Fire! Fire! Fire! (prices…)

23.10.2021billn

Autumn fire in Maranges - the colour of Autumn
Fire in Maranges – the colour of Autumn, yesterday…

It was inevitable, I suppose, but the bare facts are:
2017 – a good volume of wine in both colours
2018 – another good volume – even more-so the whites
2019 – short in whites and less than average for reds too
2020 – okay for whites but short for reds again
2021 – a catastrophe in white and very short (on average) in reds too

I remember the first time I saw prices of €10k for barrels of Corton-Charlemagne and was shocked – well you can think more in the region of at least €40k today.

But the fanning of the fires in the 1er crus of Meursault and Puligny are to be expected – the 2021 yields often 10-25% of a normal year here – currently at least 30% higher bulk prices are being asked and people are still very much testing the elasticity of those prices. I think they will increase by a lot more when you take the example of Bourgogne (red!) Côte d’Or into consideration; last year it was under €1k for the barrel, this year because 2021 will be significantly short (though not as dramatically as in the whites!) the prices quickly hit €1.5k and now people are offering €2.2K – about €7.60 just for the juice without accounting for time, labour, bottles, labels, corks and capsules, wax if you must, distribution costs and local margins and so on. That’s how short the bulk market looks right now and there’s no rule to say it can’t go higher.

Obviously, the people making Bourgogne Côte d’Or with merchanted grapes/wine don’t have a cat in hell’s chance of (more than) doubling the price of their bottles – so some fingers may get burnt – I do remember one vintage where a major seller was losing money on every single bottle of Petit Chablis that they sold. Likewise, it’s unlikely that the (majority of) white 1er crus will be able to sustain 30-50% prices increases at their end customers – but this elasticity has yet to be fully tested. I do think that the price-elasticity of the grand crus will take this in their stride – certainly for the better-known producers.

We will be watching!

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