Wine prices to fall?

My first thought as well Alex, particularly with the trendy sommelier naturalish unicorny stuff, hopefully the prices of some Beaujolais, Loire, Jura and cool Spain stuff become less frothy, there has to be an upside to all this chaos
 
Alex Lake said:
There seem to be various headwinds for wine pricing, mostly down to potential global recession, especially if US tariffs really do go to 200% (which I doubt).

Presumably there might be quite a glut of fine wine on the market, at least in the short term.

Obvs feel free to delete if you want, Tom - no offence will be taken!
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I think your post should have been 'to fall further'! Broking market has been lifeless and dropping on the whole for 12 months at least already. I woukd hazard some to do with the pull back of China. Certainly now the state of things could fuel a much bigger drop...
 
Just spent a couple of days in St Chinian and the feeling there is that it is a bluff - 200% is so big, it will just stop everything dead. One grower had three pallets already packed and the bottles labelled ready to ship. That was on hold, and their importer couldn't give a time scale.

I hope it is a bluff, I fear not. While it may lower prices in some instances, it will also bring problems and costs and there will be domaines for whom the lost business / cancelled orders may be existential.

Different scenario to the secondary market trade in fine wines, of course.
 
Jack Chaddock said:
Just spent a couple of days in St Chinian and the feeling there is that it is a bluff - 200% is so big, it will just stop everything dead. One grower had three pallets already packed and the bottles labelled ready to ship. That was on hold, and their importer couldn't give a time scale.

I hope it is a bluff, I fear not. While it may lower prices in some instances, it will also bring problems and costs and there will be domaines for whom the lost business / cancelled orders may be existential.

Different scenario to the secondary market trade in fine wines, of course.
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I guess part of it is how long is the bluff going to last. A stubborn president would suggest it could be some time.

Prices have already been falling for a few years for Burgundy, and have been static for Bordeaux for probably 10-15 years. Perhaps this new pressure might finally see a major merchant break and finally begin to sell off things at a price where they will sell. They all seem to be on a permanent hold especially for Burgundy, refusing to countenance the sorts of price drops that are possibly needed. I mean all you have to do is look at the amount of unsold 2022 from top domaines to see what’s really happening.
 
I agree with Gareth. I think perhaps part of the problem here may be accounting conventions. Inventory needs to be held at the lower of cost and net realisable value, and merchants don't want to admit that inventory that used to appreciate may have depreciated as it will result in a hit to reported profitability.
 
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AJ Temple said:
I agree with Gareth. I think perhaps part of the problem here may be accounting conventions. Inventory needs to be held at the lower of cost and net realisable value, and merchants don't want to admit that inventory that used to appreciate may have depreciated as it will result in a hot to reported profitability.
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there is definitely a lot of wine around… prices other than top Italians have softened EP so far this year (not by much) and the secondary market is far from buoyant other than a few exceptions and storied vintages getting into their windows. Regardless of the US situation prices do need a significant correction. I think Bordeaux EP may be a decent barometer and how prices move post EP as to whether that is going to happen or not.
 
Jeremy Caan said:
Say more, Jack?
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I just wanted to draw a distinction between the pressures faced by small domaines, separate from the trade in 'fine' wines. My feeling is lots of smaller growers across France, and Europe, are facing real pressures from falling domestic consumption and rising costs, labour etc, and really rely on exports to keep going. So the complete removal of a serious market is a big headache. Even in Burgundy, outside the major villages anyway, recent price rises haven't made people hugely wealthy, though I am sure they are more comfortable than in the past. The best domaines have invested heavily in their vineyards, and their wineries. Moving to sustainable or organic agriculture, investing in more staff, all the myriad things needed to improve the quality of the wine, all of which we want and support of course, cost money. I may be wrong, but I don't think many are able to simply slash their ex-cellar price without knock on effects on how they can produce their wines, staff their domaines etc.

There is clearly going to be a correction in the market, by which I mean wines which have left their producers and are now being traded between merchants and buyers. Of course, the large merchants hold big inventories, which must be weighing on their cash flows, but they are also storing a great deal of wine on behalf of clients, much of which was bought with investment as the primary aim. Often what we see on Wine Searcher is cases being brokered on behalf of clients, and I can imagine it is a difficult conversation to say to some of those clients that not only is the visible price, ie Wine Searcher, lower than they expected, in actual fact they need to be 20-25% below that to move the wine. For merchants, if they recently offered their clients wine Y at X price, they may be worrying what problems will be caused by subsequently offering it much lower. I also think there's a general feeling, which I don't really share, that this will all blow over, so as long as people can, they will hold out for what they see as the correct price. Over time this may change.

Don't take this super seriously, just some observations from my experience, and conversations.
 
Richard Zambuni said:
The Bordelais always get their pricing wrong in times of stress - the question will be by how much.
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They absolutely do. Glad I don't have to do the Bordeaux Circus anymore, but this year should be interesting. On the face of it, a small vintage of not very good wines, or very mixed quality anyway, the perfect opportunity to drop prices. By how much is the question, to which I imagine the answer will be 'not enough'.
 
