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Latour to Withdraw from En Primeur Sales

The rumour filtered through to me Friday afternoon. Latour was, apparently, to cease selling its wine en primeur. I texted a couple of négociants I know and whereas the first could not substantiate the rumour – although he had heard exactly the same thing – the second could. The négociants dealing with Latour were informed, by receipt of letter on Friday 13th April, that the 2011 vintage would be the last that Château Latour would sell en primeur.

There is of course precedence for working outside the en primeur system; Jean-Hubert Delon of Léoville-Las-Cases refused to sell his wine en primeur for some time, and he seemed to do very well on it. The vintages were released typically a year or so later, and for a good price too. But the system that Frédéric Engerer of Latour is moving towards is something different. Latour will not be released merely a year or two after the vintage, but instead as the wines approach their drinking window. For me that would be about two decades after the vintage! That’s not impossible (look at Lopez de Heredia and their gran reservas – the current releases include the 1991s), but it is likely that a much looser definition of ‘drinkable’ will be applied here. I expect we will see vintages come onto the market at 6-10 years of age. It is not quite a first for Bordeaux (Gilette in Sauternes release only mature wines) but it feels like it, nevertheless. The first growth effect, I suppose.

Such a move is fascinating in light of how en primeur sales have developed in recent years. They favour the châteaux more and more, consumers dependent upon notes on unfinished wines from critics with no opportunity to taste the wines themselves, critics ‘bigging up’ the vintage with live tweets and hyperbole, and prices that once gave the consumer a break (the earlier you bought, the cheaper the wines were) now beyond the reach of many. Many of the châteaux clawed back the lost profit taken by others (who sat on wines as they climbed in value) by increasing the release prices. The benefit of buying en primeur was lessened for the consumer. Surely the next step is to stop selling through this system altogether; if the accountants agree (and at Latour they obviously do), weather the financial hit for a few years as your revenue stream sits unsold, but then reap the rewards further down the road. It’s what Latour are doing. The en primeur nay-sayers might be pleased, but this is a double-edged sword; now we can have reliable reporting on Latour – in bottle – before the wine is offered for sale. But, on the other hand, Latour is going to be more expensive than ever.

And this decision may have some knock-on effect. Will others move away from en primeur too? Perhaps, but the further down the food-chain we travel, the less financially capable the châteaux will be, and their ability to weather the loss of sales becomes more questionable. Latour may have the financial muscle to step out of the ring, but what about Cantemerle, or Angludet (first – more or less – to release their 2011 this week), Beaumont, Fourcas-Hosten or similar? If the primeurs lose the support of big guns such as Latour, it may well falter. And whereas some may welcome that, I would not wish the ruination of smaller châteaux to be the price we pay for such a change. And what of the négoce in Bordeaux, and the merchants across the world, who make a huge slice of their annual turn-over on en primeur sales? Once Latour is followed out by its first-growth and super-second cousins, will their en primeur revenue be comparable? Certainly not.

17 Responses to “Latour to Withdraw from En Primeur Sales”

  1. I think Bordeaux would be mad to give up EP. Bordeaux has quality + romance + hype. Quality wont change, but EP feeds the other two factors. Other wine regions can only dream of having the focus that Bordeaux gets each year with EP and surely this will dilute it.

  2. Andrew, I think Engerer will be concerned primarily with Latour, before any thoughts for Bordeaux. The advantages are (a) sets Latour apart from the other fists, (b) increases exclusivity, (c) the wines have perfect provenenance, important in a post-Rudy Kurniawan world, (d) wines achieve even higher prices; much of this increased revenue is taken from post-sale speculation which occurred in all Latour sold en primeur, but also an increased value put on the bottles because of the above features.

  3. This has the feeling of the start of the end for the negotiant system – it is them that have been frozen out by Latour over the last few years. In these days of internet marketing and super fast global logistics it is becoming increasingly easy for chateaux to market and distribute their own wines. All they need is storage and we all know that the top properties have been investing heavily in that direction. You are right to point out the importance of provenance too but at the end of the day profit is the driving factor – the accountants have had their say!

    In the end this might be a good thing for the whole of Bordeaux and for consumers. We tend to lose sight of the fact that within the price of a bottle of fine wine the two main factors are tax and profit for the various merchants, negotiants, distributors, auction houses and speculators – if one of these factors can be reduced considerably then perhaps wine might get cheaper?

  4. Chris,

    The bordelaise have already destroyed bordeaux and have done so over a very brief span 9-10 years, at least IMO. EP is no longer for the consumer, that ended for sure after 2004. Raisins were sold in 2003 as another vintage of the centurey and when the opportunity arose with 2005 prices just went skyward from there.

    If the whole system caved in that would be fine with me since Bdx is basically a non-existant region at this point from my perspective. Wines such as Clerc Milon which should be $25-35 ar now $85 and I will not pay this kind of money for this “class” of wine (not classed). Consumers are IMO foolishly paying for worthless hype, evidenced by the over-rated 2003 vintage and then continuing with 2005 scores leading into the greatly over-rated 2006-8 vintages.

    For those of use wine drinkers and not collectors, there is nothing left, for the most part, within the classed growth chateaux to buy. As I have said many times I no longer support Bordeaux and if the region crashed and burned due to 9 years of profiteering that would be fine with me. IMO they deserve it.

