2006 Pricing: What will it be like?

by Chuck Hayward

by Mike Supple

The general feel is that prices overall will drop on the high-end wines (1st growths) to somewhere between the '04 and '05 pricing. Prices will likely be closer to the '05, putting the estimated drop at about 20%-25%. When it comes to the strong value classified growths (25 Euros and below) the prices will remain very close to the level of 2005.

The Chateau Perspective

The top Chateaux (1st growths) are not afraid about the pricing. The demand for their wines is there, and they feel their wines will sell no matter what. The demand for the wines worldwide is increasing dramatically, but the production in 2006 is down from 2005, as much as 20% for some Chateaux. Some of the more value oriented Chateaux claim to have lost money in the 2004 vintage. They feel the quality of their wines is above that of the '04, and some even state the 2006 has better balance than the '05. Since the quality is still there, they feel there is no incentive to lower their prices.

The Necogiant Perspective

The negociants will be buying the 2006 vintage no matter what, whether or not consumer demand exists in the market place. In order to keep their allocations for future vintages, they must take their allocations each year. However, they seem to agree that there is no fear of being able to sell the first growths at high prices. That being said, they expect a price drop of around 20%, which at the current Euro to US Dollar exchange rate would mean a cost per bottle at around $350-$400 dollars en primeur. There is also a general consensus that the pricing on the cheaper value driven wines will largely remain unchanged from 2005; the quality of the wine for the price is more than acceptable, especially when compared to wines of equal fame, heritage and quality throughout the world.

Where the most worry lies for the negociants is in the Super Seconds. These Chateaux want to keep their pricing high and make the money of the first growths. The problem is that they are not first growths. The worldwide demand simply is not there in a way to support such high pricing. While the pricing en primeur for the 2006 super seconds will likely drop, it will probably be a modest drop (10%-20%) that could result in stagnant consumer market interest. For the negociants, this means they will have to hold a lot of expensive inventory.

What does this mean at the consumer level?

Across the board prices for all vintages have been on a steady increase since the release of the 2005 en primeur pricing. It is currently more expensive to buy the 2005 futures directly in Bordeaux than from retailers in the United States. Many negociants are looking at the retailers in the US and contemplating buying the wine back at full retail mark-up, then flipping it again at higher prices to other markets. The important point here is that even though prices are increasing, it is wise to give the 2005 vintage another look. I have tasted through several of the 2005 wines again this week, and the quality is undeniably there. These are huge wines that are going to be incredibly long lived. In several cases where I have tasted the '06 and '05 samples side by side, the '05s tasted younger. 2005 produced wines with such power and fruit that it is especially worth exploring some of the lesser known classified growths, because the cost less prohibitive and the wines are outstanding.

If the 2005 prices still have your heart pounding and cause your head to spin, it is definitely worth looking more closely at the 2004 vintage. These wines are considerably cheaper than 2005. Granted the quality is not the same, but with today's technological advances (and some might suggest global warming weather influences) the classified growth Chateaux are working hard and making much higher quality wines in less classically perfect vintages. The wines from 2004 are very good - not great - but very good, and in many cases still a fraction of the price of the '05s. However, these wines may not be such great values for long; negociants are all aware of the quality of the '04s and the value these wines represent when compared to 2005 This means price increases when consumers catch on and start rapidly buying 2004. We suggest buying what is already available in the American market at this time, because there is no doubt that the prices from the negociants are simply higher today than they were just six months ago.

Another discovery we have made this week in the search for great back vintages at better pricing is that 1999 and 2001 are both showing incredibly well right now. So far we have tasted a few including Chateau Brane-Cantenac, Chateau La Graviere, Chateau Le Gay, Chateau Bellisle Mondotte, Chateau Haut Berget and the Clos l'Eglise Pomerol. My choice of the group is the 2001 Chateau Le Gay. The color of the core is a very dark maroon surrounded a bright garnet red rim. Huge white and black truffle aromas swim around rich blackberry and raspberry followed by a light clay minerality and violet notes. In the mouth the wine feels fantastic. It is still full and powerful, yet the tannins have rounded to give an elegance to this wine. Lush black fruits are supported by a solid streak of minerality. The finish is long, lingering and spicy.