Wine Talk

Snooth User: dmcker

Utterly absurd

Original post by dmcker, Mar 1, 2012.

A couple of news items I was pondering today.

First, Robert Parker came out with his ratings for the 2009 Bordeaux vintage. Ever the masochist, I decided to go look at some prices in the marketplace after the ratings were released. Some samplings:

2009 Chatau Latour                        100 points                  $21,500 a case

2009 Chateau Margaux                   99 points                   $17,500 a case

2009 Chateau Ducru-Beaucaillou  100 points                   $ 4,000 a case

2009 Chateau Pavie                       100 points                   $ 5,400 a case

2009 Chateau Palmer                       97 points                   $ 4,500 a case

2009 Chateau Pichon Comtesse      95 points                   $ 2,900 a case

2009 Chateau Leoville Barton           93+ points                $ 1,490 a case

2009 Chateau Troplong-Mondot        99 points                  $ 2,150 a case

2009 Angelus                                     99 points                  $ 4,925 a case

2009 La Clarence (Haut Brion 2nd)   92 points                  $   950 a case

2009 La Croix (Beaucaillou 2nd)        91 points                 $   580 a case

 

$333/bottle, current release for Beaucaillou? $1,458 for a bottle of Margaux?? $450 for Pavie??? $375 for Palmer???? We're supposed to feel we've scored a bargain with Leoville Barton at $124, or the worst 1st growth 2nd label at $79, or the 2nd of a 2nd at nearly $50????? Again, these are all current releases! None of these wines should be drunk for several years, anyway. And, BTW, these prices are on the low side of the market for each label.

So my question is, who's buying these? And why, when there's so much good wine from other areas at much saner levels of pricing, that will give at least as much pleasure (even though I'll admit I do have an unfortunate weakness for Latour, initiated back when it was affordable--unfortunate in that it can undo small fortunes if excercised these days!)? And what kind of thin-aired atmosphere do the Bordelaise want to try to keep living in? After the Chinese economic bubble bursts, good luck, I want to say, but the devil on my other shoulder then pipes in with 'tough luck, you've earned it'.

To put things in perspective, GregDP's series of articles on the $2500 and $5000 dollar cellars would be made totally irrelevant if someone wanted to buy any of the above. Personally, I'd *much* rather have his $5,000 cellar than a single case of the 2009 Angelus!

The second news item was a marketing director for a Wall St. firm, earning $350,000 a year, crying poor and saying he can barely consider himself a full member of the middle class, living as he does in Manhattan. In that part of that town, trying to keep up with the real players in those firms (marketing directors are just support team players, anyway, with no real playing time in the big games), I can almost commiserate. Especially if he wants to buy a bottle of good Bordeaux out at a restaurant (add their markups to the costs above)!   ;-(    But then he also probably pays a higher percentage of tax than Warren Buffet...

Replies

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Reply by JonDerry, Mar 9, 2012.

SS, i'm not sure exactly why wine is become more popular overall, though it seems to be grabbing the attention of younger people now more than ever.

D, a friend was telling me over dinner tonight that Japanese culture leans more toward European than American, and that many different languages are spoken, but English isn't one of the more popular amongst them.

Interesting quote from Mathilde Chapoutier...branching out from 1st growths and DRC only figures to be a logical progression i'm afraid.

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Reply by dmcker, Mar 9, 2012.

Jon, your friend obviously has virtues that warrant that friendship. However expertise on Japan is not one of them. At all. Would love to be in a bar with the person and have a discussion over a few drinks and hours. Would need more time and freedom of expression than is possible at most polite dinner parties, I'm afraid. And that would only be the beginning of that person's education if the comments you quote are representative. First half of the sentence only true in particular contexts (clothing generally yes at couture levels even if it would be hard to find any brand more popular than Marc Jacobs in the 30+ and below age segments, less so in fringe areas just below that, not at all down on much of the street; wine generally yes though transitioning towards New World areas even if glacially; food only with certain segments of the most expensive levels; etc.). Second half absolutely as false as you can get.

