WHAT WILL HAPPEN IF PRICES OF EN PRIMEUR CHAMPAGNE IN BORDEAUX INCREASE? EVERYONE IS ASKING FOR A CUT OFF PRICE, BUT VINTAGE 2014 IS HIGHER THAN 2013 AND THE CHATEAUX, DESPITE DIFFICULTIES IN THE EAST, ARE HOLDING TIGHT (RISKING A FIASCO)

Recently, the wine world has been watching Bordeaux very closely to see what choices the Châteaux will make about en primeur sale prices, which will most likely depend on the trade performance of the most important wine region in France, at least in economic terms. In the last few years it has been facing new dynamics, like the Asian market’s "disinterest".
685 million bottles are produced each year, for a total of 3.98 billion dollars in turnover. 42% of production is sold on foreign markets: 45% in Europe, while 33% end up in the Orient, especially between China and Hong Kong, which together are worth 464 million dollars.
That is quite a lot, but it is now in a downward tailspin. In 2014 Chinese imports collapsed both in volume (19% less) and value (21% less) imported from Bordeaux, which has plunged all French wine exports. In the first 11 months of 2014 they reached 7.01 billion euros, compared to a total of 7.81 billion euros in 2013, and December figures won’t be enough to save the vintage.
The logical consequence in a difficult situation is to establish significantly lower prices to 2008 levels, to bring back the interest of the wine merchants for Bordeaux, which is what everyone is hoping for vintage 2014. Yet, it is not at all certain that this will happen. It seems, as "Wine Searcher" (www.wine-searcher.com) revealed, the hope is likely to be an illusion. Many producers are not at all convinced to go on the market, in a very good year like 2014, at lower prices than 2013, which certainly will not go down in history, "betraying", so to speak, the very principle of en primeur sales.
Thomas Duroux of Château Palmer, for instance, seems willing to go on the market at 160 euros, the same price as 2012. It would have been an absolutely legitimate choice a few years ago, but not so good from a purely commercial point of view, today.

Guy Ruston, managing director of Bordeaux Index, sends his warning from Hong Kong, “calling to mind that the 2013 vintage was not a success and if 2014 prices are higher, not only will this vintage be a flop, but also there is at stake the credibility of en primeur sales Bordeaux enjoys”.
In favor of Bordeaux, on the basis of an excellent year, the United States that had not been paying much attention since 2009 and 2010 has renewed its interest, driven also by a very favorable euro /dollar exchange rate (not seen for nigh on 12 years), so much so that "Newsweek" (www.newsweek.com) has foreseen getting up to par within three months.
The English pound is also enjoying a favorable economy trend.

The real issue is market confidence for Bordeaux fine wines and en primeur sales, because as the director of Liv-Ex (www.liv-ex.com) Justin Gibbs explained to "The Drinks Business" (www.thedrinksbusiness.com), “the US has never stopped buying Châteaux wines of Bordeaux, they were just waiting for the bottles to get on the market, which in recent years have not appreciated compared to the decisive prices of the en primeur campaign.
This trend is difficult to change, and shows us why, in the last five years, investments in the secondary market of fine wines have never paid off. That's why, despite the great year, confidence is at its lowest level, and the possibility that the en primeur campaign will be a fiasco is more than real”.