  5. Chris

    if this is followed by the rest of the top Bordeaux châteaux it will have major implications for the way, these wines are sold. It is also likely to disrupt the wine investment sector – at least removing the possibility of taking money for en primeurs that you don’t buy.

    Jim

  6. Thanks for all these comments.

    Steve, I think you may be right, in that Latour will show that there is another way. Not everybody will want to follow, but enough of the big guns do, the current method of selling Bordeaux would change forever. The négoce surely havea lot of work selling lower-end wines as well as all the grands crus though don’t they? But there would surely be a big effect at the top end – primeur reporting and sales would falter if the ‘campaign’ was devoid of everything above 4th/5th growths.

    Gary, stong words! I share your feelings about Bordeaux pricing. I just wouldn’t like to see small-time players like Beaumont, Caronne-Ste-Gemme, etc, who sell their wines for €6-8 per bottle year in year out, financially damaged by the actions of big business Bordeaux, where the chateaux are bankrolled by the likes of Pinault.

    Jim, agreed, but there are pros and cons as I have indicated to Steve above.

  7. Chris,

    If those Chateaux which you mentioned, and those like it, produce good wine, then shouldn’t they be able to sell their wines outside of an EP system at a reasonable price? This is what all other wine regions must do, so why not bordeaux, especially as you said, these producers sell their product at consistent prices year in and year out regardless of vintage hype.

    I have bought many wines such as these and have had several vintages of Beaumont which excel in the best years. I have alluded to these value wines when I have mentioned that sweet spot of $10-20 in 05/09/10. Certainly in this range I would at least try these wines in lesser vintages as there is not much to lose.

    On another note, which we really do not touch on very often is the changing style of Bordeaux. I think that while “better” wines are being made, that alot of Bordeaux has now lost it’s versatility with food and really requires heavier favors to carry the concentration of the wines. The new style is not old enough to tell how things will develop over 20-25 years. Opened a 2001 Belair last weekend with friends who know their stuff and they loved this wine. Went great with dinner and just so easy to drink. This is also a wine undergoing significant change since being taken over and one always criticized for it’s lack of concentration.

  8. I can’t help but feel that this will also have a major impact on the life of those scribes who move markets with the magic words ’100 points’. If the first growths and ‘super seconds’ are unavailable for comparison, then quite how the Advocates and Spectators decide to award such marks becomes even more problematic than it already is, and it will fundamentally change the nature of their ‘Bordeaux Report’ — I would suggest for the better, as you have to be an absolute magician to be able to evaluate a wine after six months with a sixty year trajectory. How they will cope with being unable to taste a new vintage of Latour for at least 5 years is, of course, another matter altogether …. And if there is one thing I will be very glad about, it is that it will force those merchants who only blog about such wines and then expect to sell Cissac and Beaumont to change their ways.

  9. Gary, clearly there’s nothing different about Bordeaux that means they couldn’t sell their wine in a manner more akin to other regions, but there are two major stumbling blocks. (1) They already have a system that works very well for them. Why change, they will ask themselves. (2) A change would mean no income for two years. How many businesses can survive zero takings for two years. Even latour has spent many years building up a backlog of wine (I was unaware but they have been cutting off the négociants in recent years) to survive the coming lean years.

  10. Mark, a good point. From an educational point of view if nothing else, you learn a lot about the wines themselves and also the vintage in general from tasting the wines young. That will be more difficult if the tasting opportunities vanish.

    Nice point on the merchants. The sad thing is for many merchants (and press), “we had a l-u-r-r-vely lunch at Cheval Blanc where the 1947 really shone” is an essential part of the Bordeaux primeurs trip. Reporting on how hard Cissac and Beaumont have been working isn’t where the glamour and the foie gras is.

  11. Chris,

    I understand why they would not want to change the current system. I didn’t begrudge them getting monies two years in advance of the release when myself as the consumer also benefitted from the “relationship”. Since that no longer applies, well everyone else goes year to year so why not Bdx??

  12. This is followed by the rest of the top Bordeaux châteaux it will have major implications for the way, these wines are sold. It is also likely to disrupt the wine investment sector – at least removing the possibility of taking money for en primeurs that you don’t buy.

  13. Gary. Agreed that it is now a one-way system. Not saying I wouldn’t like it to be different. Just seeing it from their point of view.

  14. LOVE WINE, agreed but for reasons stated above don’t think there will be a mad exodus out of primeurs just yet. But it is quite right to raise the possibility.

  15. Chris Kissack, how are you! I am a chinese redwine loveers,Can you exchange blog link?

  16. Fine thanks. Looks like you already have a link – as ‘LOVE WINE’ above. Twice in fact! Happy to have you here – I know from my webstats and translated pages that there are many people reading in China & Hong Kong.

  17. Essentially EP is a system designed mainly to support/hype up the Growths, a tiny proportion of the total production of Bordeaux. I hope to see a shake-up of the EP system which will result in highlighting the “lesser” wines of Bordeaux (all colours).
    A lifetime of enjoyment can be had in the £5-25 range. I say let the influential bodies (Decanter, Jancis, Jamie Goode, yourself et al.) further promote the value that can be had from the region; not just the top quality wines.