The prices for Bordeaux 2023 have not fallen low enough, analyses the trading platform Liv-ex. During the En Primeur campaign, they were even almost 21 per cent more expensive on average than in 2022. As a result, sales are stalling and the system is coming under pressure.
The global fine wine trading platform Liv-ex (London International Vintners Exchange) has presented its final report on the 2023 Bordeaux En Primeur campaign. The analysts rate the quality as only "average". Although there were some excellent wines, 2023 was a heterogeneous vintage overall. Although many châteaux had taken "a small step towards a healthier system", the price reductions "did not go far enough". Before the campaign, reductions of 30 to 35 per cent were demanded. In fact, prices only fell by an average of 22.5 per cent - almost 21 per cent higher than the prices for 2021. This means that 2023 is also 2.8 per cent more expensive than the current average Bordeaux price for the past ten vintages. The Liv-ex Bordeaux 500 index of the 50 most important châteaux has fallen by 13.4 per cent since May 2023.
The biggest price falls or smallest increases often happen in the earliest phases of an en primeur campaign. Château Léoville-Las-Cases, for example, was the first prominent winery to come out with a price reduction of almost 40 per cent compared to 2022. After that, the reductions became smaller and there was a pause during Vinexpo Hong Kong. Subsequently, many wineries seemed to change their strategy: lower prices, but also smaller quantities. According to the report, Pichon Lalande, Palmer and Montrose, among others, released 20 to 30 per cent less wine to avoid flooding the market. For some, the reductions were below expectations, such as Château Pape Clément 2023 with a drop of 6.7 per cent and Château Duhart-Milon with a drop of eight per cent. Château Figeac was one of the last prominent wineries to follow the recommendations of traders and observers with a drop of 40 per cent.
The release dates and price reductions compared to 2022 in per cent
Liv-exLiv-ex therefore notes "a certain level of commitment" to the en primeur system. However, the slow sales indicate that "overall, the reductions have not gone far enough", as too many wineries have not reduced prices sufficiently. "Considering last year's overpricing and the current market conditions, this year's price cuts are negated overall," write the Liv-ex analysts. They may have been a step in the right direction - but the market needs "a fundamental change".
Many British sellers of En-Primeur-Bordeaux as well as the négociants themselves therefore expect a 25 per cent drop in sales compared to 2022. And the previous year's campaign was already "sluggish". One British retailer reported that his efforts to motivate his customers to make purchases had come to nothing: email open rates have fallen by 20 per cent since the start of the campaign.
This is probably the reason why no producer offered their wine in instalments this year, as has been customary in previous years. The first offer is set at a lower price in order to test the market. If it is successful, the second and third release will be at higher prices. According to Liv-ex, this could be due to the fact that only a few wines are sold out. Even châteaux that were considered successful - such as Pontet-Canet and Lafite Rothschild - are still available from most merchants at their opening prices.
In addition, there were hardly any bundled offers from négociants this time. Dealers only receive an allocation of a popular wine if they order one or more other, less attractive wines at the same time. Due to the overall low demand this year, producers obviously lacked the room for manoeuvre to apply this strategy. Bordeaux has become a buyer's market. Stocks are rising at the châteaux and négociants, as many customers have not even called up their allocations this year. The large new cellars being built in Bordeaux are a sign of large stocks that will have to be sold later, report the Liv-ex analysts.
In addition, the cellars of many private buyers are well filled. Only a few collectors would continue to buy out of habit and not pay attention to prices. However, many traditional customers have become convinced that buying en primeur no longer offers them an advantage, as there is no certainty of value appreciation. Younger and tech-savvy collectors in particular are aware of these problems, as they are always comparing prices on the internet. They are also more open to buying top wines from other regions. Bordeaux En Primeur lacks a strong value proposition for them. In addition, many less prominent wineries, for example Crus Bourgeois, have become significantly better in quality and often offer better value for consumers who just want to drink good Bordeaux without spending too much money. This is also proven by our tasting: "Good Bordeaux doesn't have to be expensive!".
The next generation of collectors has more choice than ever before and is less and less willing to store wine for long periods of time. Poor yields and increased financing costs are doing the rest to weaken confidence and interest in the en primeur system throughout the supply chain. As a result, more and more châteaux are releasing their wines later and at higher prices. The price reductions during the campaign indicate a willingness - if not unbridled enthusiasm - to continue a system from which Bordeaux has benefited greatly over many years. However, in order to maintain the en primeur system, a new, committed customer base would have to be found - and this could require a further price adjustment. Therefore, all eyes would now be on Bordeaux 2024.
