I agree with you and don’t know why people think this doesn’t work. The American system works just like this: mailing lists get you access, you buy what you get allocated or you are dropped. It doesn’t matter if they are all cherries or all expensive - same thing happens on certain Napa lists.
Limiting re-selling, if that is a goal, has solutions - it just depends how tight of a control is desired.
I’m sure it does work, it just puts the onus for the company to do things they may not want to hire ppl to do, like manage allocations and ship wine, with complicated laws etc.
you have to assume Christophe sells the wines himself at somewhere approaching market price. right now someone is paying $600 for roumier moose and well under $100 per bottle for the chambolle. if you take that away and the offer is for six bottles of chambolle at $500/per, I’m not sure it all holds together.
I expect someone will provide this as a service at scale. Ingest the list / allocations and handle from there
All this game theorizing is based on the assumption we are dealing with rational agents. I’m not sure that’s the case here. (We are considering the French after all! Just kidding, sort of.)
We can’t assume that maximizing profit and business efficiencies are paramount for the Gibourg sisters et al.
given that this wine trades far in excess of $10k per bottle, there’s a lot of leeway to play with.
in my proposed system, you can make any bottles that you don’t want available to anyone else in the list.
keep in mind, this hypothetical system isn’t only optimizing for the domaine getting the most in every vintage for every wine. that option exists, but doesn’t have to be deployed in that manner. this goes as far as deciding the % mix of DTC and traditional channels.
Yes and I think there is brand value in selling things for less than the absolute most the market will bear, to drive hype and the chase and so they’ll fly off shelves. The last thing you want is to price too high and have them sit. What that hype level is worth in terms of profits foregone is probably different for everyone.
this is silly and verges on insulting.
burgundy producers are painfully aware of what’s happening with their wines. their reactions range from elation to disgust and everywhere in between.
They certainly haven’t been focused on profit maximization to date, and the same is true of most burgundy producers. My only point is that is rapidly changing in real time.
I think if burgundy producers move to a profit-maximization model, you will see US-based retailers and consumers getting left behind because of the three-tier system. There will be a lot less wine sold over here.
but as you note, that has already happened. been going on for a decade+
this is a process and a trend - it takes time. how long? less of an interesting subject imo. the fact that it’s occurring is the paradigm shift. think of all the domaines that have moved from one importer to another for various reasons. every retailer in our system has the same dilemma as every distributor - to whom shall we allocate these bottles? it’s a dynamic system and it likely accelerates. to what end? not sure.
and to repeat - as this seems to be a sticking point - there is no inherent reason to only optimize for profit; it’s up to the domaine. you can optimize for wider distribution, a “fairer” allocation, etc.
Dude … chill. I’m not trying to “insult” anyone.
I know these producers know they are leaving $ on the table and others are unduly profiting at their expense.
It’s a question of whether fixing the “problem” is worth the attendant hassle.
My only point — maybe an obvious one — is that with only so many hours in the day maximizing their profit isn’t how they want to spend it.
Their business model may not be ideally efficient but it works pretty well. They live a good life.
I don’t think the producers in Burgundy, as currently set up and as they currently conceive of themselves are set up for this kind of system. Also, many may not be big enough to weather two catastrophic vintages with terrible reviews if they’re selling everything direct to consumers who could say no. Also, they don’t have the capability to sell direct outside of the EU - they’re not going to set up systems to deal with importing, tariffs, etc. And they will openly say this.
I think we have all, to some extent, internalized the current cost structure of Burgundy, but the penalty of being wrong is overpriced wine in our cellars we can drink. For the producers the downside of expecting the price escalation to continue and being wrong would be quite problematic and severe. I expect many of the Burgundy producers also still remember the leaner years, which weren’t that long ago!
I’m not at all suggesting this will never change - it clearly is already to an extent. Like the the negociant bottling some producers do for specific markets, or the big houses exporting directly. But I think the more realistic next step isn’t Christoph Roumier selling all his wine direct (he’s not going to), it’s a producer massively increasing ex-cellar pricing to get more of the value of their wine (which some have done recently).
this is all my fantasy/speculation, but the version i’d conceive is they do nothing of the sort and a 3rd party platform makes this available to them for a modest straight %. it’s not that complicated or even very different than what they’re currently doing, it’s just centralizing it and giving them more options on how to execute.
your observation of lean years and risk is an astute one. while it’s farther in the rear-view mirror than we perceive, a fairer system would include this risk amelioration
For some of us, high prices drive us away, even if we love the wines of Burgundy.
For others, high prices seem to make a wine more desirable. I imagine this camp sees higher prices as a sign of quality, or worse, a sign of exclusivity.
It’s weird. I began buying burgundy when it was merely expensive. I’m not saying it’s not still excellent, but it really seems to have nearly completed its transition into a luxury good.
Lots of people buy luxury goods.
I am sad for the market, but glad to have a cellar full of pre-2018 burgs bought EP or on release, slowly maturing, plus a few 20th century bottles for special occasions.
Those systems are already under way. Things are changing, albeit slowly.
But there are real constraints in its way, some of which is that it’s also a relationship business. Certain producers have, for example, pulled back on international distribution because they want more of their wines sold and drunk in France. That’s antithetical to a pure profit motive, but that’s one of many considerations.
That’s really not the issue here. Burgundy as a Veblen good simply isn’t the problem. Even if every person who treated Burgundy as a Veblen good (there aren’t many of those) stopped buying it tomorrow the market forces would keep the prices mostly unchanged.
I couldn’t disagree more.
A Veblen good is **a good for which demand increases as the price increases. Veblen goods are typically high-quality goods that are made well, are exclusive, and are a status symbol. Veblen goods are generally sought after by affluent consumers who place a premium on the utility of the good.
This sounds exactly like the current burgundy market to me.
this discussion seems to be applicable only to a tiny fraction of producers. sure, charles lachaux can bundle his negoce wines, sell them for whatever he likes via a 3rd party platform and will likely clear the inventory without much effort. but in reality how many producers can sustain this type of market for themselves? maybe this could be an effective solution to maximize for 20 or so top names but there is a sea of wine in the region that this type of model is not suitable for. as long as demand remains immensely concentrated to a select few producers, there will be inefficiencies moving in the opposite direction as well. i do not view burgundy as a region of constrained supply, but of abundance. lucky for me i guess.
But if you’d told people five vintages ago that Lachaux pricing and demand would be where they are now they would have thought you were nuts. And there are lots of others that are trying to follow the Lachuax model.