Bordelaise needs to “recreate trust” in Bordeaux en primeur

A leading negociant has told a French newspaper that the Bordelaise need to “recreate trust” and “sell wines at the right price" given that there was still “enthusiasm” for wines. Speaking to newspaper Sud O’uest, François Dugoua, general manager of Ulysse Cazabonne said the campaign this year as “violent", despite having “all the parameters to run a good campaign”, notably a good vintage but not necessarily a great vintage”. He argued that said that when he travels, he can see that “enthusiasm for our wines is still there”, however it would be necessary to “recreate trust, let people taste our wines – which have never been so good – and sell them at the right price." He argued that producers this year “are paying for our excesses of past campaigns" as “the connections with our long-standing clients, in Europe and France, have occasionally been broken” over the last decade. Fabrice Bernard, head of Millésima, agreed, noted that although prices had fallen this year (“nose dived” the newspaper wrote), “we don't explain why to consumers”. “Because the vintage is not as good? But then, why did the châteaux sell the 2021 vintage at such a high price, which was also not in the category of the greatest?" he asked. Wine merchant Jean-Christophe Estève (Sovinat) admitted that it was “one of my worst en primeur campaigns in forty years in the business,"

Excesses of past campaigns

The "entire system needs to be redesigned", the paper concluded - noting that the Gironde has lost around of a quarter of its merchants in recent years, where châteaux sold wines, while negociants are destocking in order to boost cash reserves, sometimes by slashing prices. As db's Bordeaux correspondent Colin Hay noted in his appraisal of the 2023 vintage two years ago, some négociants were already in "severe" financial difficulty then, unable to service the accumulated debt associated with the rising costs of borrowing and storage on the one hand, and the reduction in the volume of transactions since the 2019 en primeur campaign on the other, no longer able to absorb the financial risk of en primeur. That situation has only increased in the last year - and in some cases, several chateaux wisely decided to slash the number of negociants they were worked with. This ties in with a discussion last month among the trade, where one producer argued that the commercial model was essentially "broken", given that it "only works for around 30-40 chateaux", notably "the one's you don't need it". As a result, they queried whether it was "sensible for the remainder to offer en primeur". As  Colin Hay noted in his precis of the market conditions before this year's campaign started, around 20% of en primeur's regulars (ie often family-owned properties across Pessac-Léognan, St Emilion, Pomerol and throughout the Médoc, whose revenues from en primeur sales alone exceed 30% of their annual income) "are hovering on the edge of bankruptcy today" and "need sales to survive". An even greater number, he said were "severe financial difficulty".

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