Hopefully the Chinese will get all tangled up in the complexity of that branching out, as the Japanese did before them--at least until the bubble bursts and the ensuing meltdown obviates their pricing pressure.

And regarding your (and sshim's) initial question, don't underestimate the power of the Internet....

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Reply by JonDerry, Mar 9, 2012.

To be fair, I prompted him. He's a Korean and I asked what other major asian cities he'd traveled to. Apparently, he didn't have a great time in Japan, or at least didn't get a representative look at it when he was there.

At least the more they branch out, the less impact per bottle/producer there figures to be.

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Reply by dmcker, Mar 9, 2012.

Though a generalization, still very true that Japanese and Koreans have an extremely complicated relationship. Understand much more clearly where he's coming from, though further surmise and analysis is for another venue. Obviously, he wasn't able to communicate well.

Regarding your second paragraph, that is the problem, though. Those emerging markets have so much room for growth that while further expansion occurs until any bubble burst they can have a big impact on prices across a relatively large number of bottles that get in their crosshairs.

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Reply by BrugmanRose, Mar 10, 2012.

A good discussion about the price of wines going up as emerging markets develop.

We have talked about the bubble bursting in China and how that will effect wine prices. As some of you have good access to wine prices data let’s see what you come up with to answer this question>

When I left Japan the spring of  1990 the country had been going  through an unwinding process well controlled since 1985. This is not the forum to discuss the Japanese economy of that time so I will only point out a few general ideas. It was in 1991 or a bit earlier that the housing market started to crumble and things started  down hill in a lot of ways. For the first time since WWII Large firms were have to slow down hiring high school and college students and inefficient workers were being left go of their jobs rather than parked in a area of work they could do but not be productive enough to earn their salary.

All this was a shock to the nation. IF we look at Bordeaux and Burgundy prices from 1975 up through 1989 we might see an upward trend. I say this because Japanese were buying the best of the French in those years. The question is where they buy sufficient supplies to effect prices world wide?

The first question really is: Did the Japanese demand put that much pressure on the supply to raise the prices by themselves or was it a combination of markets with flush capital cherry picking wines then?

But more importantly did we see a start or a slow transition of prices fall for the best of France from 1985 to say 2002? Or was there simply a leveling off of the prices and they maintained their heights?

This analysis won’t really put the finger on any one result that will explain everything. While the Japanese may have been buying less wine I would bet that the Chinese may have been buying a little more to slow the dissention  of prices from 1982 onward. So one effect is balance by the other.

To my projection. We may not see a real fall off on prices for the best of France at the vineyard level for the following reason.

  1. The Estates of Bordeaux and Burgundy have been making good capital for the last 40 years and so you would expect that unless they went on an expansion move that took every cent of their annual net  profit, they have plenty of capital to wait out the markets.
  2. The first people who will price down the wines will be the retailer if he has a lot of stock and needs working capital to operate in the near future.
  3.  The wholesaler who purchased too much stock in hopes of flipping it quickly now has to  pay off the loan from the bank or parent company. In Japan it could be a Yakusa [ Gangster }. Oh yes in the old world a legitimate company borrows from the Gangster when Banks would not lend or had too difficult terms to make the overall transaction profitable.
  4. The importer like the wholesaler who imported too much expensive wine and is having trouble selling it at high prices. If he needs capital then we will sell off some of his stock.
  5. It will be at these levels we see prices falling and so what happens in the Orient may not be reflective to all of us here because our importers bring wine in directly from France and so if the producers do not see a need or feel the pain to sell more at lower prices, you and I will not really see much change for three to five years or maybe less. Of course perhaps out local retailer speculated and is having trouble to raise cash maybe he will have a bonfire sale.