Jack Chaddock said:
I just wanted to draw a distinction between the pressures faced by small domaines, separate from the trade in 'fine' wines. My feeling is lots of smaller growers across France, and Europe, are facing real pressures from falling domestic consumption and rising costs, labour etc, and really rely on exports to keep going. So the complete removal of a serious market is a big headache. Even in Burgundy, outside the major villages anyway, recent price rises haven't made people hugely wealthy, though I am sure they are more comfortable than in the past. The best domaines have invested heavily in their vineyards, and their wineries. Moving to sustainable or organic agriculture, investing in more staff, all the myriad things needed to improve the quality of the wine, all of which we want and support of course, cost money. I may be wrong, but I don't think many are able to simply slash their ex-cellar price without knock on effects on how they can produce their wines, staff their domaines etc.

There is clearly going to be a correction in the market, by which I mean wines which have left their producers and are now being traded between merchants and buyers. Of course, the large merchants hold big inventories, which must be weighing on their cash flows, but they are also storing a great deal of wine on behalf of clients, much of which was bought with investment as the primary aim. Often what we see on Wine Searcher is cases being brokered on behalf of clients, and I can imagine it is a difficult conversation to say to some of those clients that not only is the visible price, ie Wine Searcher, lower than they expected, in actual fact they need to be 20-25% below that to move the wine. For merchants, if they recently offered their clients wine Y at X price, they may be worrying what problems will be caused by subsequently offering it much lower. I also think there's a general feeling, which I don't really share, that this will all blow over, so as long as people can, they will hold out for what they see as the correct price. Over time this may change.

Don't take this super seriously, just some observations from my experience, and conversations.
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Thanks Jack.

On the other hand it's possible that, in the medium term, as climate change gathers pace, it will become increasingly hard to make good wine in the classic regions and we might all wish we hadn't sold.
 
Jack Chaddock said:
. Often what we see on Wine Searcher is cases being brokered on behalf of clients, and I can imagine it is a difficult conversation to say to some of those clients that not only is the visible price, ie Wine Searcher, lower than they expected, in actual fact they need to be 20-25% below that to move the wine.
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Winesearcher by definition lists the prices at which wines haven't sold, rather than the going rate.
Jeremy Caan said:
as climate change gathers pace, it will become increasingly hard to make good wine in the classic regions
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In Burgundy at least it's almost entirely positive so far, particularly in the many areas where grapes used to struggle to ripen, but it may not stay that way forever. I keep meaning to investigate some of these new Hautes Cotes wines, which are apparently actually drinkable with pleasure nowadays.
 
Thom Blach said:
Winesearcher by definition lists the prices at which wines haven't sold, rather than the going rate.

In Burgundy at least it's almost entirely positive so far, particularly in the many areas where grapes used to struggle to ripen, but it may not stay that way forever. I keep meaning to investigate some of these new Hautes Cotes wines, which are apparently actually drinkable with pleasure nowadays.
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Arguably the Hautes Cotes aren't classic regions. I suppose this relates to the question of whether terroir matters. Perhaps one day wine made in Greenland will be just as pleasing as wine made in Gevrey is today.
 
Jeremy Caan said:
Arguably the Hautes Cotes aren't classic regions. I suppose this relates to the question of whether terroir matters. Perhaps one day wine made in Greenland will be just as pleasing as wine made in Gevrey is today.
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Terroir has obviously much to do with temperature and exposure to the sun, as well as many other things. The Hautes Cotes are certainly Burgundy both geographically and geologically, and Burgundy wines have always come from there, it's just that they are rather better now; so far at least it hasn't meant that more celebrated wines are worse than they were, though at least in white it could be argued that the hierarchy is vastly less important than it was.
I have had a great deal of experience of 20th century wines from the Hautes Cotes. One needed quite a lot of imagination fully to appreciate their undoubted pleasures.
 
Jeremy Caan said:
Thanks Jack.

On the other hand it's possible that, in the medium term, as climate change gathers pace, it will become increasingly hard to make good wine in the classic regions and we might all wish we hadn't sold
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Funnily enough, I was so impressed with a lot of the wines I tasted in the south this week - many at 12.5-13.5% with super freshness and purity. I was expecting loads of 15% monsters and rather dreading it - that is my own prejudice showing. Was really pleasantly surprised. Old vines play their part, especially Carignan and Cinsault, but various growers (not mine I hasten to add - this isn't a pitch!) were doing lots of different things to lower the ABVs and keep freshness in the wines. It made me more optimistic really, though you have to say they have more options there than they may feel they have in more 'classic' regions.
 
Thom Blach said:
Winesearcher by definition lists the prices at which wines haven't sold, rather than the going rate.

In Burgundy at least it's almost entirely positive so far, particularly in the many areas where grapes used to struggle to ripen, but it may not stay that way forever. I keep meaning to investigate some of these new Hautes Cotes wines, which are apparently actually drinkable with pleasure nowadays.
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Apparently? Definitely.
When in the locale, our house white is PYCM's HCdB. :cool:
Having tried various producers in the village, we have finally alighted on a grower, Dom de la Cozanne. Etienne's vineyards came on stream in 2022 & he has a very minded approach, but sold his 2024 crop to aid cashflow.
 
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