Normally during early part of Spring, between late March to first week of April, Bordeaux is bustling with thousands of wine professionals from all over the world, including wine critics, importers, sommeliers, and restaurateurs, in anticipation of the en-primeur of the previous vintage — but not this year! The COVID-19 pandemic has changed this Bordeaux tradition, perhaps forever. It is quite interesting to note that prior to the pandemic, the 2019 vintage had already been much talked about. It is, after all, coming after a great 2018 vintage. And as a shadow vintage (one that comes after a spectacular vintage), the vintage can never be all that bad — however, 2019 proved to be even better than expected. Thus, a huge dilemma. The 2019 vintage should be fetching similar prices as the previous 2018 vintage, but the menacing effect of COVID-19 caused the world economy to go into recession mode. With this in consideration, the 2019 en-primeur will go down perhaps in recent history as one of the biggest bargains of all time.
THE EN-PRIMEUR PRACTICE
En-primeur, which literally means “in first,” is the practice of purchasing a wine in advance of its commercial release. It is also known as “wine futures” and is exactly the same in principle with investing in commodity futures and hedging on price movements of assets. In this case, it involves wines normally from the most renowned chateaux in Bordeaux. The concept is quite simple and practical. The buyers want to secure the wines early (18 months ahead of release), hoping that prices will rise once the wines are bottled and released, while the chateaux get to improve their cash flow and financial position because of the advance payment, with no worries about selling the bulk of their wines when the vintage is ready. En-primeur has always worked for the top Grand Crus, but it is certainly not foolproof, as proven by the overzealous prices of 2009 and 2010 vintages that brought losses to many buyers — and these were in fact two incredible vintages.
So, with the 2019 en-primeur, the chateaux have been more cautious on their asking prices. Like when buying commodity futures or other financial instruments where you need to use brokers, when buying on en-primeur, you need negociants.
While en-primeur is a tradition, some chateaux, notably first-growth Chateau Latour, abandoned selling en-primeur. Since 2012, this renowned chateau stopped participating in the practice because it believes that this system encourages wines to end up in consumer’s hands too early, even though these wines are meant for long-keeping before consumption. And then there are Bordeaux wineries that have left the négociant system altogether, like JCP Maltus (of the Le Dome Saint-Emilion fame) — though they are very much in the minority.
THE BEST RESOURCE PERSON
In trying to understand the state of the 2019 en-primeur, I am very fortunate to know Monsieur Yann Schyler, whom I considered a friend, both in the wine industry and personally. Yann Schyler is the 8th generation head of the almost three-century old négociant Schroder and Schyler (since 1739), the owning company of third-growth Grand Cru Chateau Kirwan from Margaux.
In an interview with Yann during his Manila visit, Yann explained how négociants are so important for the chateaux, especially historically. The négociants were the ones who actually did the bottling of the wines, from the 17th century until the early part of the 20th century. The chateaux or vineyard owners’ role then was simply to make wine and put the wine in barrels. The négociants would then come in and bottle the wines in their facilities, label them and also do the selling and distribution. In fact, last year, when I visited the Schroder and Schyler office in Bordeaux, I actually saw century-old bottles of Grand Cru icons like Chateau Mouton-Rothschild, Chateau Cos d’Estournel, and others all with the Schroder and Schyler label. Yann is therefore the best resource person to analyze what happened to this year’s version of en-primeur amidst the current COVID-19 predicament.
Aside from being a négociant, Yann and Chateau Kirwan are also active members of the Union des Grands Crus de Bordeaux (UGC), an organization composed of over 130 top estate members from the best of Bordeaux. The UGC has been credited for putting the en-primeur festivity into the Bordeaux calendar, and the rest of the wine world took notice since then.
BOTH VOLUME AND PRICES DOWN
France had to shut down on March 17 because of the growing number of COVID-19 infections,
and the en-primeur festivities came to a halt. So unlike in the past when wine critics would be all over Bordeaux, visiting several chateaux, swirling wine glasses, whiffing, quaffing, and spitting barrel samples to rate the wines — this is not the case for the 2019 vintage given the travel restrictions and all the precautionary measures taken. Instead, reluctantly, even some of the most prestigious chateaux would send barrel samples to the most important wine critics, and use Zoom, Whatsapp, or other online formats to hold Q&A sessions between wine critics and the chateau owner or winemaker and do virtual taste-offs.
But in general, despite a real good consensus that this is a quality vintage year that Bordeaux could have capitalized on, almost all chateaux decided to release volumes 20-30% below normal en-primeur quantities, and at prices closer to 2014-2015 levels. And, as Yann mentioned, even at their own estate Chateau Kirwan, they are pricing their en-primeur at a bargain 2014 level. This means something like a 30% drop in price. Even first-growth Mouton-Rothschild did the unthinkable, offering its wine at 30% off from its 2018 vintage — and so did Saint-Emilion royalty premier cru Cheval Blanc.
It has had a domino effect that because of the slashed quantity offered, the 2019 en-primeur ended short and sweet. Yann reminded me that there is really no official start and end to en-premier as all chateaux are free to do what they want. But this year, the en-primeur came six weeks late, and most started early June and ended unofficially on June 23.
COVID-19 has been a humbling experience for even the biggest names in Bordeaux, and the 2019 vintage situation may be the reset button needed in the new normal, where life, and being alive take precedence over some of the best luxuries in life. I am just happy drinking my old Grand Cru wines knowing that at this point, my enjoyment far exceeds any profits I will derive from engaging in “wine futures.”
The author is a member of the UK-based Circle of Wine Writers (CWW). For comments, inquiries, wine event coverage, wine consultancy, and other wine related concerns, e-mail the author at protegeinc@yahoo.com or via Twitter at www.twitter.com/sherwinlao.
