Small is Beautiful
Burgundy has a certain cachet which eludes its rival Bordeaux. Bordeaux châteaux – even the most illustrious – the first growths – produce a hefty quantity of wine. Château Lafite Rothschild makes around 20,000 cases of grand vin in an average year. Château Latour about 18,000 cases. While Burgundy you see, can go one better – scarcity value.
Bordeaux vineyards are much bigger. The estimable Château Lafite Rothschild, one of the largest, has an impressive 112 hectares. Château Latour has 78 hectares. Vineyard boundaries are not fixed in the same way. Lafite has vines over the border in St-Estephe. Admittedly not all the vi-neyards are used for grand vin, some goes into second and even third labels. At Latour it is the 47 hectares around the chateau. But Bordeaux chateaux are prestigious brands, super-luxe, sump-tuous brands like luxury motors and jewellery brands. Vintages may change, but this can be evened out in Bordeaux by masterfully blending different parcels and in particular a ‘palette’ of several grape varieties. It’s a skilful art form, but it’s not part of the culture in Burgundy.
Burgundy vineyards, by comparison, are pocket handkerchief in size and fixed. Take Domaine Comte du Liger-Belair, La Romanée which is just 0.8452 hectares. The 300 cases hardly satisfy the hunger of its collectors. Domaine de la Romanée Conti, Romanée Conti is 1.81 hectares leaving the world’s wine lovers and trophy hunters fighting over 400-500 cases. These are tiny monopolies. Most grand cru are larger, but still relatively small – glorious Montrachet is just 7.8 hectares and Chambertin is 13.62 hectares. What’s more they divided between many owners with just a smidgen each. Domaine Armand Rousseau has 2.55 hectares of Chambertin; a generous slice indeed.
Burgundian vineyards exist on a knife edge – totally exposed, one grape, one chance – nothing like rolling the dice. One bad storm, and you lose a harvest to hail. They often do in Volnay. Recent vintages in Burgundy have been tiny and this only serves to up the ante. Rarity value is intoxicating. The trophy hunters are after the big cats – Romanée Conti, La Tâche, La Romanée, Musigny, Chambertin.
The rest is simple economics – the law of supply and demand.
A quick rummage through the internet shows the prices for which certain grand cru from stellar domaines are trading on this secondary market. I hasten to add that this represents a tiny fraction of the market for Burgundy. There is plenty of well priced Burgundy, but that’s the subject for another briefing. So here goes.. Domaine du Comte Liger Belair, La Romanée will set you back £1000 to £1,400 a bottle for 2004 (a challenging vintage) to nigh on £2500 for top vintage 2009. A bottle of La Tâche 2010 is trading on the internet at £1800. Domaine Jean Grivot’s excellent Richebourg 2010 looks a snip at £700. I have just seen Georges et Christophe Roumier Le Musigny 2010 trading at a staggering £4-5,000 a bottle and DRC, Romanée Conti at Â£8000. Now 2010 was a lovely vintage, but really.
Will this market crash? The government austerity drive on luxury goods in Beijing seems not to have dented the enthusiasm for expensive business gift-giving. Indeed a fall in the markets in China may prompt the wealthy to re-locate their cash into tangible assets. The US survived the sub-prime disaster and is snaffling the good stuff once more, so for now the prices of some grand cru are crazy. But who is really profiting?
The following briefings: Winners and losers on the hill of gold.