At $1200, I’m not sure it’ll keep up with inflation.
This is only about 12% higher than what the ‘09 Latour sold for En Premieur…10 years ago! Methinks they could have earned orders of magnitude greater than a 12% return over the past ten years. At those prices, Latour should have released all of their ‘09 stocks en primeur. 10 years on, what was the opportunity cost (SP500 has tripled in value) of this strategy? $200 million?
Things have changed a little since the early Summer of 2010, which was the height of Chinese buying in Bordeaux. Prices were rising in the secondary market, and the estates were pushing limits to see how high prices could go. Never mind that the Chinese were not buying futures at the time, this was the first great Bordeaux vintage since 2005, the pressure to buy was palpable.The market was challenged and it took around five or six years before the 2009s were sold through, in fact there was a report a couple of years ago about how high stock levels were of 2009/2010, but that could well be attributed to negotiants holding onto stock.
Compare that to what we have now; a glut of great vintages, 2014/15/16/18 and 19, with 2020 just picked being talked about in hushed tones of delight. Six vintages, no less. And Lafite can be purchased for far less than this Latour, even the 2018 with its special label.
The Chinese market is stagnant, and although there has been some fine wine buying, it does not seem to have affected this part of the market much, if at all.
Personally, I liked Latour, gave it a 96-98, but it was not in my top five wines of the vintage. I can buy Lafite from any one current vintage for around half. So I am kind of curious as to why I would spend money on a Latour from a fine vintage, but in my book, certainly equaled by most of the current first growths at a premium?
I’m with you. There are just other options in the vintage, that are equal in quality (or better) at a lower price. Of course, if money is no object, I would buy it. Re quality: On Cellartracker, it holds #1 spot (average rating) in the vintage, although from only a handful of reviews. I had an extensive 60+ 2009s tasting last year (all blind) and it was certainly one of the top wines (although not yet close to being ready) and ended up on a shared 6th rank (together with other wines I scored 95), behind Margaux, Palmer, Mouton, Cheval, Hosanna and VCC (all 96 to 99). Our group ranked it on a shared 7th rank together with Hosanna, Petrus and SHL (tops were Palmer, Cheval, Margaux, Mouton, VCC, Lafleur in that order).
Isn’t this sort of always part of the deal for first growth Bordeaux? You are paying for name and prestige in addition to pure quality. There are many wines qualitatively equal to the greatest wines in the world available at $300 a bottle or less, but first growths basically never sell for less than $400-$500 a bottle even in off vintages.
Yes. I was responding to Jeff Leve’s post that it was such an incredible vintage for Latour. It was certainly a very good wine, but not the best wine at Primeur. In fact, for me the vintage character eclipsed a little bit the purity that a great Latour has.
I even decided to compare like with like, Latour against the other First Growths, but if we are talking super seconds, there were plenty of wines I scored at the same level or better. Latour, by its very presence on a table, has ancillary benefits, but they are the the same benefits that Lafite, Margaux etc has. So for me, this is an overpriced offering, an easy pass, and tone deaf in these times.
I thought about this for a few min (buying a few bottles) but quickly came to my senses.
Just curious Mark - what other '09’s did you like better or do you think are equal but better values? (I have a six pack of VCC if that is one)
Cheers
Margaux, Montrose, VCC, Trotanoy, Cheval. Mouton was also fine, but pales alongside the magnificent 2016. Also great were Petrus and Lafleur, but perhaps not better values.
The incredible buy of this vintage was Haut Bailly.
Thanks… I have the Montrose (and Pichon Baron and Conseilliente, and then a bunch of more mid level ones). Will watch for opportunities to backfill on a few of the others. Cheers
Not anymore 
To both your points, I think what changes matters is the fact Chateau Latour did not participate in the en primeur market starting with the 2012 vintage. If they had been in the market, they would have been forced to adjust their pricing downward significantly and would be in the same position as the other first growths right now.
It was a bold move, and I do not know if it is paying off or not, but it would appear to be so given the fact Latour has not deviated from its current course.
This is the kind of thinking that comes into play when you have a product that can be viably marketed to a wide audience as a luxury branded good. That Latour is a great wine with a storied reputation is a must-have - but now you have a marketplace that is really unprecedented in the entire history of fine wine as we know it. Sure wines of different regions, and wine itself, has had low and high tides of demand over the centuries- but we are at a rare point in history where wealthy individuals worldwide, self-made as well as those of noble class, have a strong interest in wine as a status symbol and investment as well as an enjoyable beverage.
