Business, Finance & Economics

In Bordeaux, a glass half empty


BRUSSELS — This is the time of year when Bordeaux celebrates its most recent vintage by bringing together buyers and critics from around the world for a whirlwind of generous degustations and sumptuous dinners in elegant chateaux.

The goal of the partying is to convince critics that the newly made wines are of excellent quality and to convince buyers to shell out up to several hundred dollars for each bottle of the most elite Grand Crus.

But after enjoying several years of full glasses of financial and gastronomic glory, Bordeaux winemakers this year are fearful of a bitter aftertaste. By most reckonings, the wine from the 2008 harvest is mediocre, pleasant but not worthy of long aging. Cold, rainy weather in August resulted in uneven ripening for the harvest. The world’s capricious economic climate is adding to the potential hangover.

When I researched my book about the 2001 vintage, "Noble Rot: A Bordeaux Wine Revolution," Bordeaux’s fine wine industry was in the midst of both a commercial and quality boom. The region’s winemakers were leading a revolution in oenology, producing riper, satisfying and consistently structured wines. Demand from the United States and Asia was soaring — along with prices.

I remember spending the first week of April enjoying the degustations, tasting fine wine after fine wine and believing that this was one of the most pleasant ways possible to earn a living.

To be sure, even then most low- to mid-priced French wines, including ordinary Bordeaux — and there’s a lake of it produced each year — were struggling to compete against the onslaught of superior, competitively priced, well-marketed New World wines.

But the elite Bordeaux — the 5 percent of the region’s production from the most prestigious districts, such as Medoc, St. Emilion and Sauternes — was prosperous and the subject of critical raves, with popular demand far outstripping supply. In 1990, Bordeaux exported 500 million hectoliters of wine. By 2000, the figure had reached about 720 million hectoliters and a millennium madness for bottles marked with three zeros pushed up prices.

The 2005 vintage marked another high point. The summer was long and hot and the autumn picture perfect: Critics marveled over the vintage’s quality. At the same time, the global economy was soaring. When the wines went on sale in the spring of 2006, they were snapped up at record prices.

In Bordeaux, wines are sold while still aging in oak casks in cellars. The 2005 vintage finally was bottled and shipped last year, leaving winemakers awash in profits. This helps explain why, even as the global financial crisis spread, sales of Bordeaux stood up: While Bordeaux winemakers saw their overall sales stagnate, drinkers paid more for the wine they did buy.

Figures released last month by the Bordeaux winemakers association showed sales of St. Emilion, Medoc and other Bordeaux wines in 2008 were 32 million bottles, flat on a year earlier. Exports to European Union countries were down 12 percent in volume terms. But the year was saved by the high prices fetched by the 2005 vintage, the best of which hit store shelves last year. Overall sales of Bordeaux wines reached 3.84 billion euros last year, up from 3.4 billion euros in 2007.

This year figures should be less flattering. Even without considering the financial crisis, currency fluctuations look certain to batter Bordeaux. Winemakers’ expenses are in euros, while much of their sales are in British pounds and American dollars, both of which have been falling against the euro.

Many key merchants are not even bothering to visit Bordeaux this spring during the annual tasting. Among the high-profile defectors is Farr Vintners, a fine wine firm based in London. Its directors say they see few buyers for the vintage without a big price drop.

“We have to change this image of Bordeaux associated with arrogance and black ties,” admitted Alain Vironneau, the head of the Bordeaux Winemaker’s Association, to reporters at a gathering here in Brussels to present the 2008 results. For Vironneau, this means prices of elite wines must fall. “We must expect, like with all luxury products, an adjustment of demand, and therefore supply.”

Other trends also worry Vironneau. In France, overall consumption of wine continues to fall, with fewer drinking daily during meals. Many younger Frenchmen are turning to spirits and reserving wine for special occasions. Sales of basic “vin de table” are falling and this translates into tough years for basic Bordeaux, Vironneau said. In addition, he noted that the French government has stepped up its fight against drunk driving with new, tough restrictions. Some officials are even considering raising the drinking age from 16 to 18.

Against these concerns, some in Bordeaux are hoping that critics still will save sales. The most powerful wine critic in the world, Robert Parker, recently travelled to Bordeaux to taste the 2008 wines. If he praises them, it could spike demand, said merchant Jeffrey Davies.

“Just did my big Bordeaux 2008 tasting with Parker and am pleased to report that he found the quality surprisingly good, especially after reading some of the initial reports about the vintage,” Davies said.

Instead of selling, many Bordeaux winemakers may prefer to hold their wines off the market and wait for an economic recovery. For those who cannot wait out the crisis, though, this year’s glass of fine wine probably will end up half empty.

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