I miswrote. The sentence does indeed say that EP had fallen to account for 30% of sales. Thus they were left with 70% It didn’t say they should hold back 70%.
1 Like
David, you raise 2 different points. First it’s not clear the winery in question sold 30% of what they offered, or of what they produced? Next, to create a context, what was their wine priced at, vis a vis, similarly scored vintages of their wine already available in the marketplace and how much demand in general there is for their estate.
Point 2… it’s more than the need for physical storage, it’s the cost of holding those wines. That’s a massive amount of money to hold back a large percentage of stock of multiple vintages for years.
Another issue is that most negociants rely on EP sales for much of their profit. If all of that wine is held back, the current pool of maybe 400/500 negociants shrink. The end result will be only the biggest survive, That will increase focus on the most in-demand names, leaving fewer behind the scenes discounting creating firmer prices to consumers. Plus more smaller growers will have an even more difficult time finding places to sell their wine.
1 Like
For the cost of 20%, the chateaux gain instant access to the world market. The negociants pay in full before the end of the year handling almost everything. They also agree to purchase every vintage, good, or bad. The negociant system and La Place de Bordeaux seems cost effective to me. There are some properties that could bypass the system, but most don’t as the cost is seen as fair.
You are arguing for why the current system is a good one. But if the EP system is failing, then, by definition, the current system isn’t working.
Whether the domaines are selling 30% of their wine through EP or 30% of what they put up for EP is not germane to the point that that figure is a decline from a much higher one. It’s not that the article is telling them they ought to hold back 30% or more of their wine. It’s saying that that is the wine they are left with, and that means, again, the current system isn’t working.
Different topics IMO. The negociant system and La Place de Bordeaux is a good benefit to consumers and chateaux.
The issue is, prices being asked EP are not what the market wants to pay for most wines. Buying 2 years in advance is not tenable with interest rates at 5% or more without a direct benefit to the consumer. That’s not sustainable.
My guess is EP will change over the next few years. But Negociants and La Place will continue.
Agreed, Jeff, holding large quantities back is both a space and a financial hurdle, as I acknowledged in my post.
My take is that La Place has distorted the market, with négociants acting as a huge buffer. It has allowed the châteaux to increase prices beyond what a truly unfettered market would support. That’s gone on long enough for the consequences to be more severe now as the inevitable correction occurs.
4 Likes
Well, your next post argues that La Place is distorting the market, which would not be good for Chateaus or consumers. The article’s point was that EP was not working. Your claim that it distorts the market aligns with its position.
And again, holding back an amount is not the issue. The point is how they will have to change to sell what they have since EP will no longer do that for them.
Sorry, I confused you with David. If EP prices are “too high,” then by definition the market isn’t working and the place to look for the problem is where the “too high” prices are coming from. The chateaus themselves and La Place are the logical places to look. “Too high” doesn’t magically happen? If not the chateaus and/or La Place, how duo you account for it?
What is “too high” today is not what “too high” was before the market collapsed.
Since I think this was meant to be a reply to me, let me say I think both things are true: La Place distorts the market and, as stated in the article, EP is not working. At least not like it used to.
The market is working. If enough consumers don’t buy, prices will decline. EP pricing is the issue, which is a different story.
1 Like
IMO the negoce buying up all the EP offerings at higher prices than the market accepted and piling those bottles up until very recently (24/25?) was and is delaying the correction, we‘ll see. The news that indeed the negociants stopped buying up everything is a change unheard of earlier.
2 Likes
I cant remember if you’re on the wineEP discord, but she’s an active member there 
I’ll pass this thread on to her
(NVM Ive just noticed she replied in this thread!)
1 Like
A large number of warehouses, allegedly, have been put up in recent years in Bordeaux. Compound this with negociants not taking stock in the last couple of years, chateaus are getting flush with stock.
They will have to shift this stuff at some point. You cant produce 1000 of a thing every year if the demand for it is only 100 units. There’s a reason why no manufacturing business runs at 10-20-30% utilisation!
If something doesnt change, and rapidly soon, there will be some kind of systemic collapse. I dont know exactly what that will be - whether its a large number of chateau collapsing in a rapid fashion, or dramatic price cuts… The problem, fundamentally, is consumption right? Without China, a whole “UK” worth of wine drinking switched off in the last decade. That’s a LOT of missing consumers - ignoring the other macro trends about the declining popularity of Bordeaux - without any of that, there’s no easy fix here - unless you can convince someone like India, Indonesia, or Nigeria to buy Bordeaux en-masse.
..which is a shame because i think middle range bordeaux is some of the best value for money (+ consistency) money can find.