What Latour has done is what a couple of champagne houses have been trying, with limited success, to do in the last few years- and what many luxury goods companies have done for a very long time. Namely, they are taking a further degree of control over distribution in order to sustain a price level that not only makes that strategy viable but also preserves the value of the product for their customers, many of whom are either investing in the wine or at least will take comfort in seeing a sustainable value as well as a certain rarity factor.
Consider the great chateaux of Bordeaux in general for another example of this. If you look back a few decades for comparison you will see that in the last 20-25 years the top chateaux have become more selective in the vineyards at harvest time. Less of the harvest goes into the grand cru bottling. There is less supply. This is why you see such a proliferation of second and third labels now. The simple fact is that you make more money if you make 8,000 bottles of a wine that gets a 98 point score from a trusted critic than if you make 10,000 bottles of that wine with a less stringent selection and risk getting a “mere” 93 or 94 points. Then of course you get the added revenue from second and third label wines with juice that used to be included in the top blend.
Latour is just going a step further with it. As to whether it is viable long term- we shall see. I can tell you that in the world of luxury goods, supply control to meet or not quite meet demand in a given market is a very important consideration. Every year, most of the major luxury fashion houses burn 1,000s of articles of clothing and accessories rather than sell them at a discount. It seems horribly wasteful, and in a way it is, but in the long run that is more profitable than putting things on sale and unintentionally training many of your customers to wait for a sale versus paying full price.
In the case of the Bordeaux chateaux, unlike most of the other top wine makers of the world, ownership at the top levels tends to be a matter of social prestige as well as a money-making enterprise. Owning Chateau Latour is like owning the NY Mets or the Dallas Cowboys. There is a lot of profit potential there, but there is also the social prestige of ownership and the need/desire to maintain the reputation of the brand that equals or excels the need to meet certain profit targets or to ensure annual profit growth. In these circumstances, the norms of running a big business go out the window.
Tom,
I am absolutely sure it has paid off. Engerer is clever; he went to his late release policy having raised the prices of Les Forts and Latour Paulliac to bring in pretty much the same income as Latour and the other two had originally brought in. This was probably enough to take care of all the costs at the chateau, and now the income from late released Latour is all gravy.
He always struck me as being calculating and quite cold, but nobody can deny his brilliance.
One counter is that at last year’s Farr 10-year retrospective, the Latour not only finished as the highest scoring wine of the vintage, it scored the highest of any wine ever at their 10-year retrospective.
As you haven’t really responded to the information that the release price isn’t far off recent market activity for this wine, including auctions, it seems your objection boils down to bemusement that buyers would pay so much given the alternatives. I certainly wouldn’t, but I’m not the target market for first growth sales. I don’t know if $1200-1300 is the market clearing price currently for, let’s say, the 500 cases being released, but it seems a little early to accuse Engerer of greed and bullying.
My guess is that the release of the 2010 next year is even higher, given that the market price is higher than for the 2009.
I thought I had responded quite fully. I was saying it was a completely different market to 2010.
In relative terms; the cost for first growths is basically half that of 2009/2010. In absolute terms, with no Chinese demand, COVID, and relatively little demand for recent vintages, it seems absurdly priced. As for Engerer’s greed, he knows that his distribution are almost obliged to buy at whatever price he comes up with. I am not sure what else you need.
This is a toy to be milked, from a financial point of view a footnote buried really deep in corporate reports. I would guess that total revenue from Latour is not remotely 1% of the Pinault group’s income. Come on, this is Yves St Laurent, Gucci, Balenciaga. Latour is nothing (unless you happen to like wine).
Dan Kravitz
18,000 cases of this wine.
That’s 216,000 bottles.
1,230 bucks per bottle.
Seems like a few bucks.
Their second wine is Les Forts de Latour.
11,000 cases.
132,000 bottles at about 300 a bottle?
Almost 40 million just with that bottle!
Your numbers are way off. Latour produces about 11,000 cases of the Grand Vin each year. The price you’re looking at is retail, not wholesale. Latour gets between 50/60% of retail.
At 50%, if they sold every bottle that is about 70 million dollars. A lot of money. But when you consider that the entire company of Mr. Pinault brings in maybe 18 Billion Dollars a year, it’s a small drop in a very large bucket
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You are confusing revenues and profit. As I said the sales of Latour 2009 are almost all profit, as sales of Les Forts and the third wine probably take care of operating costs. I am closer to $800 a bottle ex chateau allowing for usual negotiant and retailer margins, which brings in around $1billion about half of the overall profit LVMH made during the last six months which have plunged thanks to Covid.
Check your math … Even at $800 (which seems high given the typical mark ups seen in the 3 tier system), 11000 cases is just over $100 million in revenue. As Dan said, this is mouse nuts when looking at the total revenue of all of Pinault’s enterprises.