The inconsistencies of en primeur
It’s getting ever harder to discern logical patterns in the pricing strategies of Bordeaux during the en primeur releases, even in the case of a generally well received vintage such as 2016
If you ACCEpT that, in general, 2016 is a good-quality Bordeaux vintage, you might also expect interest in the subsequent en primeur campaign to elevate levels of trade for the great wines and vintages of the region. But, with exceptions, there’s little sign that this is happening. In early June, Bordeaux’s trade share on Liv-ex stuttered along at 64%-65%, with the exchange noting ‘growing apathy for this year’s en primeur campaign’ in its regular Talking Trade update.
That’s disappointing, given the region’s solid recovery following the slump in trade that occurred in April. By mid-May, more than three-quarters of the trade done on Liv-ex was related to Bordeaux.
There remain isolated pockets of interest, but these can serve to inflate that trade share figure somewhat artificially. In early June, for instance, Lafite 1982 topped the table by value – hardly surprising, given that it was trading as an imperial (and its trade price stood at over £45,000 a case).
Similarly, interest in Latour 2005 has been relatively strong (see below). The problem here is one that’s almost as old as time: the widely varying pricing policies of the châteaux during en primeur. A glance at just a few days of releases in early June illustrates this phenomenon, from the ‘well-judged and successful’ (Liv-ex’s words) Margaux release on 6 June to the ambitious prices announced by the likes of Lascombes, Issan and Clos fourtet a day later.
The releases of 8 June encapsulate this volatility perfectly, with Liv-ex dividing them into two broad categories. ‘Those that were successful opened at prices under “fair value” such as Clinet and Leoville-poyferré, and to a lesser extent Smith Haut Lafitte,’ Liv-ex notes. ‘Those that didn’t, such as Ducru-Beaucaillou and pichon Baron, proved incredibly difficult for the trade to sell on.’
‘fair value’ here refers to Liv-ex’s suggested methodology for navigating the confusing hinterland of en primeur pricing: a formula based on the relationship between prices and Wine Advocate scores.
There are signs that this is working, with Liv-ex claiming that wines priced at or close to ‘fair value’ have sold well, while more ambitious châteaux have found the going tougher. But even this system has its limits. How, for instance, would it assess a wine like Cos d’Estournel 2009 – the recipient of a 100-point score from Robert parker, but damned with the faint praise of 91 by parker’s successor, Neal Martin?
Inconsistencies and frustrations are an inherent feature of fine wine but, as in previous campaigns, they are also raising bigger concerns about en primeur. As Liv-ex puts it in Talking Trade: ‘Increasingly questions are being asked of the en primeur objectives of the châteaux, given the generally decreased volumes and increased prices.’
or, to put it another way: is en primeur there to benefit the consumer – or the château?