Bordeaux's first-growths make their entrance

Châteaus Lafite, Mouton-Rothschild and Margaux release 2010 futures; Cos-d'Estournel lowers its price

Bordeaux’s 2010 futures campaign seems to be building to a crescendo this week, as first-growth châteaus Margaux, Mouton-Rothschild and Lafite Rothschild finally released their prices, along with several other prominent châteaus. Château Latour and Haut-Brion remain the lone first-growths to release their prices, along with a remaining handful of other prominent châteaus including Cheval-Blanc, Pétrus, Pavie, Angélus and others. (This story will be updated as new pricing is released.

The predictable nature of the campaign, which has seen most châteaus posting price increases of 10 to 20 percent over the 2009s (which at the time was the most expensive futures campaign in history), was continued by Margaux and Mouton, who both released their wines June 28, with both offered ex-négociant at 600 euros per bottle (or about $860), up from 550 euros for the 2009s. Major négociant houses reported solid sales for the first-growth wines. (The ex-négociant price includes the négociant's markup. By the time the wine goes through an importer, distributor and retailer for American consumers, the price will rise even further.)

“There is solid buying interest in Margaux, as well as for Pavillon Rouge [the estate’s second wine]," said Mathieu Chadronnier, general director of CVBG, one of Bordeaux’s major négociant houses. “For Mouton, the interest is clearly there as well. But as it is only the first tranche, with a small quantity, offers take more time to get out.”

The next day Lafite followed suit, releasing its wine at 600 euros per bottle. La Mission-Haut-Brion also released at 600 euros, putting the property across the street from Haut-Brion at the same level as three first-growths. In St.-Emilion, Château Figeac released at 168 euros, up 5 percent from the 2009 vintage.

While most châteaus have raised prices this campaign, two prominent second-growths decided to cut—Château Cos-d’Estournel in St.-Estèphe (198 euros, down from 215) and Château Ducru-Beaucaillou in St.-Julien (150 euros, down from 180 for the 2009). But buying interest did not seem to increase despite the wines’ potentially classic quality. One possible reason: Both properties dramatically raised prices last year, which left some customers grumbling.

Interest in Cos was reportedly sluggish. One major négociant chose not to comment directly on the sales of Cos, saying only, "It's really scores, brand reputation and worldwide brand recognition [that move the wine]. Just dropping prices isn't a guarantee to move the wine. The châteaus that went from 80 to 200 euros in the last few vintages have really slowed down this en primeur campaign. The difference in '09 was the fact everyone was jumping back into the market after being away for a few years and so the buying was more widespread."

Other prominent châteaus who released prices this week include Pomerol’s Vieux-Château-Certan at 180 euros (its 2009 came out at 156 euros) and La Conseillante at 150 euros (up from 138). Margaux’s Château Palmer released its 2010 at 215 euros, flat vis-à-vis the estate’s 2009 price.

While buying interest in Asian and other markets was helping to bolster demand, the American market seems to be more mercurial thanks to economic difficulties and clear fatigue with Bordeaux after the much-hyped 2009 vintage.

“With the prices now, it just doesn’t make sense to tie up capital for a few years in wines that won’t be here for a while,” said Tom Gannon, wine director at Rothmann’s Steakhouse, a Wine Spectator Best of Award of Excellence winner in New York. Gannon noted that Bordeaux is his second-best selling category of wine behind Napa Cabernet. But, “there’s no reason for us to buy futures. For Bordeaux to put on the wine list, it’s easier to plumb collectors' cellars for back vintages or take in stock of off years that are drinking well now.”

Others were even more blunt. “Customer interest is near nil, on all accounts,” said Daniel Posner, owner of Grapes The Wine Company, an independent wine retailer in White Plains, N.Y.

But others say the U.S. market is showing signs of life. Michael Binstein, CEO of Binny’s, said the buying interest is strong for the 2010 vintage, so far. “The interest is mostly in the classified growths and well-reviewed wines. But it’s surprisingly strong considering the economy," said Binstein. "Right now I think it’s stronger than it was for the ‘09s. But it’s still early so the jury is out."

Binny's has 27 locations, which bring in $250 million in revenue annually, and Binstein said competition for Bordeaux has grown. While fewer retailers are carrying futures today, those that do sell to dedicated Bordeaux buyers who go looking online for the best source. “Ten years ago there was a local market and we only had to compete on price for Chicago,” said Binstein. “Now with the Internet we have to compete on price with the world market. So if people are saying there is no interest [in Bordeaux futures], I would have to ask at what price are they selling the stuff? It’s really become as competitive a segment as California Chardonnay.”

While prominent châteaus were taking marginal increases or even some decreases for the grand vins, there were also several noticeable price jumps for the estates' second wines. Ducru-Beaucaillou’s second wine, Croix de Beaucaillou, was being offered at 33.60 euros ex-négociant, up from 25.80 for the 2009, while Petit Mouton (the second wine of Mouton-Rothschild) nearly doubled, from 60 euros to 108 euros for the 2010. A day later, Château Latour released its second wine, Forts de Latour at 162 euros, up from 89 euros for the '09, an 82 percent increase (it had yet to release the price for its grand vin).

Chadronnier said interest has been big for the second wines. While prices have gone up, the wines seem far more attainable than their big brother first wines. With top chateaus making stricter selections and increasingly focusing on the quality of their second wines, they seem to be garnering more and more attention among value seeking buyers.