The Bordeaux boom
Harry Eyres
One day in the autumn of 1971, Baron Elie de Rothschild was reading Time
magazine and happened to see a photo- graph of a bottle of Château Lafite, his property and most lordly of Bordeaux red wines, sitting in a bank vault. 'I assembled my staff,' he wrote later, 'and told them: "The crisis has started." Indeed, from the moment when you start to think of wine as an investment and not as something to be drunk, that's the end.'
People connected with the wine trade should not need to be reminded of the mayhem of the next few years. Encouraged by the enormous demand for the fine and plentiful 1970 vintage and signs of a sudden and rapid increase in American consump- tion of fine French wine, the owners of the eight top châteaux (Lafite, Latour, Margaux and Haut-Brion, the four official 'first growths' of the 1855 classification, Mouton, for long an honorary first growth, finally admitted to their rank in 1973, Cheval-Blanc and Ausone, the two best wines of St Emilion, and the tiny Petrus in Pomerol, which now fetches more than any of them) put their 1971s, good but not outstanding wines, on the market at double the 1970 opening price. Nor, at this stage, was there any shortage of buyers, among them the investors and speculators deprecated by Baron Elie, eager to put their money into prestigious commodities after the dollar crisis of August 1971, and aided by the commodity market facilities provided by the wine departments of Christie's (established 1966) and Sotheby's (established 1970) auction houses. Claret certainly looked like a good investment at that time: the prices of the top wines of the venerated 1961 vintage had increased three, four, or even five times in the subsequent decade. Schemes for investing in wine, some run by reputable merchants, others devised by dubious entrepreneurs, pro- liferated.
For the growers, many of whom had en- dured the grim years of the 1930s and 40s when even the top properties could not make money, it must have seemed as though the millenium had dawned. When- the 1972s, products of a dreadful summer and the latest harvest for forty years, came on the market at prices well above the in- flated 1971 levels, it became apparent to clear-sighted observers that the growers had entered a fools' paradise. Some of the very large quantity of hard, unappealing wines were sold at the ludicrous asking prices, and some literally ended up in bank vaults. (As recently as last year, unsmiling corporate financiers in camel-hair coats could be seen in Christie's wine department trying to off- load huge stocks of minor classed growth 1972s: not only had their value failed to ap- preciate at all over a decade, these wines were virtually unsaleable at any price.) But demand began to tail off in the middle of 1973, while the flowering of the vines took place and it became clear that the 1973 vin- tage would again be abnormally large.
This heralded a series of disasters for the Bordeaux wine trade. The huge 1973 vin- tage, moderate in quality, would have been difficult to sell in any case, but hot on its heels came the oil crisis, bringing panic to all the financial markets. The final straw was the prosecution of the firm of Cruse, pillars of the Bordeaux establishment, for a fraud involving the illegal transfer of Appellation Control& quality certificates — in effect turning plonk into claret. A slump followed, during which the prices of the 1970 first growths dropped to a third of the peak levels, huge quantities of the pro- lific, mediocre 1973 and 1974 vintages sat around waiting for buyers, and wine businesses went bankrupt. Only Christie's and Sotheby's flourished, presiding over massive clearances of trade stock at knock- down prices with the same aplomb with which they had previously eased the flow into the same commodity of the investors' and speculators' funds.
The reason for recalling these events is that they appear to have slipped certain people's minds. The 1982 vintage was cer- tainly a fine one, with grapes containing the highest levels of sugar since 1947. It also had the unusual virtue, shared with 1970, of combining high quality with vast quantity: more wine was produced in 1982 than in any year since records began in 1934. This in itself is enough to make some of the
claims made for it sound inflated; for exam' ple the comparison with 1961, a vintage whose legendary concentration was brought about by spring frosts reducing the yield to a third of the normal quantity. It has been joke for many years that the vin- tage of the century occurs two or three times every decade in Bordeaux. Not that any suspicion of hyping has deterred buyers: merchants over here selling 19°,`,.' en primeur, that is, to be paid for now 0'7 still in cask, and not delivered until 1985' have enjoyed a bonanza. Until recently, this was an obviously sensible way to buy claret: the opening prices of the 1966s and 197°,5, look absurdly cheap today. But the 198' first growths could not be called cheap by any standard: they opened at £200-250 CrP, dozen, excluding the duty, freight and VA' that must be paid when the wine reaches this country, which adds up to about the same price the 1970 first growths were fetching at auction two years ago with ten years' more maturity. In the last few months, the prices of the 1982 first growths have increased by ah°,,nt, fifty per cent, partly the result of i"' tranche system, by which the chateaux release their wine in two stages, and pa to through brokers buying early, holding on force up the price, and then selling. Lallt: ', 1982, if you can find it, will now cost P" £350 per dozen. Perhaps this is justifiable, it might• bel argued, if the 1982s really are so spec But one fact that must be stated is that 0...9 wine can be guaranteed to be that specg" when it is less than a year old. The 1870 vitt; tage is only the most famous of several which have never, or only very belatedly' fulfilled their initial promise. According 70 one senior member of the trade, the 1_,°;,1 Latour was beginning to come roue u 1954. Even the 1970s, so attractive when very young, have gone through a 1014 period of being hard and closed-up, from which many have still to emerge. AnotheL' more embarrassing, fact is that few if,aZ merchants have actually been allowed .'e taste the 1982 first growths. Many, t° them their due, do not pretend otherwise' but if you see, as I did recently, a tastl.ritt note about Latour referring to its Inlagn1,0 cent dark colour, superb depth of fruit `. nose and palate etc.', you might just ask t"to`' merchant in question where he managed get Maybe i hold of a sample. t must be accepted, though it is very sad assumption, that, in the words Peter Sichel, 'it does not really what prices the first growths are sc:Ielw,' they are for trading not for drinking. "., is new and alarming about the present situ . tion is that the process of transformation_ from a pleasant drink into a trading e,_d modity is now taking in the second, third and fourth growths. Chateau Beycheve"
1970, a fourth growth, recently £26° made
per dozen at auction: not only does t"0' matter at represent a one hundred per cent increase a year, but it seems a price which no longer bears any relation to the value of the wrne, as a drink. The ironic thing about the 1954 claret boom is that the growers trying to sell Wine at prices people can afford, for exam- ple the excellent cru bourgeois Chateau roteusac
available at £27 per dozen en
Pritneur, have not being doing particularly well; it is difficult to imagine how they could with such low prices. And for the growers of ordinary Bordeaux and
boom Superieur, there has been no
°°0.al at all: they are getting no more for their wines than they were four years ago. Meanwhile the 1983 vintage approaches. rota some reports it sounds as if the seven plagues have struck: mildew, rot and red
spider are said to be stalking the land. Perhaps it is divine retribution; on the other hand, another large, fine vintage, which at one time seemed on the cards, might have brought a harsh kind of sense back to the top end of the market. Indeed, if the weather is fine over the next two or three weeks, the 1983s might still turn out to be useful wines. One thing that seems certain is that 1983 will be a very good vintage in the Rhone. In the early nineteenth century, `manly' Hermitage was considered on a par with Lafite: this year you can buy it for about a fifth of the price.
Previous page
