Record-breaking Futures Campaign!
Article Posté dans : Maxine Wine News par Maxine Colas le juillet J 2010 17:30
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PRICES The major Bordeaux wines are going sky high. French buyers are out of their depth and the speculators have moved in.
Prices for the major 2009 wines have risen steeply. photo l. Theillet SO
The major Bordeaux wines are breaking record after record. After the 2000 and 2005 vintages, the 2009 is rounding off a golden decade with even more noughts on the bills. With the month of June now behind us, all the estates have released their 2009 prices for bottles which will be delivered at the end of 2001.
The family of “classified and assimilated estates” (the classified Medocs, Sauternes, Graves and Saint-Emilions, then the Pomerols and the rated Cru Bourgeois wines, in all about 200 labels, has reached record prices. The average increase has gone beyond 20% compared to 2005, which until then was the most successful vintage ever sold.
Former President of the French Republic François Mitterand once said, “Each man goes to the very limit of his power.” In terms of Bordeaux fine wines, each major wine owner is going to the very limit of his or her sales price. Even if , on the consumer side of the wall, nobody has ever had to put a gun to a client’s head to make them sign a cheque.
“This season my profit is twice that of the 2005 campaign, and four times that of 2008, which, it has to be said, was a weak year for the markets,” confesses a dealer, who is specialised in these niche markets.
“I have only committed myself up to a certain point and I’m sending off the bills now in order to receive the first down payment from our importer clients as quickly as possible,” he adds, but not without some apprehension.
“The world demand is out there and this dictates the prices,” explains one owner. And of course, considering the prices laid down, customers in France are finding themselves pushed more and more outside the market margin, even if some of them still have the financial means to stay in the game.
More than 100 € a bottle
“I get letters from clients who are complaining that the prices are beyond their reach,” admits a professional. “Frustration is mounting and they are losing the reflex of investing in Futures. Indeed, about thirty well-known labels which have been priced at beyond 100 euros per bottle, now seem to have landed on another planet – and joined the world of luxury goods.
A top 1855 classified brand, such as Mouton or Latour, was sold in France at around 80 euros including tax in 1978. This figure rose to 250 euros for the 1998 vintage and is now over 700 for the 2009! It goes without saying that this steep increase has nothing at all to do with the cost of living. Even Lafite Rothschild’s second wine, the Carruades 2009, is priced at over 150 euros. The record-holder is Château Ausone, from the Saint-Emilion region, where one bottle is worth the equivalent of one month’s basic wage : 1,300 euros.
“The English have bought a great deal of 2009 only to sell it on in China, a country where the operators are not used to buying Futures,” observes an expert of these sometimes impenetrable circuits.. The newly acquired wealth and consequent taste for refinement by these Chinese amateurs has indirectly boosted the market for the more famous Bordeaux wines. The economic growth of the Middle Kingdom has not pushed up the market prices of raw materials and minerals but also those of luxury goods.
Return of the speculators
This marks the return of the pension fund firms and other speculators, notably on the London market. “Wines rated over 96/100 by Robert Parker are being fought over and their market prices are already rising. It’s a good investment,” admits a merchant. Because they are seen to be better investments than financial products - with stock markets under fire - and even real estate, Futures have risen to the level of the Fine Art market.
It should be reminded that one is dealing here with a limited edition of between 15 and 20 million elite estate bottles, out of the 700 million bottles of Bordeaux sold every year. All the same, trading in Futures remains big business with a capital B, estimated to generate a colossal 800 million euros.
Author:Cesar.Compadre
photo So :L.Theillet
Source: http://www.terredevins.com/blogs/bordeaux-wine-news/2010/07/02/record-breaking-futures-campaign/