Comments on: Random ruminations…

By: billn

billn — Tue, 06 Jul 2010 16:43:27 +0000

Easy John – they just need a few multiples of 0.50 ha

Only in these price-inflated times will 2ha (GC of-course) give a family a ‘living’ – for generations, they needed 10 mixed (cru) hectares and often still had other jobs…

By: John A Guentner

John A Guentner — Tue, 06 Jul 2010 14:46:24 +0000

The problem of pricing burgundy wines lies with in the vineyards themselves. That it to say, How can a “Domaine” of .50ha produce enough wine to make it profitable? Some Domaines produce only 900 or so bottles a year…. so do the math… (900 btls $20 USD is a measly $18,000 gross for the year. Hardly worth firing up the tractor for……..

By: Ned

Ned — Mon, 28 Dec 2009 07:57:07 +0000

Consumers of Burgundy in the US have increasingly found themselves at the mercy of several factors that fueled an irresponsible speculative bubble in pricing.
A trend that began with the ’99s, got boosted by the ’02s,
wasn’t helped by the tiny production of ’03, and exploded with the ’05s, has ended badly due to the economy. I have to say I blame the critics for inciting the frenzy and the trade, as the gatekeepers, for exploiting it. It was all about maximum short term gain. It may have been the prior parallel insanity with ’05 Bordeaux that helped cloud judgement. ’05 Burgs mostly left cellar doors at the same prices as ’04s. “06s however were sold
at new higher prices which was a mistake. Producers and the trade need to return to a model of steady, consistent fair pricing and if some years see some secondary trading, so be it. They seemed to think we had entered a permanent new era of pricing. There are examples of AC wines, retailing for nearly $100 here in the US. The region will see itself permanently marginalized if that keeps up.

By: chambolle

chambolle — Sat, 19 Dec 2009 21:03:35 +0000

Something’s gotta give. Unless these wines can find a market at any “sky is the limit” price in a new area — like the Asian market — an equilibrium must and will be found. Here in the US, I see many 2004s and 2006s offered at retail that are a fraction of the original ‘asking price.’ When you see retailers offering ’04 Mugneret-Gibourg NSG Chaignots at $30 a bottle, ’04 Boillot Beaune Clos du Roi at $20 a bottle, ’06 Bouvier Marsannay Les Longeroies at $17 a bottle, ’06 Chandon de Brialles Savigny Lavieres at $20 a bottle, tenths of ’04 Jadot Gevrey CSJ for $20 each, well sir, you know someone in the food chain is taking a bath to just move the wine the heck out of the warehouse, put some cash back in his pocket and get on with the business of buying and selling more wine. And as US pricing for ’05s had reached absurd levels — at the peak, the Rousseau Gevrey CSJ was offered at $800 a bottle! — these have ratcheted back very considerably as well, with reductions of 50% to 60% in some cases. Still extremely pricey, but falling back to earth.

You’ll recall the 2008 Bordeaux “futures campaign,” with the 1st growths offering at $200 a bottle. More of the same may be on the way in Burgundy, although scarcity certainly provides more price support for Burgundy. It’s a lot easier to name your price for 1000 bottles of Musigny than it is when you have 100,000 bottles of Latour to move.

By: Chris L.

Chris L. — Tue, 15 Dec 2009 13:10:32 +0000

Bill -

Nice to have your thoughts on pricing. Burgundy has always been expensive, but the producers definitely seem to have fallen out-of-touch with their consumers since roughly 2003. There are a lot more fancy cars in driveways, and a lot fewer working-class Burgundies, and I don’t begrudge the community that at all — growing Pinot is a lot of hard work, and the production is small — but the end result has been that 95% of these producers look on their wines as a luxury product that will always find a market based on quality alone. But when you take that attitude and establish high benchmark prices, you compel consumers without vast bags of cash to pick and choose. They can’t afford to drink village Burgundy every week, any more. So guess what? They will in the end buy fewer bottles and choose highly-touted vintages over quieter ones. Especially if the prices push the wines into “investment grade” status, where auction prices for 2005 wines are 2 times higher than for 2004. But it seems to me the biggest issue was producers’ seemingly broad inability to drop prices after 2005. I’ve heard some rumblings laying this at the feet of the growers, but given how much is estate-bottled these days, how true can that be? And it seems peculiarly French that producers should be so at the mercy of growers anyway. Or could it truly be that perhaps all the organic and bio-dynamic practices are coming at too high a price? I wonder if the grandfathers and great-grandfathers of some of these producers wouldn’t wince a bit. Drop your prices and sell some wine, guys. You need to re-establish your long-term relationship to your public.