Diageo Abandoning Bordeaux

WINE TALK
1

Not sure if this is old news already or if someone has already posted on, but it does not sound good for Bordeaux producers . . .

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Cheers!

2

I think McGruff Posner posted about Diageo dumping Bordeaux and stepping out of the market a while back, but I don’t think it was this concrete.

I’ll be on the lookout for those dumping Bordeaux prices - winehunters, unite!

(I think some of it has already happened, of course, but our ITB’ers will know more accurately, as they are in touch with the distributors who would have first news on the inventory dumping. It’s good to have ITB’ers on a forum - other forums don’t know what they are missing!)

3

damn straight Todd, let the dumping begin!!! [winner.gif]

4

This has been discussed in the past.

I asked a friend of mine, VP of a large distributor, about the effects of this and what is/will happen. His comments were

  1. Only time will tell.
  2. Inside story was most of the higher end wine was going to (a)large chain (b) high end restaurants that are beefing up on their inventories. His company, a large regional/national firm had been offered nothing as of yet. So
  3. Expect most of the deals, retail wise, to be on 5th growths and below.
  4. How much of the wine that is currently “In or will remain In the US”, still seems to be a big question. Diageo never said it was dumping all this wine in the States.
5

Old news really. Anyone on my email list has gotten PLENTY of great deals over the last six months. If you’re looking for 1982 Pichon Lalande @ $200 though…keep dreaming.

6

This has been going on for a little while now.
Diageo has already dumped most of their stocks in MD. I’m not sure how much they began with. I do know that some of the bigger stores and restaurants have been getting some deals over the past few months. Two weeks ago I saw the list of what was left in MD, and my store got 2 different wines at a big discount from listed prices. Though the listed prices were highly inflated. So we got “fair” pricing! One was a 5th growth and the other was a Pomerol. I do know that there was another classified growth or two around though we didn’t get them.
I think the last of it is being dumped right now but it is all Cru Bourgeois.
Not sure if any was transferred out of state or what.
I wish we could have gotten some more cause the pricing was great!

7

Yeah, I think I got some deals…I just don’t know for sure…

deadhorse

8

Quit bitching…it’s all part of your Xmas Surprise. You’ll be kissing my ass until the end of days [berserker.gif] [basic-smile.gif]

9

I continue to become less enchanted with Bordeaux as time goes on. Since I moved to CA five years ago, I’ve purchased less than a case of Bord. All but one of these bottles were picked up in weak moments at Costco.

I have less than three cases of Bord at home, almost all 2000s. Call me crazy or demented, but I really don’t miss 'em.

10

11

OK, You’re crazy or demented. [whistle.gif]
But no worries for the Bordelais as they’ve discovered Hong Kong, and the selling power of certain magic numbers.

RT

12

True, true. That’s just part of my problem with Bord.

13

Yup, I never lie, I just find things out before others!

14

I know Touton bought a ton of stock for the NY Metro area, and to what someone said earlier, yes they did have dramatic price reductions, but it really just a correction. Most of the Diageo stuff was over priced.

15

Now if they’ll just drop d’Angerville…

16

Over priced indeed. One of the wines we got was a 6 pack of trotanoy 2003. MD wholesale price was…$230 a BOTTLE!!! needless to say we paid a lot less. But the wine is available around $110 retail on the internet.

That’s just one example of the BDX prices from Diageo. So this correction is appreciated!

Todd,
I had heard that they were getting out of Burgundy as well. Though I haven’t seen or heard about any deals there.

17

I’ll second that.

18

And Roumier, and Ramonet, and Neillon, and Bonneau du Matray, and Courcel…

19

Bargains, as they materialize, will be nice for consumers and hopefully retail as well (increased sales) but I don’t see the underlying issue being addressed here.

The large price cuts won’t be because of this action it will be because no one will step in to fill a Diageo-sized hole. When production cannot find a large pool of buyers to take product off their hands the readjustment of the pricing will likely be far more severe than the current ‘sell for par’ that’s going to take place. Diageo, and others, know this.

Deflationary spirals are ugly. They only get worse.

20

Hey, that’s a positive feedback system (unstable) and the ending isn’t pretty!

The party is over for the Bordelais unless someone repairs the supply chain quickly. They escaped 06 & 07 by selling off to their negociants and leaving them and the distributors holding most of the unsalable stock - esp. 07. Now, that route is dead and no one as yet has stepped up to fill the void. I wonder if the bordelais will find themselves for the first time having a hard time selling off their wine even in a good vintage?

I think it will be interesting to see what happens when the entire system finally backs up all the way to the Bordelais and they finally bear the risk of selling the juice rather than off loading it.

Chris