From a recent Dan Berger article on Abdallah Simon, recently deceased:
"Classified Growth Red Bordeaux today is seen as a classic, showing the good taste of party-givers. Older bottlings from esteemed producers now are the standard from which to judge all wine. A bottle of 2000 Chateau Latour would run you some $1,500.
I mused about this the other day and realized that one man, more than any other, must be credited with today’s image of red Bordeaux."
The money quote is: "Under Simon, [Seagram] C & E propped up prices on weak vintages through both its import business and its direct ownership of such Bordeaux portfolios as Barton & Guestier and Cordier.
Back in 02’ you could cut a deal for a case of 96’ Margaux for around $100 a bottle, the normal wholesale was $250 at the time. You simply buy 10 cases of other BDX from Seagrams portfolio at already inflated prices (Malescot 98’ @$45 wholesale) and you got the deal.
That to me said it all, 1st Growths were already over inflated and in order to keep the perception of quality(price) high, they had to prop up their other estates pricing so as not to seem so out of whack.
We could price the Margaux at whatever we wanted but the other BDX would be normal markup. As retailers we would take a larger margin on the Margaux (100-200%, so seemed like a ‘deal’) and less on the others.
So yes, it would seem as Seagrams had figured out how to manipulate the market very well.
Interesting piece. And I thought you were going to say, guess who, Parker. He surely can take some of the blame. Are the wines or the prices more manipulated?
Not yet, but I have traded a number of older ones this past month.
I’m interested to see pricing for 11’s and 12’s in about 3-4 years, I figure these vintages are wines that I will actually like and drink vs. 09’s and 10’s, I like a little character in my BDX and off vintages (nowadays) do that for me.
I’m not sure what is meant by “written off”. I don’t buy recent vintages, but love to find old bottles that speak to me (and are a bargain compared to '09 and '10).
For drinking, it’s still my go-to region (but nothing younger than 1990).
Me. I admit to buying and drinking Bordeaux with frequency. Then again, I avoid most classified growths and love finding new (to me) producers that are somewhat off the beaten path. It just takes work, but I approach it the same way I approach finding CA pinot noir that I actually enjoy.
I agree in principle, and Bordeaux was one of my first loves. Even today, nothing gets my motor running like proper aged Claret. Nonetheless, the region’s producers are their own worst enemies. Skyrocketing prices and spoofulated styles have made it increasingly difficult to find the types of wines I want at reasonable prices. I have a day job…I’ll find my wine elsewhere, thanks.
You most certainly can - once you sell it to me at a significant loss!
On that note, anyone who’s tired of Bordeaux feel free to PM me - I’ll do you the favor of taking all that awful spoofulated Leoville las Cases, Pichon Lalande, Calon Segur and Pontet Canet off your hands. With a sizeable discount for the charitable nature of the act, of course.
Before this gets off the rails, let’s get back to the OP and the Seagrams effect.
Do any of you think that Seagrams has ruined the market for BDX, have they manipulated pricing?
Lets not make this about spoof and other BS, let’s start targeting some of the reasons for why BDX is where it is.
Between Seagrams, MMD and to a lesser extent BWL, the market has been driven to astronomical levels, before the internet opened up futures (a republican view of opening up markets and letting the free market decide) and you could compare prices and get it cheaper in other areas, it was dominated by whom had the most money or whom had the monopoly.
Does anyone think that if JJBuckley, Premier Cru or others were bigger (or even around) in 98’ or 99’ that Seagrams would have it’s pull that it does now?
It seems that the market is now completely open (thanks to the internet) but unfortunately it happened 10 years to late for the BDX market and unfortunately won’t deflate enough to be affordable for most people.
On a serious note, given the significant increase in disposable wealth around the world (Russia and China in particular), as well as the growing income disparity in other markets, combined with the traditional stature of Bordeaux as the top end wine region of France, I don’t think it would make much of a difference.
For all the democratization of the wine market, it hasn’t stopped Rousseau’s 2011 village Gevrey from being sold for up to $200 en primeur - more than, say, the las Cases I’d mentioned above. The prices may not be quite as high, but I personally don’t think it would have been a very significant factor. Especially if, as per the article, Seagrams refused to increase prices in bad vintages. I’m not sure I believe that, but I also don’t believe they had quite THAT much influence either. Monopolies or even oligopolies tend to be hard to form.
Well I can tell you that MMD and Seagrams had a pretty big effect on the market for a long time.
What your saying is more of a chicken and egg scenario. Would BDX be more expensive because of Seagrams or because of the growth of the rest of the world.
I can tell you that the fine wine market was created from BDX and expanded to other areas from there.
It wasn’t the Chinese whom drove the 1st growths to over $400 a bottle, it was Seagrams. After BDX became somewhat passe, Burgundy skyrocketed and as people were looking for alternatives to both BDX and Burgundy Parker started giving California and CNP huge ratings so thats where the consumer went.
Did China drive up pricing? don’t know but what I do know is that when traveling India in the summer of 00’ there were many ‘upscale’ hotels that had only 1st growths, no Burgundy and no imports, just 1st growths and whom were the imported by…Seagrams.
So to me Seagrams created the demand and when countries became more industrialized the upper crust purchased what they deemed to be the ‘best’, they just so happened to be Seagrams products.
So again, if Seagrams wouldn’t have made the 1st growths $400 wines, would the industrialized countries have latched on as they have and driven prices even higher?
Seagrams may have done an excellent marketing job, but the idea that they’re responsible for pushing prices to that level ignores the fact that Bordeaux became a Veblen good for many people. That wasn’t just due to Seagrams’ marketing power - if Indians and Chinese customers didn’t think these wines were the best, Seagrams wouldn’t have been able to sell them that way.
Also, to be clear, I’m not suggesting that China is “driving up pricing”, merely that a lot of people in China, Russia, India etc. now have disposable income and want to buy these wines. Since there’s only so much of them to go around (you can’t make anymore Clos de la Roche, unless you’re Rudy or Hardy), prices will rise as more people want to buy them. But I think focusing on first growths alone is misleading - again, these are Veblen goods - they HAVE to be expensive, because to a lot of consumers they represent exclusivity. Thus the drop-off in pricing immediately after that tier. Due to the classification system I’d say Seagrams’ (and others’) work was done for them in that regard, rather than any evil genius on their part.
So where does the English trade fit into your hypothesis - Berry Bros, Farr, J&B, etc?
Except for Farr, those merchants are much older than Seagram’s, and still trading large positions.
Yes, Seagram’s was a major player, but London was, and still is, the hub of wine trading.
“Seriously, is there anyone here who has not all but written off Bordeaux?”
Most of my cellar (about 1,200 bottles) is Bordeaux.
I love it more than any other wine although Burgundy, at its best, can give Bordeaux a run for its money.
Speaking of money, I too regret the increase in prices for the famous wines.
But please let’s not adopt a “fox and the grapes” attitude about this.
We regret the prices more than anything else!
Furthermore, there is the perrenial misunderstanding of the very meaning of the word “Bordeaux”, especially in the US.
Nate, I’m pretty sure you’re thinking of the great growths, whereas they represent only 5% of production. Yet another reason to have a nuanced approach.
As to who is “at fault”, please let’s not forget that the name of the game is simply supply and demand.