Alarm bells are ringing for sky-high Bourgogne prices but it’s unlikely there will be price adjustments in the short term, says BIVB president, citing blistering market demand and low stock as main reasons.
When small vintage volume met with pent-up market demand, it concocted a perfect storm for inflated Bourgogne price that was described by wine critic Neal Martin as “a car crash waiting to happen.”
This became particularly acute with 2021 vintage. Release prices in general for the vintage, due to drastically low yields, rose 25% on average, according to Liv-ex’s latest Bourgogne report titled “For A Few, Not Many”.
Wary of ever-increasing Bourgogne prices, Laurent Delaunay, president of BIVB and fifth generation owner of Edouard Delaunay, admits the Bourgogne wine trade association is concerned but price adjustments won’t happen overnight.
The inherently small production volume compared with Bordeaux means that it will create “tension and rarity in the market”, he says when interviewed by Vino Joy News in Hong Kong.
For the 2021 vintage, due to April frost, later hail and rainfall, its overall volume was only 50% of a usual vintage, according to BIVB. As a result, prices skyrocketed, but the highest price climber is regional Bourgogne, according to Delaunay, the most accessible category that the region needs to engage future generation of wine consumers.
Liv-Ex estimated release prices for village wines increased over 57%, but Delaunay fretted and estimated that prices in some cases almost doubled, sending worrying signs that it might affect the whole economy of Burgundy.
“The bulk prices of the regional Bourgogne Pinot and Bourgogne Chardonnay, doubled. It shows that the market is very stressed, and the prices overreact compared with the reality,” he says, pausing before continuing “This is more concerning,” compared with price jumps in grand crus or premier crus. The latter thanks to its rarity will always find buyers in the market.
The more affordable regional wines, which account for over 50% of entire Bourgogne production are a different story. “It’s the only wines where we have enough volume to be listed in department stores, hotel chains of hotels, to answer to tenders, and so on. And they have a big influence on the whole economy of Burgundy,” he stressed.
“The leaders in Burgundy, the main players, the people of the BIVB, we are very aware of the situation. We are concerned. We hope that there is not going to be a kind of Burgundy bashing that has happened with Bordeaux 10 or 15 years ago,” he continued.
To stabilize Bourgogne prices, according to the BIVB president, it would need at least two consecutively generous vintages. 2022 vintage is looking to be a bumper year. Vins de Bourgogne has reported a 75% increase in volume over 2021, accounting for nearly 1.75 million ha of wine.
However, he cautions it’s not yet back to the same production level as 2018 vintage, which was the biggest in the past 10 years.
The extremely low production volume of 2021 saw merchants and buyers placing orders in advance for 2022 vintage regardless of volume. As a result, “the producers and growers did not feel the difficulty of the market and prices for the time being remain high,” he says.
Prices for grapes and bulk wines for the regional Bourgogne however came down a bit for 2022, “but not too much, not back to the price of 2020”, he says.
“We are going to need two generous vintages in a row to stabilize the prices and the next three months [of 2023 vintage] are going to be critical – March, April and May, due to risks of frost, and afterwards we will know if we have good vintage or not.”