We are entering uncharted waters and cash in the bank trumps FOMO, the fear of missing out. Warren Buffet can be wrong sometimes, but not all the time, and moving to an underinvested position does not seem completely crazy, writes Martin.
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” Charles Dickens.
Angludet – ‘fine wine’ apparently… shame about the tasting
18th May 2020 kicked off the Bordeaux 2019 en primeur campaign with the release of Chateau Angludet. They’ve partially gone down the amphora route to gain purity. It’s a great success, a very great Angludet, according to a number of merchant emails received today. Those same emails belie one small issue – that the wine has yet to be tasted, a reminder of the impact of Covid-19, the anxieties and emotions over this year’s releases dominated by hope and despair.
So we have to take the Bordelais at their word that 2019 is a great vintage, fresher than 2018, in the same mould as 2016 or 2010. I’m sure producers are excited by what they have in cask or tank or whatever receptacle the juice is in these days. But it’s not unjustified to say that local opinion isn’t always entirely objective. So bring on those Chronopost and UPS samples and let us all taste…
We have to be honest, we’d have much preferred a deferral of the campaign to October after the harvest. We don’t agree that would have caused any issues with other regions’ releases. There is something very strange about releasing a futures campaign whilst so much of our economy is in deep purdah. But the die has been cast and June it is (for the 60-odd releases that the market chooses to focus on).
The choice of timing of the releases is significant. It is quite obvious that, just like the 2008 vintage release, there will have to be a very significant reduction in release prices for 2019 to find a market. Those properties who have tended to use en primeur more as a marketing opportunity than a selling one will have to think about what it means to them: the prospect of a marketing campaign has more or less evaporated.
For those properties who expect or need to sell a sizeable percentage of the harvest, only one of the four marketing ‘P’s matter. It can be the best vintage in the world, it can garner (in the fullness of time) more 100 pointers than any of the last 40 years, but success will boil down to one thing and one thing only: price.
Cos d’Estournel is out at £684 per 6, -23% down on 2018. Great wine they say but is the price reduction enough?
That decision will have ramifications on the whole of the Bordeaux global secondary market. A significant reduction of 30%-40% can ignite interest in the region’s great wines. It can draw in a new generation that has largely ignored the region, or doesn’t see the point of purchasing new releases two years before shipping. It can reward buyers of the last vintages who are under water and likely to remain so. A compromise that shows intent but brings us back to the levels of 2015 will consign Bordeaux to another year in the shallow quicksands of a secondary market lacking direction, fearful of the future, unwilling to commit cash, failing to see the point anymore.
Ah, I hear you say, but the world is awash with cash desperately looking for a home, just as it was post-Lehmann – when the fine wine market benefitted generously. I disagree. We are entering uncharted waters and cash in the bank trumps FOMO, the fear of missing out. Warren Buffet can be wrong sometimes, but not all the time, and moving to an underinvested position does not seem completely crazy.
So let’s say that 2019 is the equal of 2016, increasingly recognised as the greatest classic Bordeaux vintage in a generation. 2019 is likely not its older sibling’s equal (probably, but who knows) but let’s pretend it is for a second. Even on this most optimistic reading of the new vintage, would you rather buy into a vintage that has been tasted, re-tasted, evaluated ad infinitum and has withstood the scrutiny of the entire market, or roll the dice with a vintage that will be narrowly evaluated based on posted samples? Add to that 2016 prices that have barely moved or drifted down, and the comparative case for 2016 is about as strong as it gets.
Bring on June, and a prediction: either the most successful en primeur campaign since 2016 (notwithstanding Covid-19) or a non-event, determined purely by one variable – price.
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