Latour made a big splash in the wine world when, in 2011, the renowned estate decided to switch from en primeur to ex-chateau Bordeaux sales. Photo Credit: Wikipedia CC user Benjamin Zingg
Ex-chateau Bordeaux is in the midst of a historical identity crisis. For centuries now, Bordeaux has been lauded as one of the finest wine regions in the world, but fraud and a market bubble have forced its winemakers to make a drastic move: forgoing en primeur sales in favor of ex-chateau. More estates than ever are holding back bottles from their finest vintages, keeping them safely stored in the winery’s cellar years after initial release. While this emphasis on ex-chateau Bordeaux is worrying some winery stockholders, for collectors, this could be a sign of positive change. In a market where wine fraud is rampant, especially when it comes to Bordeaux wines, collectors have longed for a safer way to buy wine. It appears as though Bordeaux’s wineries are finally answering these concerns.
A Case Study in Lafite, Latour, and Haut-Brion
In 2009, after a few years of disappointing weather, Lafite-Rothschild was buzzing with excitement over its newest vintage. The weather was superb, and experts called the vintage one of the best to leave the estate in that decade. However, Lafite’s celebration was somewhat short-lived; during en primeur week, fraudulent wine sellers offered their customers thousands of dollars worth of Lafite futures, far more than what was available at the estate. At the time, wine sales director Simon Staples told a journalist, “I would not be surprised if three times more 2009 Lafite will be sold than has been made.” The situation left collectors wondering whether the wine futures they were buying were authentic, or if they were being tricked by frauds.
Lafite wasn’t the only estate to face this looming problem; Latour and Haut-Brion had each experienced secondary market fraud and skyrocketing prices in the 2000s, and the owners had little control over their wines once they hit the market. By 2011, Latour decided to try something new: the estate withheld all en primeur sales, and saved a good portion of its wine for ex-chateau instead. When wine expert Jane Anson spoke with Latour’s marketing director at the time of the change, he told her that Latour’s goal was to put the focus back on the wine, rather than putting money in the pockets of potential frauds. Haut-Brion soon followed in Latour’s footsteps, and based on current market data, their gamble might be paying off in steady sales.
Ex-Chateau Means Steeper Prices, But Might Be Worth the Cost
Selling wine en primeur is generally easier for wineries than selling wine ex-chateau because the winery can sell hundreds of futures before the wine has even been bottled. Liv-ex’s James Miles explains, “When you can sell your wine for 500 euros per bottle in a single phone call to a courtier, with minimal distribution or marketing cost, at gross margins of 98% and hold no stock, why would you want to change a thing?” Meanwhile, selling wine ex-chateau takes far more work, requiring the winery to store the wine properly, then wait on profits for years after the vintage’s initial release on the market. In this sense, wineries become like serious wine collectors themselves, holding their young bottles until they are close to their peak maturity, then selling them for a higher price later.
If wineries aren’t making as much profit off of ex-chateau Bordeaux, why are we seeing a shift toward this sales technique? Some experts point to marketing strategies and the trend of “ready to drink” wine. In the competitive wine market, collectors are willing to spend more on bottles that they know are authentic, and that they don’t have to store for the next 20 years. In addition, if the winery has a lean season in which the weather is poor, its owners can rely on sales of ex-chateau back vintages to see them through the year. Bordeaux sales have seen massive dips and spikes on the market over the past decade, and a focus on ex-chateau is the region’s method for taking back control of the market.
Why You Should Consider Ex-Chateau Bordeaux
When you consider the added safety, saved storage costs, and steady projected market prices for the 2015 vintage, buying ex-chateau Bordeaux could be your best option. Unless you buy from a retailer that inspects bottles carefully for authenticity, it’s difficult to know whether the bottles you’re buying are real, or if you’re buying gussied-up cheaper wine. Buying ex-chateaux guarantees authenticity, and helps you show a clear line of storage, increasing the worth of that wine later, should you choose to resell it. It’s true that you’ll spend more on ex-chateau than you would on en primeur, but you still have to account for the costs of storing that wine in a cellar for at least 10 years. Instead, wineries take on this work and expense for you, leaving you to enjoy or resell the wine within a few short years. Once you’ve bought ex-chateau, I recommend having your wine shipped to a bonded warehouse or storing it professionally with Vinfolio. This way, you can show future buyers extensive paperwork proving that your wine never left the hands of professionals, and you’ll get a greater return on your investment as a result.
Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. Contact us today to get access to the world’s best wine.
