A revolution could be coming to Bordeaux’s celebrated vineyards, producer of some of the world’s most expensive wines.
In a move which flies in the face of the way fine Bordeaux wine has been sold for decades, Château Latour has declared that it will only sell its wine when it is mature and ready to drink.
The 2011 vintage will be the last to adhere to the en primeur system, a practice under which wine is tasted directly from oak casks and sold to merchants a few months after each harvest, but not physically released in bottles for another two years, often to be consumed years later by wine lovers.
Château Latour’s decision represents “a fundamental shift in mentality,” said one merchant, and has raised questions about the value of the whole en primeur system.
Frédéric Engerer, president of Château Latour, says its “almost in the DNA of Bordeaux [that] you actually sell your wine before [it is] bottled”. But he adds: “Imagine any field where you pay for a product but have to wait 10 years.”
He says the alternative being adopted by Latour will give it a more accurate picture of its wine, as tastings will happen once it is judged ready for release, which for the 2012 harvest will be around 2019.
The estate also argues the move will address concerns over wine fraud. The problem of fake bottles has been on the rise as newly wealthy, but inexperienced, enthusiasts begin collections. The price of premium Bordeaux wines has soared as affluent oenophiles from China and Russia drive demand. The provenance of a bottle, which could eventually sell for upwards of £1,000 and has been stored for the best part of a decade, will be absolutely certain, Mr Engerer says.
While some estates in France’s other wine-producing regions also follow the en primeur arrangement, it is in Bordeaux where the practice is regarded as the norm.
The system works like the crop or animal produce contracts common to futures exchanges around the world. Winemakers give up potential profits – should a wine prove to be better than its first taste implies – in return for the certainty of cash flow now.
The question of whether Latour will make higher profits from owning the wine for longer – even though it will be more valuable once it is properly mature – is finely balanced, industry insiders say.
“It’s quite brave to say ‘we’re going to keep it before [we] sell it’,” says Stephen Browett, chairman of Farr Vintners, the London-based fine wine traders. But it is “presumably more expensive than [when sold] as a future”, he says.
However, some doubt whether longer control over its wine will benefit Latour’s bottom line. Dropping out of the accepted system of wine releases could reduce the impact an individual producer makes, suggests Max Lalondrelle, Bordeaux buyer and fine wine buying director at Berry Bros & Rudd. The annual collective en primeur release creates “a buzz, like with a [new] Apple product”, he says.
Allan Sichel, head of Maison Sichel, a Bordeaux winemaker and merchant, agrees. “There is great motivation to buy en primeur – if you don’t snap it up, there is a risk you’ll never buy that wine again,” he says.
However, the move could temporarily reduce turnover for Bordeaux’s négociants, a network of about 300 merchants specific to the region, Mr Lalondrelle says.
Estates around the world typically employ agents to help with the global distribution of the wine, but in Bordeaux this is done via the négociants, who then deal internationally.
Merchants say they do not believe other estates will also stop selling en primeur, due to the financial burden of withholding and storing their vintages. Château Latour, they note, is owned by Artémis, the holding company of François-Henri Pinault, one of France’s richest men. Mr Pinault is chairman and chief executive of PPR, the retail and luxury group.
Mr Sichel, who is also president of the Fédération des Négociants, says he has “no concerns” over Latour’s move, and that while there will be some impact the disruption should be minimal.
“The top châteaux represent around 3 per cent of Bordeaux production by volume, and 20 per cent of the value,” he adds. “Château Latour is one of the top ones, but one amongst many.”
Mr Engerer, himself the grandson of a négociant, says that the change will not disturb the distribution model and adds the estate is not considering selling more directly to consumers.
“Its going to be a very interesting experiment,” says Mr Sichel.
Additional reporting by Jennifer Hughes