Wine investors wary of full-bodied prices for star 2022 vintage

Those who collect and trade the fine wines of Bordeaux will have noted something unusual this spring. Prices for the 2022 vintage, sold to clients before bottling, jumped sharply.

The châteaux making these top wines have raised their prices by a fifth on average over the previous vintage, sometimes much more. This increase has deterred collectors from buying, hurting fine wine merchant sales at a time when they can least afford to hold any extra inventory.

Every May and June, wine merchants pour thousands of emails into clients’ inboxes about the latest releases from Bordeaux’s top makers. It is en primeur season, a chance for the châteaux to sell last year’s wines — not yet bottled — through a selected list of distributors known as négociants. This follows rapid fire review sessions by top wine critics.

A little over a decade ago buyers would have scrambled to get hold of allocations of these precious bottles before their prices rose later. Not any more.

Many have pronounced the 2022 vintage one of the greatest, at least in this millennium. The FT’s own expert Jancis Robinson found the wines had an “amazing freshness” despite a roasting summer. Yet not many buyers want to pay up for these wines.

A jump in offered prices has upset and frustrated buyers, just when a surge in interest rates has made financing any inventory costly for those further down the sales channel, beyond the négociants.

The en primeur sale has always been a quirky business. Once reviews of the top critics come through, the négociants then offer wines in a steady stream of releases over six to eight weeks. Wine merchants then collect orders from their retail or trade clients (such as restaurants).

For some wines, allocations to the négociants sell out quickly; other times much more slowly. Négociants may hold on to bottles, having paid for their stock on the hopes of later sales, as will merchants.

These 2022 wines, mostly reds, have received rave reviews from many wine critics. These can drive sales for any particular wine, so merchants rely on them. Focusing on the scores from one well-regarded critic Neal Martin of Vinous reveals that these have equalled those from recent highly successful vintages such as 2016, 2018 and 2019, according to data from wine exchange Liv-ex. 

Most châteaux owners have chosen to boost prices by an average of a fifth over last year. Some wines backed by good reviews went up much more. At a time when global economies and asset markets feel shaky, the average merchant and their customers are wary.

Château Haut-Bailly was once seen as “good value” among the top flight in the region. Not any more. Critics have steadily lifted their scores over the past decade. This year, Martin gave it 96-98 points, in line with the 2019 vintage. But at £1,440 per 12-bottle case, the 2022 costs nearly 70 per cent more. One can get the top vintages of this wine from 2000 and 2010 for less, points out Justin Gibb, co-founder of Liv-ex.

Château Pavie in Saint-Émilion offers another example, which Martin scored at 93-95 points. If Martin’s past ratings are anything to go by, one could do better buying any of the 2016, 2018, or 2020 vintages. At this year’s £3,576 per case, that is some 40 per cent above the 2020 release price. 

No one in Bordeaux will want a repeat of what followed the 2010 en primeur season. Prices first spiked, and subsequently crashed. The Liv-ex 100 benchmark price index fell about 35 per cent three years afterwards. Asian buyers, scarred by that experience, have not forgotten.

Paulo Pong, founder of merchant Altaya Wines in Hong Kong, travelled to Bordeaux this month to taste the very young wines from the 2022 vintage. “I loved them, thought them fantastic. I really wanted this en primeur to work.”

But he says high prices, more interest recently in Burgundy wines among Hong Kong and mainland Chinese buyers, and high interest rates to finance inventory have made him cautious. 

Despite the relative value found for top Bordeaux’s clarets compared with those of Burgundy (sometimes less than tenth of the cost), Pong has not seen his Asian buyers switch back. 

Even normally effusive UK merchants could only put a modest spin on this year’s campaign. “Some collectors have been keen to get hold of such good wines, but for those more price-focused, whether collectors or investors, the opportunity has been less obvious,” says Matthew O’Connell, head of investment at Bordeaux Index.

Others are more philosophical. Charles Sichel, part of his family’s Maison Sichel négociant, thought the 2022 vintage tastings went extremely well, as they should have. Sichel’s business also owns a much revered winery, Château Palmer, which also increased its prices significantly.

Across Bordeaux, this year the wines are “on a par with 2010 and a level up on 2016,” he says. The prices are high for good reason, he thinks. As négociants, Sichel agrees that high financing costs are an issue this year. Négociants cannot so easily absorb large allocations to hold for months or years, as they once might have. But the stronger financial positions of first growth châteaux, such as Mouton Rothschild or Château Margaux, mean they can keep any unsold wine inventory themselves.

Not all critics thought last year’s crop was uniformly good. Wine critic Jane Anson had some questions about this vintage, yet understands the fuss. “The Bordelaise are doing what they always do, and there is a lot of frustration [with the release prices].”

For Gibb at Liv-ex, this year smacks of the 2010 release. He and others sense the uncertainty among buyers. “Ultimately, the supplier of capital is the consumer, not merchants and négociants who don’t want to take on more stock,” he says. “Lower returns will hurt them.”

If he is right, we will see bottles for sale of this seemingly top vintage for years to come.