3 Likes
Good point, I hadn’t noticed, but I think this is actually a misunderstanding by the author. Most consumers don’t taste the wines in barrel, so perhaps the “buyers” in question are the négociants or other ITBs. Consumers who buy EP try to “align” their palate with that of a critic, but taste is always subjective, so naturally a wine can be disappointing when in the end it doesn’t suit the consumer’s palate. This is one of the problems today with EP - why buy an unfinished product blind when you can buy and taste one yourself a few years later, often at a cheaper price?
I’ve no doubt you’re right about their longstanding partnerships. It’s the same in any business. Bordeaux CCs have no experience of selling direct, no market insight, and no client network, so undercutting their partners would be foolhardy. They need to work with them, not against them.
I’m assuming that the short-term problem is 2025. The wine is still in barrel. They have only sold 30% of it. What do they do with the rest? How do they decide how much to bottle in which formats? They don’t have enough storage space (although if 2026 is a smaller harvest, this might help).
I’m sure experienced Bordeaux château owners are dying to know the opinion of a total nitwit, but this is what I would do. As always, it’s about the money, but also, as the article points out, about what the client wants. I would embrace the idea GPL began, so multi-format cases, but improving it by including halves. I would also offer multi-vintage cases of both halves and bottles. For example, one bottle each from 2020 to 2025. This is nothing new - I get similar “ex-château” offers every year (prepared by the châteaux but sold by négociants), but the prices are always prohibitive. So châteaux need to bite the bullet, and drop the prices - of wines already sold to négociants. The latter have untold mountains of unsold wine they need to get rid of - and a partnership works only if both sides are happy. So yes, you sold your 2021s, 2023s and 2024s, but if your partner isn’t selling them, it’s your problem too. Giving credit notes on unsold wines in warehouses would enable you to get rid of the unsold wine still in barrel. Offering a case of six different vintages enables them to hide the real price of each, so not undercutting the market for the “troubled” vintages, whilst giving consumers a proper deal. I would certainly be interested in something like that and I’m sure I’m not alone. It would also be a way of finding new consumers - it’s not exactly an original idea - wine producers all over the world offer “sample” cases - why wouldn’t Bordeaux?
I don’t think that’s likely to happen again. The average French punter has more important priorities than buying wine costing more than 20 to 30 euros. At the recent FAVs, anything costing more just remained unsold.
Yes, absolutely.
I’m not particularly worried about Bordeaux’s future - they have always managed to ride out crises in the past, but as in any market, it’s the survival of the fittest, and rightly so. The more creative and agile will find the right solutions - and for once, it won’t be about one-upmanship, which has dogged EP pricing for years, but “one-downmanship”.
3 Likes
On the note here, I Think one thing I really appreciate is what Tom Mann has started doing - more varietal mixed cases in the UK during EP. For example on the Yquem 23 release, a bunch of us on Discord paired up to get 1 mag, 2 bottles, 4 half bottles each (should have been 6 halves to round it out into full cases). That’s a degree of uniqueness I appreciate. 6 bottles of Yquem are a lot harder to drink, and 3 mags near-impossible based on my track record to date.
Similarly in 23, we agreed (but last minute changed) on a GPL-variations style case of Montrose.
To the point about the suply chain, if Chateau are unwilling to reprice the wine they produce to something more competitive, then the only other solution is to reduce margin in the supply chain. UK retail at least has been gradually eroding margin on EP as it stands to my conversations, so there ain’t much fat left in the system.
As a consumer with a lot of wine, on the one hand, I’m sad about depressed values in Bordeaux, but it’s also a “good” time as a consumer - though obviously in the medium or long term there’s ramifications about chateau shutting down, etc.
In my head, though, Bordeaux has made the classic mistake of “not enough room at the top” - everyone is trying to premiumise their product perfectly at the time where the more premium products are exactly NOT what the market wants.
2 Likes
2 Likes
Sounds like another wine region I’ve heard of lately… some place in California…
3 Likes
You are arguing in circles. Your original criticism of the article was that EP does not set prices, the market does. You now agree with the article that EP prices are too high, but they are somehow not part of the market. The point of the article that you criticized was that EP prices were too high and you are now making the same argument.
This seems an overcomplicated analysis of a simple problem with a simple fix - they priced themselves too high. The reason 2019 was the last successful campaign is because the prices were irresistible and they haven’t done that again since.
I also have to disagree strongly with the “Bordeaux Week” idea. Showering more freebies on the trade that aren’t for sale to regular customers is not the way to build good will with anybody.
7 Likes