Bordeaux Wine: The Class War

There’s a whiff of uprising in Bordeaux’s middle classes. Hamish Smith reports 

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THE FRENCH ARISTOCRACY was removed from the seats of power head-by-head. That was more than 200 years ago but in the country’s wine capital of Bordeaux there remains a full-bodied ruling class. 

The region’s wine classifications are a class system bordering on cast system. They separate the low-born from the high-born and maintain order; largely neglecting modern day progression and regression.

Of course, Robert Parker et al have brought a degree of meritocracy to proceedings and helped to align Bordeaux winemakers with consumer tastes. But it is mainly the wines of Bordeaux’s upper-middle and elite classes that have access to this democracy. The untitled under-classes, who make up the majority of volume, remain mostly under-served by the systems around them – save one notable exception: their association with brand Bordeaux, which, conversely, would not be what it is without the tradition and mystique of the classification system. 

So has anything changed in Bordeaux? Or more to the point, can anything change? Certainly there is no revolution. But among the middle-order – which Richard Bampfield MW describes as the “soul of Bordeaux”, a sort of faint and disparate uprising is discernible. Here, standards have steadily improved in recent years and are now closer to befitting Bordeaux’s lofty prices. In particular, there has been recognition for quality-driven Petit Châteaux (small unclassified properties), Cru Bourgeois (quality reds from Médoc) and some emerging Bordeaux brands – more on this later. By general agreement there are three distinct classes – the Grand Crus Classé (plus the likes of super-brand Petrus), the mid-market wines described above (priced around £8-£20), and the volume products at under £8. Let’s start at the top and work down.

The upper classes 

In 2012 Bordeaux’s largest markets by value were the UK (€420m), Hong Kong (€242m) and China (€338m). The UK is known to re-sell its stock in Asia and Hong Kong is a gateway market for China. In short, China is the likely end destination for Bordeaux’s most expensive wines. Olivier Bernard, president of the Union of Grand Cru has watched the market grow: “China, as a new market is characterised by consumption of the most expensive and the least expensive wines – with nothing in the middle.” Apart from a few châteaux in the right-bank appellation Pomerol, the Chinese are interested in the Cru Classé. Bampfield picks up the point: “Robert Parker has given the market another reference but the classification still matters in the new markets – there is a lot of respect for Grand Crus there.” 

Philippe Magrez son of Bernard Margrez, who owns four Cru Classé (Château La Tour Carnet, Château Fombrauge, Pape Clément and Château Romer) agrees: “Without the 1855 classification we don’t have Bordeaux. In China they do not love Cabernet Sauvignon – they actually prefer
Merlot – but they want Grand Cru Classé from Médoc.”

But does a fixed classification not breed complacency? Marc Lecomte president of Antoine Moueix, the Saint-Émilion-based Cru Classé Château owner, part of Advini, says the age of an underperforming elite is over. “20 years ago there were second and third growths that were not making good wine but they have improved because of competition. If a château achieves 100 Parker Points and prices treble in one day, the neighbouring property will say: ‘I can do this too’. The market is now above the classification – now the Grand Cru have to work hard.” 

CA Grand Cru is doing just that with its Grand Cru Classé châteaux. Technical manager Anne Le Naour talks us through it:  “At Grand-Puy Ducasse and Rayne Vigneau they were focused on quantity not yield. The potential was here but it takes time to change vineyards to a quality-focus and rebuild the reputation.” Thierry Budin, who took over as CEO in 2006 and quickly went about modernising the company’s properties, has also warned that a hard-earned reputation can be damaged by selling to the wrong customer. “The worst thing that can happen to a wine is storage in bad conditions – eventually the reputation of the château could suffer. But I have started to see the change in China – they understand the wine now. China is today where Japan was 40
years ago.” 

Despite the seemingly irascible thirst for fine wine in China in the last five years, the most recent data show value sales in China and Hong Kong have hit the skids (China grew just +1% while Hong Kong declined 31%). Bernard says in reality “the market is still growing” but there has been “de-stocking” and some of the more “opportunistic Chinese buyers” have left the market. 

The US, another traditional destination for high-end Bordeaux (in 2012 growing 17% to €215m), tends to follow good vintages. 2009 and 2010 were both considered great years so the US and Chinese’s interests competed forcing en primeur prices to rocket. “These two forces put pressure on the price – plus the UK buyers that also sell to Hong Kong. But for the 2011, châteaux did not cut the prices to reflect the vintage – they didn’t go back to reality,” says Bernard.

