Bordeaux’s bubble bursts – and lessons for Cape wine

This is not something immediately evident to the average South African fine wine drinker, However, if you were living in the UK and had been buying Bordeaux En Primeur for many years (ostensibly for your pleasure, but often because you were told it was a great investment and a useful component of your retirement portfolio) you would be acutely aware of the situation.

The Bordeaux wine trade has long depended on the concept of En Primeur sales – which work like this: a percentage of the latest vintage is offered for sale by the chateaux through the Place de Bordeaux. Typically the campaign begins in the April after the vintage. The incentive for the buyers is that the earliest price would (in theory) be the lowest: in the heyday of demand the chateaux would release several “tranches” over a few weeks or months with the price for each succeeding parcel higher than the one before. Buy early, buy cheaper is the message. Built into the idea is the expectation that as the wine ages and gets better, bottles are consumed, so that rarity increases alongside its enjoyment potential – so that a growing shortage coupled with added pleasure would drive the prices upwards.

This model has worked well enough – certainly from the 1980s and until late late 2010s (so, depending on whose hymn-sheet is being held up to scrutiny, probably 2018/9). But for much of the past two decades most of what Bordeaux was offering for sale at increasingly elevated prices was acquired for investment not consumption. The pipeline was filling, there was little or no off-take, and buyers were beginning to discover that they could not sell their purchases for the anticipated profit.

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