August 24, 2006
Anger as 2005 Bordeaux Wine Fetches Record Prices
By Anna Willard
PARIS -- French lovers of Bordeaux red wine are angry they cannot afford to drink the acclaimed 2005 vintage which is breaking price records before it has even been bottled.
A case of the top end wine is on sale at more than double the previous record even though it will not be delivered until 2008 at the earliest. Owners should then wait at least another 10 years before cracking it open.
"We think, and everybody that has tasted it agrees, that 2005 is an exceptional vintage," said Paul Pontallier, general director of Chateau Margaux, one of five producers to carry the distinguished first-growth label.
The influential American wine critic Robert Parker awarded Chateau Margaux 96-100 out of a maximum of 100 after a tasting in the spring.
Vintners Berry Brothers and Rudd in London is selling cases (12 bottles) of Chateau Margaux for 5,340 pounds ($9,430). That is an increase of 540 pounds from the end of June when the wine 'en primeur' (still in casks) first went on sale at the highest release price for Chateau Margaux.
The most expensive year before 2005 was in 2000 when the release price was 2,000 pounds a case. A case of 2004 Chateau Margaux en primeur went for 1,080 pounds.
The chateaux, which set the initial prices for the wine before selling it on to their distributors, have been criticized for being greedy.
"It's too much for me, because what happens on vintages like that is that it becomes a vintage where the French consumer can no longer buy," said Yannick Branchereau, director of Lavinia France, a vintner in Paris.
"When you have a first class vintage that goes beyond 500 euros before tax, when you don't even have a bottle of wine yet, that is very expensive."
The market for top end Bordeaux is dominated by wealthy foreigners, some buying for investment purposes.
Pontallier and other producers defend their pricing policies which they say take account of market conditions, and in 2005 a drought which led to a smaller harvest.
"We had remarkable weather. It was very dry and hot," he said. "It was an exceptional year, there was enormous demand and there was a reduced supply."
Strong economic growth in many countries helped to support demand and vineyards are attracting new interest from rich businessmen in Asia and eastern Europe.
"We have two huge markets which are just starting to skim the surface for drinking the top wines -- China and Russia," said Simon Staples, sales director at Berry Brothers in London.
"We've got people walking into our shop saying they want to buy a cellar please, and it's 2.3 million pounds and they just want the best. They don't want the 20-30 euros bottle of wine. That's not what cooks their biscuit."
Time will tell whether the Bordeaux 2005 will turn out to be a good investment. If it proves to be a classic vintage once it has been bottled, it should continue to rise in value.
A case of Chateau Latour from 1982 now costs around 10,000 pounds a case and its value should continue to rise because of its rarity. Staples said his company just sold a case of Chateau Latour from 1961 for 36,000 pounds.
One threat to the 2005 prices could come from this year's crop, which is still on the vines and also looks promising.
If 2006 turned out to be another good one, it might undermine the stratospheric prices for 2005.
"The conditions we have seen up till now, and we're still a month away from the harvest, have been less exceptional than in 2005 but still correspond to a good vintage," said Pontallier.