French wine price rises likely to be restrained
The prices of French 2012 vintages are likely to see slight rises as a difficult season is balanced out by fear of market loss due to economic woes
Devotees of fine French wine can relax, your favoured tipple should not become significantly more expensive over the coming year.
Lovers of Burgundy, Bordeaux and Champagne have had to put up with the cost of their drinks rising inexorably over recent seasons, but merchants anticipate that the 2012 vintage will see prices either stabilise or rise by only modest amounts.
Difficult weather earlier in the year will reduce the quantities available from some top producers, which normally would point to consumers being asked to pay more.
But the impact of reduced supply is being offset by the uncertain global economic backdrop and there has been little advance buying by speculators gambling on prices rising strongly between this year's late harvest and the first of the vintage coming to market.
"The first indications of the actual prices people are willing to pay will not be available until mid-November but there are no signs of a frenzy," said Nicolas Ozanam, a director of UMVin, a trade body which represents the producers of 70 per cent of France's wine output.
"The current climate certainly won't encourage anyone to put their prices up without first knowing what the demand is like."
The strong upward trend in prices of the best French wines in recent years has been underpinned by surging demand from Asia, but Ozanam said that producers could not afford to take that trend for granted.
"It is a question of wait and see, particularly for the American and Asian markets in which we cannot afford any sudden movements in prices," he said.
Exports account for 40 per cent by value of France's wine production with neighbouring Britain still the biggest overseas market, with €1.2 billion (HK$11.9 billion) of sales last year, followed by the United States (€860 million), Germany (€690 million) and Belgium (€500 million).
The markets in China, which bought €483 million worth of French wine last year, and Hong Kong (€417 million) remain smaller but are growing much faster, having risen by 40 per cent and 27 per cent respectively last year.
Despite that trend and the tendency of the new demand from China to focus on Bordeaux's most prestigious properties, one of the region's best-known merchants, Allan Sichel, agreed that any price rises were likely to be subdued this year.
"I can't see a strong upward spike," Sichel said. "We've had a good run for three or four years, not just with prestigious wines but also in the market for wines between three and five euros a bottle.
"Now, though, everyone is cautious about the economic situation. We can all remember past price rises that led to the loss of markets and that explains the current desire of producers to be responsible and reasonable."
Two wines that definitely will be more expensive over the years to come are Chateau Pavie and Chateau Angelus, leading estates in the Saint-Emilion region of Bordeaux.
They were the big winners in this month's reclassification of the area's top properties, securing promotion to the elite club of St Emilion wines ranked as "premiers grands crus classis A" (first growth, A class).
The upgrade, following a once-a-decade review, puts the pair on a par with the celebrated Chateau Ausone and Chateau Cheval Blanc in the hierarchy of St Emilion, a part of Bordeaux where merlot is the dominant grape.
Both owe their promotion in part to assiduous promotion of their respective brands, with Angelus in particular having been featured in 30 films, including Casino Royale, the 2006 movie in which James Bond savours a glass with the kind of enthusiasm 007 once reserved for dry martinis.
A label featuring a bell, considered an auspicious symbol in Chinese culture, has helped make Angelus a cult wine for the mainland's new business elite according to the estate's director, Hubert de Bouard, who makes it clear he will be looking to capitalise on his property's new status.
"A bottle of Cheval Blanc will currently cost you two and a half times the price of Angelus," he said. "We will reposition ourselves over the course of four to five years. Our customers know there will be a catch-up effect."
Gerard Perse, Pavie's owner since 1998, echoes the theme. "There will be increases and we have given ourselves 10 years to catch up with the current top two," he said. "Price is a form of recognition. If we can't achieve the same prices as them we will not be taken seriously."