Bordeaux 2011, Part 3 - We all know that Sauternes is a swan yet we treat it like an ugly duckling

It already seems that the white wines of 2011 are winners in terms of quality, which happens to lead nicely into instalment three of the Bordeaux 2011 blog.

Why do the classed wines of Sauternes and Barsac not command the same prices as red wines of similar quality?

Some of the red winemakers of Bordeaux have focused on the low yields for the 2011 vintage which achieved as little as twenty hectolitres per hectare. It is true that this is a very low yield for red wine and a testament to the commitment of winemakers to create the best possible wines under what were difficult circumstances. 

Twenty hectolitres is however, the high end of yields achieved by quality Sauternes winemakers in any given year, whilst the best estates produce closer to ten. Even the less than meticulous Sauternes winemakers are limited by the appellation laws to twenty five hectolitres per hectare.

I am not going to be cynical by suggesting that some red winemakers of the Left and Right Bank are publicising reduced yields in an effort to justify low price reductions against last year’s primeur prices.

After all, the Estates in Sauternes are well aware that eventually the Market will always dictate the value of a commodity. The plain truth is that, the Market does not care how difficult or costly your product was to produce.

It is worth considering whether the best Sauternes are under-priced, or if some of the red wines of Bordeaux are over-priced?

The graph below clearly shows how the first growths of the Médoc have made significant gains since 2005 against Château d’Yquem.

Graph 1:

In our data set we use average merchant prices from the nearest comparable years in terms of overall quality for each region which have a suitable history of trade to effectively illustrate divergence of value.

When we make comparisons using wines from the next layer down, it is immediately clear that the red wines have a higher value and similar performance, even though 2007 was one of the poorer vintages of the decade.

The difference is even more pronounced in a great red wine year, such as 2005 - see graph Three.

Graph 2:

Graph 3:

 Conclusion

To answer the question of whether the wines of "Sauternes are under priced, or whether the top reds are over-priced?"

The reality is that it is not just the wines of Sauternes that have been left behind by the very best trophy wines of the Left and Right Bank, it is all Bordeaux wines that have lost ground in terms of price irrespective of colour. However, it is also true that the wines of Sauternes are outrageously cheap when measured against comparable red wines.

Clearly Asian buyers have accounted for recent price rises of older vintages, but when one considers that approximately only one fifth of Château Lafite's production is exported to China, one has to assume that a considerable amount of the younger vintages are being snapped up by Speculators.

On the other hand the wines that we call Super Seconds are less attractive to investors and are therefore, to a greater extent being bought by collectors for eventual consumption. Furthermore it is not just the traditional collectors of these wines, but also the Asians and the former collectors of the first growths that can no longer justify the outlay.

In the long term the trophy wines of Bordeaux will not be consumed at the rate at which they were in the past and it is true that some Speculators are wary of wines after a certain age. Firstly due to the loss of elasticity of the cork which can lead to seepage and therefore ullage and secondly because there is greater difficulty in establishing provenance of wines as they increase in age.

We may see the day when Speculators will no longer wish to hold onto the wines whilst there is still a considerable amount of stock left in circulation,

I am not necessarily suggesting that this will result in a price drop as the feed of wines onto the market will not be rapid. Instead I can envisage a situation where the historical gap is once again re-established between the top performing wines and the second tier wines.

However, to illustrate the ongoing ability of Bordeaux wine prices to defy both gravity and credulity, I finish with this quote from Stephen Browett of Farr Vintners concerning the 2000 vintage that was published in an article in Just Drinks June 2001...... 

Published: 10th April 2012

Part 1: Doctor, I may be suffering from Bordeaux Fever!

Part 2: Will buyers and Châteaux arrive at an entente cordiale, or will they agree to disagree?