Bordeaux 2016: arriving at a release price
In today’s blog we continue to explore some of the findings from our new in-depth study on Bordeaux, available for subscribers here. Having looked at the wines in which the trade has most confidence, we now turn our attention to Bordeaux 2016, and a key question: how might a château arrive at an appropriate en primeur release price?
Using average figures for 79 of the top Bordeaux crus, we explore two approaches. First, simplistically, we look at release prices of previous vintages, and apply the trade’s suggested decrease of 4% (see here for more) to the average 2015 release price. This is represented by the dotted line.
However, Wine Lister Founding Members were canvassed before having tasted the 2016 vintage, now considered to be excellent, and so the average suggested decrease of 4% on 2015 prices seems unrealistically low. Some châteaux have already released maintaining their 2015 price, which has been well received by the trade, while others have applied increases in euro terms, which in turn are amplified by the current exchange rate when converted into UK offer prices.
For each wine, it is also necessary to take into account the reception by the market of last year’s price, as well as this year’s relative quality.
The second, more sophisticated approach, involves comparing the average Quality scores from the last eight vintages to the current market price for those vintages.
The closest quality rating to 2016 is 2015, but as this vintage is not yet delivered, the most appropriate vintage for comparison is 2010. As such, we have applied the quality to price ratio from 2010, in order to arrive at a derived future market price for the 2016 vintage on average, according to its current quality assessment.
The average price per bottle could be expected to reach €161 in the marketplace in due course.
Margins taken by the négociant and then importers tend to amount to around 25-30%, although this varies from wine to wine.
That would take us to around €117 per bottle at release. Then we apply a 10%-20% “discount” to the consumer for buying en primeur, before they receive the physical product. This suggests an average ex-château release price of €93 to €105 (see chart).
In general, this would mean that 2016s should be priced below current market prices for 2015, and well below 2010 market prices.
For further detail, or to enquire about price analysis on specific châteaux, please email team@wine-lister.com.