bottles, needing to be sold.
The savvy shopper will find bargains and opportunities – many of them of the quiet variety as wineries don’t want to damage their brand and future price points. “Full case purchases of our 2017 X Vineyard Pinot for 50% off, only to our mailing list,” that sort of thing.
I don’t think that is the same thing as a “wine pricing bubble,” though.