Wine Spectator: Can Bordeaux Bounce Back?November 17, 2014
After a period in which it focused on China and hiked prices, Bordeaux now faces slumping sales. At the peak in 2012, Bordeaux shipped 6 million cases to China, up nearly 40-fold in less than a decade. But now the négociants and importers are reeling under a hangover. Exports to China plummeted 26% last year to $301 million, as Chinese President Xi Jinping cracked down on the lucrative government entertaining channel. Shipments have slowed to a trickle since last spring.
Meanwhile, two years of small harvests have raised the cost of value-priced Bordeaux, squeezing profits on wines that count margins by the pennies. For négociants, who buy the wine from châteaux and sell it to the world, four vintages of largely unsold wine weigh on their books. Transactions on the Place de Bordeaux have ground to a halt.
“At the moment, the fine wine market is completely stuck. Prices have collapsed,” said Yann Schÿler, CEO of Maison Schröder & Schÿler.
But the Bordeaux wine business has been around a long time and lived through booms and busts before. Schÿler takes the long view. His family has been in the business for 275 years. “The fine wine market has always been a yo-yo. But at Schröder & Schÿler we are selling and shipping wine at the entry level and medium range every day. In the U.S. market, we are doing extremely well with our branded wines and wines around $12 per bottle (at export).”
Wine Spectator has a full report on Bordeaux’s current challenges and the outlook for the global category.
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