 

IF we had Star Treck Transporter capability today retailers in American could be buying form importers, wholesalers and retailers in troubled markets but we don’t. So we have to live with the distribution system we have and since all of them lead to the producers in Bordeaux and Burgundy we have to wait and see what they are going to do about their prices. Again if they have the capital to sit and wait we may only see a leveling of prices or small declines from time to time but not a massive drive downward of prices. Unless all these producers have been spending their money like drunken sailors these forty years and have to turn assets for capital.

 

What I think I am seeing in the market today and some of you have alluded to this, is the interest in importers to bring in wines from unknown producers and from areas where importing into America was not a common things. There are some very nice areas in France, Germany, Italy, Spain and East Europe where one can find some very fine wine and we may be able to enjoy them at reasonable prices until Wine Buffs start writing about them

 

The wine world has locked itself into seeing wines as good wines if they only come from specific wine areas of France, Germany, Spain, Italy, Australia, New Zealand and South Africa. People of interest are now venturing out over the next hill to say to see what is being made there. And I think we will find a lot of very good wine being produced in these areas. However the question is: Can they make enough to export at prices that make sense profit wise for the producer and can they ship it at a price that does not push the retail price too high for an unknown wine from an unknown area?

 

If you are a retailer or restaurateur start asking your wholesaler and even go directly to your importer and see what little nuggets of wine they are bring in to sample the market with. Try to be the first to get these new wines if they make sense to you and your market. If you wait for the salesman to inform you about these little nuggets the importer brings in, it may be two or three years before sufficient supply is imported for the importer to introduce the wine and sell to your market area. Don’t wait for that because prices will be higher in most cases. Buy when prices are low and this allows you to build a market with less capital expenditure.

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Reply by Giacomo Pevere, Mar 10, 2012.

Very interesting Brugman, thank you.

I Don't think Burgundry and Bordeaux top wines price will decrease next years, little production and luxury market can easily buy everything. Chateaux Margaux is like a Ferrari, somewhere there's someone who can buy it. The problem is everything around that top bottles. As i say before somewhere in this thread i find in wine stores bottles of wineries without history, without prooved quality, without name/label but with high price. Why? Some of that just try to follow some more famous wines from the same appelation, one example is Bolgheri, world famous for Sassicaia but that doesn't allow any other winery in the same place to sell wines with the same price, at least not until you have fully tested the quality of YOUR wine. Another reason are bank loans. About that wines i can suppose next years we are going to see the prices slowly go down. The reason is really simple, i'm surely not buy a unknow bottle for the same price of a Sassicaia (the same idea works well with Burgundry, Bordeaux and many other wine regions) for this high price i must buy something i know and with the right value. We are going to see a lot of unselled wine from this wineries.

 

 

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Reply by JonDerry, Mar 11, 2012.

The pricing of Bordeaux is interesting, since it's so variable from year to year depending on the strength, or perceived strength of the vintage. Pricing for 2010 will remain high, similar to 2009 pricing, while the 2011 vintage will come back to earth quite a bit. Why would the market be willing to pay anything close to the levels of 2009 & 10, when there's so much inventory available? What's more, the 2008 vintage is every bit as good and likely better, and also a few years closer to maturity. I've heard some experts say the pricing will have to be cut in half to attract buyers. Maybe 10% or so below 2008 pricing. 

The en primeur system for the chateau, selling to negociants, who then sell to retailers, obviously has one more (middle) layer than desirable for best pricing. This will likely change over time, as there are even some renegade Chateau selling direct to consumer! Chateau Bauduc is one example. 

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Reply by Giacomo Pevere, Mar 11, 2012.

Ratings of vintages is another somewhat controversial point, have you ever noticed that the evaluations of the vintages have changed a lot over the years? In the '60s and '70s was a single great vintage every 10 years, 2 at most. Now each vintage passes for the best of the century, it sounds kind of ridiculous.

Last example is Brunello 2007 rating, 5 stars, 2 weeks ago Brunello 2007 preview show that 5 stars was too much 3,5-4 was the real rate.

