Rich pickings

What is a bottle of wine really worth? Hugo Rose unpicks the events surrounding the release of the 2005 Bordeaux vintage earlier this year and finds that, as always, there were winners and losers, even in what has been dubbed “the vintage of the century”

From the moment the grapes were plucked from the vine, a multitude of minds began pondering just how much the 2005 Bordeaux vintage might be worth. Everyone knew that 2005 was a crop of sublime quality but, with the wine barely fermented, still in barrel and a couple of years away from seeing the outside world, château owners, wine critics and merchants were debating just how high prices could go.

Following a number of lean trading years, wine brokers around the world were anxious to make hay, but a smaller than average crop in 2005 and the prospect of over-done release prices led to considerable nervousness. It was clear that the wines would sell for more than the previous vintage, which had only a modest reputation. Would producers set the bar higher than they did for 2000 or 2003, the best vintages of the last few years? And would customers actually buy them if they did so?

The presence in France of many global distributors for the inaugural tastings led to speculation that a new era had arrived. Old hands wistfully prophesied that now that the world’s wealthy were in the market for the small number of cases of Châteaux Lafite, Margaux, Haut-Brion and their like produced, wine would cease to be enjoyed as a beverage, and would become instead an icon of luxury. An exciting prospect for the dealers, but one tinged with sadness in that for mere mortals these once-affordable names were about to become no-go zones.

For weeks after the April 2006 tastings, journalists and merchants were buzzing with anticipation, the press eager to learn whether their price-predictions were to be vindicated, retailers working their customer lists to ensure that buyers were poised, charge cards at the ready, for the first major releases. The market would be tumultuous. May came and went without a major wine breaking onto the market. It seemed as though proprietors were sitting on their hands. More likely they were holding fire in wait for the vintage assessment from the Maryland lawyer-turned wine guru Robert Parker Jr, which was due to be published any time. For the last ten years Parker’s pronouncements have had make-or-break consequences for the earning potential of individual wines. Unless a producer feared a poor review, there was no advantage in committing to a market price ahead of the Wine Advocate report.

The Wine Advocate came out in early June yet still the proprietors remained silent. What were they waiting for now? In all probability they were eyeballing their neighbours for the slightest evidence of the price at which the other was contemplating release. Read all signals, send none: a raised eyebrow during a casual conversation could speak volumes and egos were at stake as well as significant sums of money. The history of Bordeaux tells us that there is an unwritten pecking order that must be reflected in the price of each wine. Every château has a neighbour with whom its own wine is compared and a lower price represents loss of face. And every lesser château pays respect to the First Growths, (Latour and Mouton-Rothschild in addition to Châteaux Lafite, Margaux and Haut-Brion), and aims to price their wines in proportion.

Thus Léoville-Las Cases or Cos d’Estournel for example, categorised as “Super Second Growths”, will want to achieve a price of about one-third to one-half of that set by the Firsts. The problem is that the Firsts expect the privilege of being amongst the last to release their prices. It’s a weird dance. With July approaching, traders were getting nervous that their clients would lose interest—even though this could be the vintage of the century—and in unguarded moments Gallic thoughts were beginning to turn to the summer vacation, always non-negotiable as far as the French are concerned.

Imperceptibly the wheels began to turn. At last, the required consensus had emerged, unspoken, painfully slowly and inspired by invisible forces. This allowed châteaux to release their wines for sale, at prices they hoped would optimise their position in terms of both revenue and prestige. This was a one-off decision with no turning back. Too low a price and a wine would be under-rated for years, too high and there would be accusations of greed such that the stock might not sell.

Finally the top wines came out, drawing gasps and cheers in turn, according to whether the producers were judged to have been openly avaricious or unexpectedly reasonable. Haut-Brion was the first of the Firsts to declare its hand, at what was subsequently regarded as a fair £3,600 a case before duty and VAT. £300 a bottle was heroic, but below top-estimate. Every day more châteaux eased their wines onto the market. But it would be almost two full weeks more before Margaux and Latour were in play, at prices almost 25% above Haut-Brion’s opener, sealing a vintage offering which ranged from extortionate to downright affordable. Nobody complained at the £660 asked by Montrose for example, near-neighbour to Cos d’Estournel which released at £1,140 a case.

And were the fish biting? The answer was a qualified yes. There was immediate take-up of the middle-ranking wines—Talbot (£300) and Lynch-Bages (£480) were regarded as steals—and the First Growths found buyers at their unprecedented prices, despite accusations of greed and exploitation. Palmer at £1,500 was deemed on the high side, but it still sold. Some previous buyers, including a number of well-known US collectors, found the numbers too rich and turned their backs, but their allocations were eagerly taken by newcomers, mostly from Asia. Provided all bills are paid, Bordeaux will be satisfied that it secured top value from what is undoubtedly a top vintage.

So what is a bottle of wine really worth? The prize for the most expensive wine in 2005 goes, as it has done in previous years, to Pétrus, which jumped instantly to £1,700 a bottle—that’s over £20,000 a case. But not every vigneron felt good about the 2005 vintage, especially producers of basic Bordeaux rouge, the sort of wine that doesn’t carry a label and is sold in polythene containers. Since March they have been protesting that merchants will not pay the 0.83 Euros (around 60p) they are asking for the equivalent of a bottle.