Mixed bag for en primeur Bdx17 sales

Interview with Sarah Phillips of Liv-Ex.com 

13 June 2018

A wine market specialist explains the challenges of selling Bordeaux futures in this 2017 vintage campaign. Prices are the key issue of course: Is it worth your while to lock in hard-earned money on wine that you will not see as a final product for up to three years? What if back vintages of comparable quality are already available and cost less?

I just got off the telephone with Marielle Cazaux of the famous Château La Conseillante in Pomerol, whose wine was released today for €141 per bottle: a 20% drop in price from the futures offering last year.

The drop in price is welcome, but Cazaux said that the 2017 futures campaign is “complicated” ; she much prefers choosing harvest dates than choosing wine prices. Cazaux appreciates the work of Liv-Ex, which merchants use for trading, data and settlement services to help grow their wine businesses. Liv-ex’s global network helps people to trade safely and efficiently with other merchants worldwide. Its comprehensive data brings transparency to the market, and offers valuable insights to merchant members and their customers.

Interview with Sarah Phillips of Liv-Ex.com 

In this interview Liv-Ex’s Sarah Phillips (photo above), explains that we journalists can be stuck between a rock and hard place (that’s awfully understanding of her!) and that secondary market activity for back vintages has reached near record highs in the last two weeks. She gives valuable insight to the ongoing en primeur campaign.

Why is the campaign so far a “mixed bag”? 

“There is no hard and fast rule about whether buying En Primeur is a good or bad idea; collectors are advised to consider each release individually. So far this year, several wines have been released at high premiums to other vintages in the market. Grand Puy Lacoste is an example of this. It’s being offered in the UK at £648 when you can buy the 2014, which is scored higher and is already bottled, for £480; or the 2012 for £400. It just doesn’t look compelling despite the Chateaux being widely known for producing great wine.

Only a handful have done much better. Calon Segur and Beychevelle, for example, was offered below most other recent vintages and has reportedly sold well.”

To what extent are wine writers to blame for overhyping Bordeaux in a given en primeur campaign? 

“Writers can be stuck between a rock and a hard place. Good news is ‘overhype’; bad news is ‘Bordeaux bashing’. The writers that strike a balance and report honestly seem to be recognised and trusted by the trade and collectors. Today, there are several very good publications that appear to be reporting honestly.”

Can you chart on a graph or table how well this campaign is doing so far as compared to previous campaigns or an average of sales in the last 10 years of en primeur? 

“Anecdotal evidence suggests that this is more ‘2013’ than ‘2016’ … “

Given the significant number of wines on stock from previous vintages, how can Bordeaux do better to make futures pricing more competitive? 

“If the Chateaux want to sell their wines through to the end collector – and that is a big ‘if’ – they need to consider the current value of vintages already in the market and price accordingly. For wines with a strong correlation between price and score, Liv-ex’s ‘fair value’ methodology is a helpful guide. For other wines, the current prices of similar recent vintages, such as the 2014 which is still widely available in the secondary market, could be taken into account.

It isn’t enough to simply look at the discount (or lack thereof) on last year’s release. If that was also priced badly for the consumer, it’s not a useful benchmark.”

To what extent do “high enough” futures prices encourage back vintage purchasing? 

“Secondary market activity has reached near-record highs in the past two weeks, which does suggest that buyers are shopping around somewhat – or are simply disengaged from the current campaign.”

Which wines have been selling so far the best? 

“Calon, Canon, Carmes Haut Brion, Beychevelle, Lynch Bages and Pichon Lalande (Comtesse) have reportedly sold well.”

And which the least? 

“There are too many…”