“En primeur makes me depressed,” says Andrew Thomas, UK commercial manager of negociant and producer Yvon Mau. “In 2011, on the back of 2010, châteaux owners were too greedy. The price didn’t reflect the conditions. It was about getting the right balance – like Mouton Rothschild who took 2011 prices down 33% and sold out.  The 2012 was bloody good but the press [immediately] nailed it so there was a lack of confidence among buyers. Prices dropped 30% in 2012. But a lack of confidence in en primeur meant an opportunity for older vintages.” 

The middle classes

CA Grands Crus Classés’ Château Meyney is known as the château that the 1855 classification forgot. It’s a familiar tale of middle class woe in Bordeaux – châteaux of venerability, producing wines of distinction that are untitled. The newly EU-ratified Cru Bourgeois classification of the left bank’s Médoc is starting to make an impression though – offering consumers security beyond the classified growths. Priced at around £10-20 a bottle, these wines are tested for quality yearly – a rare thing indeed in Bordeaux (though Saint-Émilion Cru Classe does test every 10 years). Cru Bourgeois has appeared on labels for 250 years but it is only since 2010 that the scheme has taken off as an official classification with criteria to entry (the scheme had a false dawn in 2003, collapsing under revolt of disaffected châteaux).

“It’s a good marriage between the history of the name but the requirement of châteaux to improve every year, explains Frédérique Dutheillet de Lamothe, director of Cru Bourgeois Alliance. “They have to work very hard to be a Cru Bourgeois. We are trying to improve the visibility of the classification in new markets and have launched each of the new vintages in the last three years. It’s working well.” Cru Bourgeois wines also have to don special labels, complete with hologram and QR code, which have been limited to 50,000 per winery to prevent over-production.

For many Petit Châteaux the approach is about offering quality and value for money. Standards have generally leapt in Bordeaux over the last couple of decades but particularly in the last five years. Grapes are coaxed into ripening with advanced vineyard management and optical sorting is starting to be introduced as a further fail-safe. Production costs are higher in Bordeaux than in most parts of the world but châteaux are leaner in other areas – they tend to outsource bottling and marketing is generally left to negociants.

Some châteaux see the negociant system as a disadvantage – claiming their wines are lost in a portfolio of similar brands, controlled by a marketer inclined towards easy sales and thick margins. With his Yvon Mau cap on, Richard Bampfield talks us through what is a very French system. “The advantage is that for smaller producers there is tremendous reach – each negociant has strengths in different parts of the world. If there is an appetite for Bordeaux, the negociant will reach it. If châteaux were doing the selling themselves they would need many more sales people. There are strains from time to time – when the market conditions favour the negociant or the producer, but if the wine is in demand it sells. The good properties give distribution to the negociant and look after marketing themselves.”

Beatrice Marrayd de Grottes, marketing and communications manager of CA Grands Cru agrees that more responsibility lies in-house but says some châteaux struggle in the area. “We’re used to talking to professionals, not to wine drinkers. Sometimes Bordeaux can be intimidating and complicated to consumers. More châteaux are trying to put together marketing departments to simplify the [brand] message.”

Margrez says: “The problem is not the negociant it’s the châteaux. If you want to change the method of distribution you must change the châteaux to be more like wineries in South America and Australia.”

Yvon Mau occupies all of Bordeaux’s wine classes, and is now introducing new mid-market line, Revelations. The company has teamed up with winemaker Hubert de Bouard to create Revelations, a range of six wines that will retail for around £8-£12. Bampfield explains: “Generally Bordeaux is criticised for not being fruity – the interesting aspect here is that the emphasis is very much on the quality of the fruit.”

Margrez warms to the subject: “In Bordeaux there are no brands, just 14,000 châteaux,” he says. His father’s company has set about changing that. “Everybody needs security so we added a signature to our range. At the beginning it is just a name, not a brand – it needed noise and advertising. 

The solution is repetition, repetition, repetition. By creating demand we
are making it much easier for the negociants to sell. In many countries châteaux are seen as naff – I say to people I am not a château owner I am a brand builder.”

There are three kinds of producer, he says. “Those that push their wines, those that know there is a problem of reputation but don’t have the money to push, and the great majority that think their wine is the best in the world and don’t have to push.”

The working class 

By popular agreement, somewhere around £8 and below exist the volume wines of Bordeaux. Normally labelled Bordeaux AC and sometimes Bordeaux AC Supererior, these wines make up around half of the region’s production.

