Ditton Wine Traders’ fine wine blog

Sunday the 26th of April and all the First Growths have released their 2008’s, just 2 weeks after the barrel tastings have taken place. I can’t remember a year that has seen such a short campaign. Sure, not all Chateaux have released yet -  the biggest names being Petrus, Cheval Blanc, Ausone, Yquem, Cos d’Estournel, Leoville Lascases – but most big names have. Interestingly and contrary to the rule, these releases have been made before Robert Parker has published his scores. How refreshing by the way that for once, Chateaux have had the balls not to wait for the big oracle to speak.

The top 5 have released at very decent prices, generally about 45% down on last year. The notable exception is Haut Brion, who chose to release at Euro 125 a bottle where Latour, Lafite and Margaux opened at Euro 110 a bottle (ex Chateaux). It appears the First Growths have listened to the demands of the trade, particularly the very vocal UK merchants, to drastically reduce prices. The first signs I have seen suggest demand for the First Growths has been healthy. Indeed, the secondary market for particularly Lafite and Latour sees these wines trade at a 60% premium compared to the ex Chateau release price.

However, trading volume and price increases are not shared across the board. Indeed, pretty much all wines don’t see much activity at all on the secondary market. Anything but the First Growths, even with price reductions of 20%+, run the risk of not being taken up "en primeur", not to mention being traded on the secondary market. It seems 2008, a very decent vintage according to the critics, will only sell if priced below any existing vintage and then only if it’s a big name. Lafite 2008 (amongst others), at GBP 1,600 ex UK, is the cheapest vintage on the market by about GBP 500 a case. Sure enough, that brings speculators in, driving the price up to GBP 1,900 a case. The same holds true of Latour. But traditionally big sellers like Lynch Bages and Leoville Barton are being offloaded at pretty much cost.

So, the 2008 campaign to date has not been a big success. It’s better than feared, but worse than hoped for after the big drops in price. What I find most peculiar is that many Chateaux have yet to release whilst the big hitters already have. I think those Chateaux that still need to release run a real risk of being overlooked now that all 5 First Growths have already played their cards. Perhaps they are waiting for the Parker scores? (said to be due on the 30th of April). Or, maybe, they will  not release at all and wait until the economic climate has improved.

The First Growths have played the game very cleverly. They came out at good prices and they released a decent proportion of their stock in the "first tranche". This has created demand, also in the secondary market. A subsequent tranche can therefore be released at a higher price. Pretty much all other Chateaux however will struggle selling, partly because they just can’t afford to discount as much as the First Growths and partly because demand this year explicitly focusses on the very top names. This inevitably will lead to financial stress, either at the Chateaux and/or the Bordeaux Negociants.  

As a consumer, 2008 is very interesting. It’s a good to very good vintage, probably comparable to 2001, 2004 and certainly better than 2002 and 2007. There are lots of wines in 2008 that you can buy at a price cheaper than ANY mature vintage. When was the last time you could buy Lafite at GBP 130 a bottle? Lynch Bages at GBP 22 a bottle? Is it enough to make people buying? I can’t answer that question with a resounding yes. I suspect you’d do very well buying a First Growth at these prices – either for drinking or investment purposes – given that it’s the cheapest vintage in the market, but there’s too much uncertainty in the market at the moment to create big demand for anything but the big names.

My advise is to buy Lafite, Carruades de Lafite and Latour if you can and wait to see what happens before committing to buying any of the other ones. Chances are there will be plenty of opportunities to get some of those at similar prices nearer to their drinking window.