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Reply by JonDerry, Mar 11, 2012.

Absolutely Giac, there is more hype and more $ being thrown at wine now, so if there isn't hype, there aren't many sales. What may be happening now is these regions/producers are getting more money for their best wines, or above average wines, and much less money/demand for poor vintages. This will continue to drive the wine market to be more efficient, as consumers do more research with where they put their $ to work, and look beyond what the top critics are saying, looking for more of a consensus.

In Bordeaux this century, there have been 4 great, and hyped vintages already in 12 years. 2003 also received a bit of hype, but not anywhere near the acclaim of 2000, 2005, 2009, and 2010. 

With all of this said, isn't Bordeaux allowed to have a good run of vintages, especially after what may be considered a below average decade in the 90's?  I would say sure, but we have to look beyond top critic ratings, and read from more independent sources, who don't stand to gain from sales.

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Reply by gregt, Mar 11, 2012.

Giac - the best vintage of the century comes about every five or six years, but if you're willing to settle for a little bit less, the greatest vintage of the decade comes around more often. That helps the customer because if you missed out on the 2000s, which some call the best vintage of the 2000s, although others insist it was really the last vintage of the 1900s, you can pick up the 2003s, or if you miss those, the 2005s, or if you miss those, the 2009s, or if you miss those, the 2010s.  And that's just Bordeaux. Tuscany has had a few vintages of the century recently, so has Piedmont, and don't forget the Rhone.

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Reply by BrugmanRose, Mar 11, 2012.

My tea pot has some nice vintages from time to time as well.

I like your thought processes fellows, you seem to understant the markets well and the hype 5 Ave likes to put in the public face each year. I am enjoying these posting,  thank  you all.

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Reply by dmcker, May 5, 2012.

Another shoe drops (not 'the' other, since Bordeaux has more pieds than a gaggle of octopi). Prices from HDH Wine. 2010 now being positioned, so surprisingly, as the equal of or better than 2009 by certain marketeers. 2009/2010 as supposedly the best back-to-back vintages in history. Kinda like '59 and '61 if 1960 had just ceased to exist (or '45 and '47 excising that unneeded '46). Oh wait, are we seeing a pattern in the further industrialization of the Bordeaux marketing machine, by any chance, where they no longer can have any bad years, and where someone in a cellar over there is undoubtedly trying to come up with a superlative that tops 'best'?

Oh dear, better rush after that Latour, particularly, since it's the last year it'll be sold en primeur!   ;-)

And apologies for any formatting nastiness from the C&P....

 

 

 