The volume end of the business is also an area of focus for the CIVB, who began the Bordeaux Tomorrow initiative in 2010. The project’s premise was that “sales performance [is] not in line with potential” and that Bordeaux is “a damaged brand, notably with respect to quality standards, coherence between price and perceived value and counterfeit products in certain markets”. Pretty strong stuff but, as they say at Alcoholics Anonymous, the first step is to admit that you have a problem.

Since 2010, production has scaled back in favour of quality but the biggest help has been the exponential rise of a new market that is willing to pay decent prices. China has now become the leading export market by volume (538,000 hectolitres and grew 23% in 2012) – soaking-up more than double of second place Germany. “Over the last two years, production has been lower and the consumption has been high so the price of bulk wine has gone up,” reports CA Grands Crus’ Budin. “Achieving a higher price means they can improve the quality. It’s good because everyone must make money in a healthy industry.” 

 Though elevated prices doesn’t help Bordeaux’s ability to compete in price-sensitive markets. “The concern about China is that claret prices are jumping,” says Yvon Mau’s Thomas. “I have seen bulk prices move on a quarterly basis – it’s a problem.”

At co-operative Val d’Orbieu, consultant winemaker Olivier Dauga works across a range of wines, and argues his generic Bordeaux AC and AC Superior wines can be every bit as good as the classified growths – which he argues is a historical not quality differentiator. Dauga says his wines are made with the most modern maceration techniques and achieve good levels of concentration, unlike some Bordeaux wines of old. Still, Dauga says for the majority of the winemakers in Bordeaux, there is no democracy. Jokingly he refers to Robert Parker – a man he respects – as a “dictator” who will “never taste my wines”. “I would introduce a system of testing for wines every five years,” he argues. Dauga practises the democracy he preaches. Last year he set up an annual competition for young winemakers – offering a prize of a year of free consultation and three new oak barrels (these cost around 650-700 each). In a wine world of privilege and inequality, Dauga is every inch a man of the people. 

With an RRP of £9.99, Yvon Mau’s new range of red, white and rosé, Petit Grant hovers above the arbitrary volume definition, but according to the company’s Thomas, the wines will be on promotion at around a third off. Competing with the New World will always be Bordeaux’s Achilles heal. Chile, Argentina and Australia have economies of scale and sunny climates that can produce fruit-driven wines at fruit-barrow prices. Bordeaux has small wineries and big climatic variations so consistency – the cornerstone for any brand – has always proved a challenge. Dauga argues that vintage variation is not a problem these days by dint of improved winemaking and grape selection but Yvon Mau’s Thomas, said the region needs to “work harder to en engage with consumers”. He reports Yvon Mau scoured one third of the region’s Bordeaux AC to find the right grapes for their Petit Grant range. 

Rosé outlook

According to Antoine Moueix’s Lecomte, rosé is one of the big stories in Bordeaux. The style recently overtook white wine in the popularity stakes in France, and while it tends to be made by co-operatives that have the relevant expertise and equipment, it is seen as a big opportunity for Bordeaux’s bulk producers. “The world is drinking more rosé,” says Lecomte. “Provence is out of inventory so now 10% of value of Bordeaux AC is rosé – even if Bordeaux is not the best place to make it. Yvon Mau’s Thomas chips in: “Bordeaux rosé is now 20% of rosé consumption in France. It’s an opportunity in the UK that we must take this year – Bordeaux rosé is a category that does not exist in the UK.”  

Sauternes decline

According to producers, Sauternes sales are in decline and have been for five years. Given that production costs are about twice as much as claret and yields are six times less, a lack of demand does not bode well for the noble wine’s future. CA Grands Crus’ Le Naour explains the difficulty: “We used to sell all Rayne Vigneau through en primeur and liverable but in the last five years it has been hard to sell through both. So we are
showing our wines more and more and we are trying to educate the consumer on the different types of Sauternes consumption. But even Sauternes lovers have a limited perception of how it should be drunk.” For Le Naour the challenge is to create fresher, more acidic styles, distancing her wines from the cloyingly rich specimens sometimes found in the region. 

For the group’s Budin, the solution for Sauternes could – like practically every facet of Bordeaux – be China. “It will become a big market for Sauternes. The Chinese love sweet wine styles – it’s closer to their taste and it fits well with their food. A small change in Chinese consumption would have a big impact in Sauternes.”

It seems, whether in the Sauternes market, or at the value and volume ends of the claret business, China and Bordeaux’s futures are inextricably linked.