Today we're changing things up. Instead of writing about inexpensive wine, I'll be writing about the finest of the fine wines, Bordeaux. For those who don't know, Bordeaux is one of the most prestigious, perhaps the most prestigious wine growing region in the world. It's so valuable that some people trade it as a commodity. The acronym SWAG: silver, wine, art, and gold is used to describe the leading alternative investments. Essentially what rich people do with their money other than invest in real estate, stocks, and congressmen.
The En Primeur system is one where merchants and wine critics taste wine that has not even been bottled yet. The critics give their impressions of the wine and merchants try to sell it. The sales is part of the futures market. Customers buy wine that has not arrived yet to secure their allocations, as some things sell out before they ever reach American shores. Buying early has traditionally been a way to get the best price on the product. It's good for the merchants because it reduces the risk involved in bringing in large allotments of said product. The merits of any system that involve judging a wine meant to age for decades before it is even bottled are certainly worth a healthy dose of skepticism. In fairness, critics do routinely retaste and rerate the wines later on. Though I do not recall any critic coming out and saying, "I was wrong about that wine I rated 95. It is absolute plonk." A critic who did so who likely not be invited back, thereby missing his annual French vacation.
There is a running joke that in Bordeaux they have the vintage of the century every five years. Part of the mystique of Bordeaux, Burgundy, really anywhere in France that makes great wines is that the weather there is very unpredictable from year to year. The Bordelaise can go for years at a time without cooperative weather and that hurts the potential of their wine in off years. When they do have a great vintage, which works out to be about every five years more or less, they and the fans of their wine are jubilant. And they should be. A mediocre vintage in Bordeaux makes better wine than most of the world can make in the best of years. A great Bordeaux vintage makes wine that is transcendent. Wine from the best vintages can age and improve for decades. My first really old bottle was a 1970 Mouton Rothschild. It was one of the best things I have ever tasted, even though it was a few years past its primed.
2009 and 2010 saw a rare occurrence of back to back "vintages of the century." 2009 was a hot year that lent itself to a fruit forward style of wine. The wines are great but many traditionalists complain that the vintage is in a style more like that of the New World. That make it very accessible for those who are not necessarily aficionados. 2010 was a much more classic year. The two vintages showed everything Bordeaux has to offer. It blew the doors off Bordeaux in terms of demand and pricing.
The Chinese market had already started to show interest in wine as an investment opportunity. That interest exploded, as did the prices of Bordeaux wine. Prices spiked to insane levels. Investors all over the world wanted a piece of the action.
Bordeaux's winning streak ended in 2011, a year that brought terrible weather and wines of a much lower quality than the previous two vintages. It did not bring lower prices. This happened again in 2012 and again in 2013. The Bordelaise simply refused to price their products according to quality. The market did not immediately abandon them, though many collectors and merchants did grumble about unfair pricing. While all of that was going on, some less than scrupulous individuals began to notice that it is not all that hard to make a wine label. Forgery is a problem in any collectible market and fine wine is no exception. The highly publicized case of Rudy Kurniawan showed that the problem was worse than most had guessed. The man produced so many forgeries by so many different methods (sometimes refilling valuable bottles of wine with cheaper wine, sometimes buying older, less expensive wine from the same region and vintage as more valuable wine and forging new labels) that it was actually kind of impressive. His operation produced an indeterminate number of very good fakes. It believed that he had accomplices because, and this cannot be stated enough, the sheer volume of fine wine he forged seems to be beyond the capacity.
Going forward, many wineries are now employing methods to make fraud more difficult and any auction house worth dealing with has enacted stronger fraud detection measures. That is a whole study in and of itself. Unfortunately, many collectors had already been duped. The realization that their fine wine cellars were, potentially, filled with worthless fakes turned many an investor off to the fine wine market.
Around this time, the Chinese government started to crack down on corruption. French wine was seen as part of the culture of corruption there and fell out of fashion
This odd constellation of factors meant that the wine markets essentially collapsed. A case of 2009 Lafite Rothschild sold for $18000 in 2013 could be had for as little as $12000 earlier this year. Some retailers began to dump inventory, selling high end wine well below cost rather than wait for buyers to cough up yesteryear's premiums. Prices seemed to be in free fall.
It did not help that the Bordeaux craze had changed the way people collect wine. It was no longer a long term investment. It had become something people expected to flip in a few years. When the craze died down, those buyers were left with a lot of product that was not hard to get and that would not rapidly increase in value. The fact that very few people were actually drinking the stuff did not help anything either. If there is the same amount of something in the world this year as there was last then the value probably will not increase.
2014 brought hope. It was a good, though not great year in Bordeaux that had the promise to produce affordable wine that would not need to be cellared indefinitely to be drinkable. The pressure to moderate pricing was strong. The Western market wouldn't stand for inflated prices anymore and the Chinese were no longer buying like they used to.
Robert Parker, the world's most influential wine critic, announced well ahead of time that he would not be attending En Primeur. It is difficult to explain the scope of Parker's influence in Bordeaux. As an up and coming wine critic decades ago, Parker instituted a 100 point rating scale for wine and that scale has become the industry standard. He emphatically declared that he cared only about what is in the glass, not the prestige or history of the producer. This was a huge blow to a number of wineries that had been essentially coasting on their prestige. He also likes big, bold, fruit forward wines of the California style. Many traditionalists have complained about the Parkerization of Bordeaux as wine makers scramble to adjust their style to meet Parker's tastes. Parker appointed the wine critic Neil Martin to go to En Primeur in his place. I don't have any strong opinion about Martin, and that's the problem. I am sure Martin is a competent wine critic but he does not have the legendary status of Parker. I don't know that Parker's absence hurt En Primeur, but it surely did not help.
The wines were released with more reasonable pricing than in the past and there were some real success stories. It is a great time to buy Bordeaux. Wine from houses like Beychevelle, Smith Haut Lafite, and even Cos d'Estournel can be had at the best prices we have seen in years. But the thrill is gone. Lafit Rothschild, one of the most sought after wines, has released only tiny allocations. It is, I suppose a good marketing tool, creating a lot of scarcity for their brand. But it has had a cooling effect on Bordeaux as a whole. Some of the other great houses, namely Cheval Blanc, Petrus, and Le Pin have yet to release, but the allocations are likely to be small and prices high.
Had the the top Chateaux released a little more quickly and a little more cheaply there might have been some real enthusiasm and urgency. But they didn't. The slow allocations, the lack of celebrity, and the ambitious pricing of certain houses has left the En Primeur campaign stuck. The vintage that should have heralded Bordeaux's grand return has largely been greeted with disppointed head shakes and shrugs from potential buyers.
This is, of course, not the end. Bordeaux has been through tough times before. A string of bad vintages in the 1970s left the region on the ropes and it did recover. The Bordelaise are a stubborn lot, but they have staying power that few can match and I have no doubt that, between their unparalleled expertise, excellent terroir, and that sheer cussedness peculiar to the French, they will find their way back. When they do, I will be glad that I put away some 2014s for long-term aging.