Wine Rating Price 2010 Château Angelus 94-96+ WA

$4,435 / case

2010 Château Brane-Cantenac 93-96 WA

$1,110 / case

2010 Château Calon-Ségur 92-94+ WA

$1,150 / case

2010 Château Cheval Blanc 96-98+ WA

$17,700 / case

2010 Château Cos d'Estournel 95-97 WA

$3,900 / case

2010 Château Ducru-Beaucaillou 96-98+ WA

$3,045 / case

2010 Château Gruaud Larose 92-94 WA

$935 / case

2010 Château Haut-Bailly 95-97 WA

$1,800 / case

2010 Château Haut-Brion 98-100 WA

$12,900 / case

2010 Château L'Evangile 96-98 WA

$3,950 / case

2010 Château La Conseillante 95-98 WA

$3,000 / case

2010 Château La Mission Haut Brion 98-100 WA

$11,700 / case

2010 Château Lafite Rothschild 98-100 WA

$18,600 / case

2010 Château Latour 98-100 WA

$18,600 / case

2010 Château Lynch-Bages 95-97 WA

$2,150 / case

2010 Château Léoville Barton 91-93+ WA

$1,500 / case

2010 Château Léoville Poyferré 95-98 WA

$1,900 / case

2010 Château Léoville-Las-Cases 95-98 WA

$4,000 / case

2010 Château Malescot St.-Exupéry 94-96 WA

$1,225 / case

2010 Château Montrose 96-99 WA

$2,880 / case

2010 Château Mouton Rothschild 97-100 WA

$12,700 / case

2010 Château Pavie 95-98+ WA

$4,450 / case

2010 Château Pavie-Decesse 94-96 WA

$2,975 / case

2010 Château Pichon-Longueville, Baron 97-99+ WA

$2,575 / case

2010 Château Pichon-Longueville, Lalande 92-95+ WA

$2,690 / case

2010 Château Pontet-Canet 96-100 WA

$2,575 / case

2010 Château Saint-Pierre 95-97+ WA

$1,040 / case

2010 Château Smith-Haut-Lafitte Rouge 95-97 WA

$1,600 / case

2010 Château Troplong-Mondot 96-98+ WA

$1,925 / case

2010 Château d'Issan 94-96 WA

$995 / case

2010 Clos Fourtet 95-97 WA

$1,450 / case

2010 Vieux Château Certan 96-98 WA

$4,340 / case

 

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Reply by Gregory Dal Piaz, May 5, 2012.

Everyone is a winner. . It's like the special olympics out there.

Those 2011s are starting to look like they're gonne be bargains.

Seriously, does anyone actually buy these wines anymore?

 

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Reply by EMark, May 5, 2012.

My guess, Greg, is that people do buy them.  My question is, do they buy them to some someday drink, or do they buy them to on an altar and light votive candles in front of them?

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Reply by dmcker, May 8, 2012.

Now to put things in even clearer perspective, using prices from this day and age rather than the past, let's look below at predicted price ranges from an estate sale via HDH for some absolutely superb bottles of Bordeaux that're going to be a lot better than probably anything in the region from the past decade (esp 2009/10), considering the stage in their maturation--even leaving aside debate about whether any of the hothouse vintages of this millenium will have their worth proven by history.

The projected prices for these bottles (and HDH knows how to ramp them up to the pain point--they are after all an auction house, among other things) seem absolutely reasonable compared to what RP et al. have done to the fevered minds of current consumers/collectors who think everything should be fruit bombast drinkable NOW, damnit!--whether that wine should be drunk now or not--and somehow imagine that Bordeaux wines are something to pop and pour directly from the merchant, and will be heading downhill before a decade is up (so many such comments on CellarTracker make me snort any wine I'm drinking out my nose...).

If the condition of the cellar where they've been laying since the '70s is as HDH says, and it's their business to know and present honestly, these wines will be drinking more-than-fine right now.  If I were buying Bordeaux in the States right now, these are what I'd buy, not the froth on the marketing wave from current releases....

 

 

828 1961 Château Léoville Barton (1 b and 1 mag)   $750-1100 830 1961 Château Montrose (9 bs)   $4000-6000 831 1961 Château Montrose (12 bs) (owc)   $5000-7500 833 1961 Château Pavie (12 bs) (owc)   $1800-2800 834 1961 Château Pichon-Longueville, Lalande (2 bs)   $800-1200 836-838 1961 Château Rauzan-Gassies (12 bs) (owc)   $1200-1800 841 1962 Château Latour à Pomerol (1 b)   $500-750 844 1964 Château Canon (12 bs) (owc)   $900-1400 845 1964 Château Ducru-Beaucaillou (12 bs) (owc)   $950-1400 847 1964 Château Latour à Pomerol (12 bs) (owc)   $2200-3200 849 1964 Château Léoville Poyferré (12 bs) (owc)   $700-1000 854 1966 Château Pétrus (5 bs)   $3800-5500 858-865 1966 Château Batailley (12 bs)   $750-1100 866-869 1966 Château Beychevelle (12 bs) (owc)   $1000-1500 885-888 1966 Château Ducru-Beaucaillou (12 bs )   $1200-1800 901 1966 Château Lynch-Bages (12 bs) (owc)   $1000-1500 903 1966 Château La Mission Haut Brion (12 bs) (oc)   $3800-5500 904 1966 Château La Mission Haut Brion (2 mags)   $1200-1800 905 1966 Château Montrose (12 bs) (owc)   $1200-1800 907 1966 Château Montrose (12 bs) (owc)   $1200-1800 914-916 1966 Château Trotanoy (12 bs) (owc)   $1900-2800 932-936 1970 Château Pétrus (12 bs) (owc)   $15000-22000 974-977 1970 Château La Mission Haut Brion (12 bs)   $1800-2800 979-982 1970 Château Pavie (12 bs) (owc)   $900-1400

