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Christian Seely Of Axa Millesimes Talks Bordeaux

December 13, 2011

Axa Millesimes is one of Bordeaux’s leading players, with wine properties including Chateau Pichon-Longueville and Chateau Pibran in Pauillac, Chateau Suduiraut in Sauternes and Chateau Petit-Village in Pomerol. The company also owns Compagnie Medocaine des Grands Crus, a major Bordeaux negoçiant.

Outside Bordeaux, Axa Millesimes’ wine holdings include Domaine De L’Arlot in Burgundy, Mas Belles Eaux in the Languedoc, the Disznóko estate in Tokaj, Hungary and Quinta do Noval in the Douro Valley, Portugal. Total group sales for 2011 exceeded €70 million ($94m), and a similar performance is projected for 2012.

Christian Seely has been managing director of Axa Millesimes since 2000, having launched his wine career as managing director of Axa property Quinta do Noval in 1993. In his leadership role at Axa Millesimes, Seely has driven a major commitment to quality that was begun by his predecessor, Jean-Michel Cazes. In recent years, Axa Millesimes has been at the center of skyrocketing demand for high-end Bordeaux. Shanken News Daily recently spoke with Seely about Bordeaux’s global market.

SND: In the 2010 en primeur campaign, Pichon-Baron’s opening price was €132 ($176), a 46% increase from 2009. How would you describe your approach to the market?

Seely: I look after three Grand Cru-quality properties in Bordeaux: Pichon-Baron, Suduiraut and Petit-Village. I’m also chairman of Compagnie Medocaine, our negoçiant business, which has some allocations of our wines but also deals with all the Bordeaux Grand Crus. So I get the perspective of three properties and a major negoçiant. One thing I’ve retained from en primeur campaigns over the years is that there’s an individual dynamic for each property. From a negoçiant’s viewpoint, you have to judge the situation of each wine rather than apply a blanket view on the vintage. There’s no question that Pichon is one of Bordeaux’s rising stars these days. The 2010 vintage was one of the greatest we’ve ever made—perhaps the greatest. We came out with quite a muscular price, but demand was extremely high. The feedback from all our negoçiant partners was that the Pichon flew out the same day—by the end of the day it was all gone. That’s certainly an encouragingly strong sign of demand.

SND: How is the final pricing decision reached?

Seely: We deal with about 80 different negoçiants, and we discuss it with them. It’s a strange system, but one that’s extraordinarily efficient if used correctly. Each operator in the Bordeaux market has a particular strength—one who’s strong in Scandinavia, another who’s prominent in Japan, another on the West Coast of the U.S. and so on. You choose a cocktail of negoçiants in order to gain strong global distribution. You then consult with them, and they provide feedback on their clients’ sense of the strength of demand. You listen to everyone’s advice. So it’s not a decision plucked out of the air by any means. If you did handle it that way, you’d be in serious danger of getting it wrong. But in the end there is a lonely decision to be made, and that’s the decision of the managing director. You’ve got to take responsibility for that decision, and I do.

SND: Many U.S. retailers have expressed dismay at the spiraling prices of classified Bordeaux, particularly after the 2009 and 2010 futures campaigns. Some have foregone the business altogether, warning that Bordeaux is risking a lost generation of American consumers because of sky-high pricing. Does this concern you?

Seely: It would be crazy not to be concerned. But the situation should be evaluated on an individual basis. Many Bordeaux wines are indeed very expensive, but many are not. Leaving aside Chateau Pichon, there are plenty of great wines from Bordeaux that are much cheaper than the ones attracting all the headlines. For example, we own a property called Chateau Pibran—a marvelous, 17-hectare (42-acre) estate located just north of Pauillac. It’s not a Grand Cru, but it’s a classic Pauillac—a wine I’m very happy to have in my cellar. It also has all the elements for aging into a great wine in 10 years’ time, and it’s about a fifth of the price of Pichon-Baron. Its second wine, La Tour Pibran, is about half of that. There are many similar properties in Bordeaux. Premier Cru pricing has risen because of high global demand, but Bordeaux still offers some serious values. The headlines often obscure that fact.

SND: Aside from Chateau Pibran, how else is your Bordeaux portfolio suited in this regard?

