My Article: Chateau Latour Stops Selling Futures
April 13th, 2012
Chateau Latour, the famous first growth, told wine merchants today in Bordeaux that 2011 will be the last vintage it sells as futures, or en primeur. Only bottled wines will be sold from the winery, and vintages will be released when the chateau believes they are ready to drink.
“It’s a paradox to sell a wine that isn’t in bottle yet and then it isn’t consumed until 10 or 15 years later,” said Latour President Frederic Engerer. “It is something that we have to change.”
He pointed out that more consumers are now questioning whether it makes sense to buy futures. Moreover, modern wine lovers are less interested in buying wines and aging them, particularly in Asia, and many are concerned with the provenance of top wines sold in the world. In other words, they want to buy wines for drinking that are properly stored.
Latour is currently increasing its storage space at the chateau with a perfectly controlled environment for wine.
Engerer didn’t say when the new vintages of bottled wines would be sold, pointing out that they would taste the wines and decide when they are ready for the market. “For example, 2006 Latour is not ready to drink but 2001 Latour is,” he said. “ Every year there will be a real debate on what wines will be on the market from Latour.”
He said that it would be difficult financially for anywhere from five to eight years since futures sales comprised a significant part of Latour’s turnover, but the chateau has substantial reserves of old vintages that it would offer to customers until the new system of selling was firmly established. Latour has always held back a large percentage of each year’s wine production.
“We are not leading a crusade against anything,” he said. “It is the right thing for Latour.”
Engerer had no idea if any of the other top estates of Bordeaux would follow his decision. And he said that the en primeur system in Bordeaux would continue for most wine estates because it was an important part of their finances each year.
Paying for wines still resting in barrel is a century-old tradition in Bordeaux and helps winemakers finance their production. In some years in the past, wineries even sold their vintage before the grapes were picked. Most still need the financing.
However, I believe that top wineries like Latour that can sell its young vintages for thousands of dollars a bottle obviously don’t have the need for futures, and others in the same financial position in Bordeaux are sure to follow. In other words, Latour can afford to make the change in its sales strategy.
My question is, what this will do to wine merchants who have relied heavy on the future sales of Bordeaux for their bottom lines? And will this dampen some of the speculation on the wines from the best names of the region?
It’s not going to make much difference to many Bordeaux wine lovers who no longer buy futures. In fact, a large percentage of first growth consumers do not buy futures and prefer to buy the wines on the market by the case or by the bottle to drink. Latour understands this.
“We need to adapt to consumer demand,” Engerer said. “We are seeing the wine consumers and lovers living differently. It’s rarer and rarer that people buy wine and age it in the same place for 20 or 30 years.”Comments