Latour getting out of the futures business

[Nick_Gangas]

@Lewis Dawson

@Nick Gangas

I think the last desperate move right before the bubble bursts is to try to prevent the bursting. This sounds to me like Latour is not liking what it sees and is trying to adjust.

Nick, I’d agree with that for a monopoly or oligopoly or disciplined cartel. But in a competitive market, and I think Bordeaux is one although with some amount of cooperation, the last desperate move before the bubble bursts is every man (or chateau) acting for himself and his own financial interest. That is why bubble bursts tend to be so steep and violent. Just my $0.02.

Well this is where we disagree then. I don’t consider the first growth market very competitive. I’m also not saying this will work by the way. Your other point of being a risky strategy is correct. If it works though they will be supreme again. IMHO.

[Patrick_Stella]

I’m amazed there hasn’t been more discussion of the stated age range at which the wines are to be released. Put it this way: what would you say is the youngest great vintage that is really ready to drink? 200? Not even close. 90? Still every bit a baby, if not unenjoyable. 82? Still really young. 61? Some people say it’s a crime to open it now… I think it’s going to be very awkward if they start releasing wines at 5 to 10 years of age, smack in the middle of the shut down phase, when only very few people have tasted them in their extreme youth with the baby fat still on. I think consumers might be sorely disappointed when they get bottles advertised as “ready to drink” that are anything but.

Also, just my $0.02, but I do not expect current vintages to have the same price appreciation from release to 10 years of age that vintages like 00 and 03 and 05 did. I think most of the juice is out of that trade.

[DougS]

@Lewis Dawson

when I was buying Bdx futures, from 1982 up through the 1990 vintage.
(…)
Latour is counting on newbies who have recently come to the Bdx market, and don’t have that older vintage in their collection. I think a strategy of churning your customer list is fraught with risk. Just my $0.02.

I isolated these statements because I think the first couple might be valid arguments against the point you make at the end. I think there are a lot of people who have been buying First Growths for some time who stopped at or after 1986 or 1990 or 2000 or 2005. I wonder how many people who are now buying these wines are relatively new to the market. I think it’s a very significant percentage that is growing greatly each year. So, by doing what they’re doing (and I’m not really disagreeing with what that is, only with whether or not it’s a good idea), maybe they are making a decision that is well suited to the marketing of their wine to the majority of the current and (vast majority of the) future customer base.

[Keith_Levenberg]

@Patrick Stella

I’m amazed there hasn’t been more discussion of the stated age range at which the wines are to be released. Put it this way: what would you say is the youngest great vintage that is really ready to drink? 200? Not even close. 90? Still every bit a baby, if not unenjoyable. 82? Still really young. 61? Some people say it’s a crime to open it now… I think it’s going to be very awkward if they start releasing wines at 5 to 10 years of age, smack in the middle of the shut down phase, when only very few people have tasted them in their extreme youth with the baby fat still on. I think consumers might be sorely disappointed when they get bottles advertised as “ready to drink” that are anything but.

Also, just my $0.02, but I do not expect current vintages to have the same price appreciation from release to 10 years of age that vintages like 00 and 03 and 05 did. I think most of the juice is out of that trade.

This is a great point. Maybe 5 or 6 out of 10 vintages will allow them to release “ready to drink” wines when they’re only a dozen years old or so. The rest of them require not just years but decades. Maybe they’re willing to do that (hey, Lopez and Pepe do) but that’s an even more radical departure from the traditional Bordeaux model than any of the press coverage has hinted at.

Good to see you posting here Patrick - stick around!