{"id":6095,"date":"2023-05-09T03:37:30","date_gmt":"2023-05-09T07:37:30","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/bordeaux-collectors-await-prices-for-a-unexpectedly-good-vintage\/"},"modified":"2023-05-09T03:37:30","modified_gmt":"2023-05-09T07:37:30","slug":"bordeaux-collectors-await-prices-for-a-unexpectedly-good-vintage","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=6095","title":{"rendered":"Bordeaux Collectors Await Prices for a Unexpectedly Good Vintage"},"content":{"rendered":"

Wine merchants and collectors are awaiting the first releases to the market from producers in Bordeaux to learn the cost of buying the unusual\u2014and many say shockingly outstanding\u20142022 vintage.\u00a0<\/p>\n

The weather last year in France\u2019s famed wine region was searing hot and extremely dry. Italy-based Saturnalia, which uses artificial intelligence and satellite data to assess wine regions, found average temperatures in Bordeaux rose above the average of the previous 10 years 83 times during the growing season, and that rainfall was 7% less than normal.\u00a0<\/p>\n

\n

Saturnalia predicted the wines would have issues in both \u201cquality and quantity.\u201d\u00a0\u00a0<\/p>\n

In quantity, that\u2019s certainly true, with total production off 15% compared to the 10-year average, although it\u2019s up from last year, according to \u201cBordeaux 2022\u2014A double-edged sword,\u201d a report from Liv-ex, a London-based global marketplace for fine wine.<\/p>\n

In terms of quality, the scores rolling in so far are impressively high. The Wine Advocate, founded by Robert Parker, gave three wines its top score of\u00a0 99-100\u2014Ch\u00e2teau Canon, Les Carmes Haut-Brion, and Montrose.<\/p>\n

The wine critic Janis Robinson had expected the vintage\u2019s tough conditions to produce wines that \u201ctaste soupy and as broiled as the surfers in Arcachon, Bordeaux-by-the-Atlantic were last summer.\u201d Instead, many of the wines showed \u201camazing freshness,\u201d Robinson wrote after returning from tasting wines in Bordeaux during en primeur<\/em>, or futures week, when producers provide barrel samples for critics and merchants to taste.\u00a0<\/p>\n

Independent French critic Jean-Marc Quarin was similarly surprised, gushing about the wines in his en primeur <\/em>report. \u201cThis vintage surpasses all known points of reference,\u201d Quarin wrote.\u00a0<\/em>\u201cThere is no obvious logical or scientific explanation for this level of quality, and many winemakers have been humble enough to hold up their hands and admit that they are stumped.\u201d In his view, \u201c80% of the wines I have tasted are the best the estates have ever made.\u201d\u00a0<\/p>\n

That said, the full picture of the vintage has yet to emerge as critic scores are still coming in. Many have also observed that the wines are not homogeneous, meaning, while some are excellent, others fall short. There is some question, too, of the vintage\u2019s longevity considering how full of fruit and drinkable the wines are today.\u00a0<\/p>\n

\u201cWill, in 10, 20 years time, all the wines be singing in the same way? Probably not,\u201d says Justin Gibbs, Liv-ex\u2019s deputy chairman. \u201cSome will move more rapidly through their life and others might well last the 50 years of great Bordeaux. But what we do know is that we\u2019ve got a vintage that everyone\u2019s excited about.\u201d\u00a0<\/p>\n

With such unexpectedly good wine emerging from a year of bad weather, producers will likely release the wines to market at prices at least 20% higher than last year, Gibbs says. That\u2019s because the 2021 vintage wasn\u2019t as good as 2022 appears to be, so it would be difficult to price it for less.\u00a0<\/p>\n

The problem with a significant price hike, is that the market for Bordeaux, generally, has been slow and \u201cdrifting,\u201d he says. Activity has dried up in the last three months after several years of strong prices in the face of macroeconomic headwinds, including inflation and high interest rates.\u00a0<\/p>\n

\u201cYou have a market that\u2019s basically feeling a bit tired and a bit risk averse, and yet you have this great vintage, in theory coming to it,\u201d Gibbs says.\u00a0<\/p>\n

Collectors will begin to get an inkling of prices when Ch\u00e2teau Cheval Blanc releases its wines as early as Tuesday, followed by Ch\u00e2teau Leoville Barton, likely on May 11, and Ch\u00e2teau Beychevelle on May 14. These ch\u00e2teaux are \u201cwhat you might call bellwether stocks that will give us an idea of how well this vintage is going to be received,\u201d he says. But the complete story won\u2019t be known until late June, when all the wines will have been released.\u00a0<\/p>\n

In the meantime, the negociants, who buy wine from the ch\u00e2teaux and sometimes produce it and sell it themselves, and the merchants, are excited, but they are also nervous, Gibbs says.\u00a0<\/p>\n

That\u2019s because their collectors, who often buy year in and year out almost by habit, are now grappling with interest rates that are far higher than they\u2019ve been for years, which is affecting their businesses and properties, and debt levels, he says.<\/p>\n

These collectors may be thinking, \u201c\u2018Quite frankly, I\u2019ve got a lot of wine\u2014it\u2019s a great vintage, but it\u2019s a very expensive vintage, relative to the recent past.<\/p>\n

Do I need it, or can I afford to wait?\u2019\u201d Gibbs says. \u201cWe don\u2019t know the answer to that yet.\u201d<\/p>\n

Traditionally, Bordeaux collectors preferred to buy wines en primeur<\/em>, that is, two years before it\u2019s bottled, because it\u2019s less expensive. Buying wines that haven\u2019t been bottled yet also enables collectors to request wines in magnums or other large formats.\u00a0<\/p>\n

But as Liv-ex details in its \u201cBordeaux 2022\u201d report, several factors have been upending the dynamics of en primeur<\/em>, and have made futures pricing less predictable. While a more diverse and ever-changing group of critics affects the market, the ch\u00e2teaux are also engaging in practices to maximize prices through the introduction of so-called recommended retail prices and by holding back supply from en primeur<\/em>, Liv-ex said in the report.\u00a0<\/p>\n

While such strategies may favor the producers, they aren\u2019t great for collectors, and could turn off younger buyers from entering the market. Those who have been collecting for 25 years or more are sitting on some great wines that they can sell for a profit, but collectors who began five years ago can buy the same bottles they purchased then at the same price today and not be out the added costs of insurance and storage, Gibbs says.<\/p>\n

That dynamic creates a big question for collectors this en primeur <\/em>season, Gibbs says. \u201cDo you need this vintage now or can you afford to wait to see how it turns out in bottle?\u201d<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Wine merchants and collectors are awaiting the first releases to the market from producers in Bordeaux to learn the cost of buying the unusual\u2014and many say shockingly outstanding\u20142022 vintage.\u00a0 The weather last year in France\u2019s famed wine region was searing hot and extremely dry. Italy-based Saturnalia, which uses artificial intelligence and satellite data to assess […]<\/p>\n","protected":false},"author":1,"featured_media":6096,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-6095","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBordeaux Collectors Await Prices for a Unexpectedly Good Vintage | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Wine merchants and collectors are awaiting the first releases to the market from producers in Bordeaux to learn the cost of buying the unusual\u2014and many\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=6095\" \/>\n<meta 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