Seely: We also have Les Tourelles de Longueville, the second wine of Pichon Baron. Twenty-five years ago, Bordeaux’s second wines represented a small part of production and were often the result of filtering out wines from younger vines. Today, Bordeaux’s second wines have been transformed. Our selection is far more strict, and the Grand Vin now represents around half the chateau’s total production—compared to 80% in the early 1990s and about 65% by the end of that decade. So at Pichon-Baron, we now make less than half the amount of the Grand Vin than we did even 15 years ago. That means we’re making a lot of Les Tourelles. It’s a very serious wine, and, like Chateau Pibran, it sells at about a fifth the price of Pichon-Baron.

SND: How does the selection process for Les Tourelles play itself out?

Seely: Of Pichon’s 72 hectares, we have just under 40 hectares of truly great terroir. That’s the heart of Pichon—deep beds of gravel overlooking the Gironde, the perfect terroir for Cabernet Sauvignon. This is where the Grand Vin comes from. The heart of Les Tourelles’ production comes from a vineyard area called St. Anne, which has richer, less gravelly soil and is more suited to Merlot. The Grand Vin of Pichon is thus always between 60%-80% Cabernet, while Les Tourelles is usually 45%-60% Merlot. But Les Tourelles carries the Pichon signature and is made by the Pichon team. It’s a fantastic wine that offers Bordeaux lovers something serious without breaking the bank. You don’t see many Grand Cru wines in restaurants because of their pricing. But a second wine that’s well distributed and carries a fair price—and I think Les Tourelles does—can get onto restaurant wine lists and give people a taste of what Pichon-Baron is all about.

SND: How is the portfolio performing in U.S. restaurants?

Seely: We’re doing okay—I would like things to be better. Les Tourelles (and other Bordeaux labels) is distributed on an exclusive basis with Frederick Wildman & Sons, precisely to ensure distribution in restaurants. For vintage Port, we work with Vintus.

SND: Can you quantify sales of Pichon by global region?

Seely: We work with negoçiants, of course, but there’s a great deal of transparency nowadays in those relationships. We keep them informed, and we have clear guidelines about where the wine should be sold. At Pichon, we’re extremely keen on keeping a broad geographical base of distribution. We’ve seen intense demand from Asia, but we’ve been fortunate to remain strong in traditional markets. Our sales are around 60% in Europe, including the U.K. We’re very keen on maintaining a very strong presence in the European markets. The U.S. and Canada comprise about 15% of total sales, Asia is around 20%, and the remaining 5% goes to other markets. That spread varies somewhat from year to year, depending on the vintage and on demand in each country. And of course, if you wanted to, you could sell much more in Asia.

SND: Has the Asian share increased?

Seely: It has, but we have a policy of restraining it because we don’t want to lose our traditional markets. Through allocation, we keep our Asian distribution limited. We’ve also found that people who operate in Asia come to the auction market in the U.K. and buy wine to ship back to Asia. So the percentage in Asia is almost certainly more than the 20% I equated—that’s the figure from negoçiant sales. But I think people who work with us in our traditional markets quite appreciate that Asian presence, because it means strong demand at auction.

SND: Reducing yields seems always to be a key part of Axa’s vineyard strategy.

Seely: Yes. At Pichon in the early 1990s the average yield was 50 hectoliters per hectare. Since 2000, we’ve averaged just under 40 hectoliters per hectare, and the resulting improvement in quality has been remarkable. In the old days, when people went for bigger yields, the grapes didn’t always ripen perfectly, and there were sometimes quite green tannins. Nowadays Bordeaux can make wines like the 2007, which 25 years ago would not have been successful. But there were absolutely delicious wines made in 2007 because we were so particular. We’ve denied ourselves quantity in pursuit of quality. That’s often not mentioned when talking about Bordeaux’s current pricing. Look at the wines from Bordeaux over the last 10 to 12 years. Some of them are the most beautiful wines ever made. It’s nice to get lucky with the weather, but what really matters is the hard work in the vineyard and relentless pursuit of quality. Bordeaux’s pricing structure has helped make that pursuit possible.

For the complete interview with Christian Seely, see the December 15 issue of Impact.


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