 

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Reply by JonDerry, May 9, 2012.

Forget 09/10, it's all about 2011 Bordeaux now...K&L has wines available for sale already, and the French Chateaux will keep the wine under ideal conditions (oak cask) until it's ready. Plus, the prices are higher than 2008 so it must be even better!

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Reply by dmcker, May 9, 2012.

Seriously, Jon, you should look at these for purchase. One of the best chances you'll have in your lifetime to drink good, aged Bordeaux at a (relatively) reasonable price. Look at the prices for the same chateaux for 2009/10 vs. for 1961!

1961 was called the vintage of the century before the Bordelaise and their hangers-on figured they could say that for several vintages every decade. It was better than 1982 and likely every bit as good as or better than 2009/10 will turn out to be. If RP had been the age he is now and writing back then you would've heard the same hype from him then about '61 as he's spewing about 2009 now.

1970 wasn't a shabby vintage either. Come on, now, $1800/case for a '70 La Mission vs. $18,000 for a 2010 (no that's not a typo and yes that's a whole digit of difference)? I know which one I'd rather drink right now and I'd definitely be happy to buy 10 of the '70 vs. one of the 2010 if they had that much. La Mission has been a rock solid producer at the highest level of Bordeaux quality since forever--far better than plain vanilla Haut Brion was back then. 

And if you're liking Poyferre now, how about a case of '64s at $70/btl? That's a wine that is *much* better aged than drunk young....

If you have any of those winnings left, this is where I recommend you put them.

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Reply by JonDerry, May 9, 2012.

Do I have to buy cases or can I buy single?

We could really use you in the states D to help get all these wines together.

So many things to look at right now, I'm intruiged by the 1990 cal cab comparison, really like 05' Leoville Poyferre, and there's that 04 (or was it 05) Barolo Monprivato GdP recommended.  

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Reply by Richard Foxall, May 9, 2012.

dmcker, the comment about CT posters deserves this add-on:  I constantly see TNs on CT about wines I own (they show up whenever I log in, for any of you who don't use CT) that aren't even in the beginning of their drinking windows.  Huet, Larkmead, Chat. SHL, and on and on.  Two trends emerge:  One is that this is fabulous wine because... well, it's famous.  Two, is this is terrible wine that I bought on some recommendation and drank as soon as it arrived, travel shock be damned, age of the wine be damned.  I paid $25 and it ought to be 90 points. 

So what's the point of the drinking window?  Except for a few real lightweights, why are we rushing to drink anything red within 3 years of its vintage?  Even the most unheralded wines, if made competently, should last at least that long and might gain something without any loss.  I can't even look at my 2010 CdRs until fall, never mind the Gigondas and CdP.  Sure, they aren't 20 year wines (neither are most CdPs), but unless they are in a boiling room, what's the rush?

FYI, recently restrained myself from picking up quite a few bargains at BP in the older-California Cabs area.  I just can't spend the money and fill the space right now, although I can justify the fact that they are ready to drink NOW and give immense pleasure.  Might have to rethink that after all. 

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Reply by JonDerry, May 9, 2012.

I don't get the negative talk about CT. Find it an invaluable resource, that becomes valuable once you take the authors track record into account. I'll take real users drinking and providing notes on a wine over the course of its life over a few critics who're tasting upon release or in barrel.



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