Wine maker Doug Fabbioli from Fabbioli Cellars in Virginia sells the wine he produces during the course of the year to the consumers who show up at his winery and by the wine directly from him. Wine maker Ernst Loosen from Dr. Loosen in the Mosel Valley in Germany, whose wines are available all over the world, works, I assume, with wholesalers in Germany as well as with importers from all over the world, who buy the wine from him during the course of the year. The wines of both Doug Fabbioli and Ernst Loosen are sold after the wines have been bottled and are ready to be consumed.
The way the system works for the premium Bordeaux wines is different. And it is unique in the world. The wines are sold well before they are bottled (en primeur system) and the wines are sold and distributed to the world through the Place de Bordeaux.
Buying Bordeaux wines en primeur is like buying commodity futures, with cash laid down now for later delivery of something that does not yet exist as a finished product. The futures reach the consumer through a series of phases.
It all starts with a barrel tasting in Bordeaux for a week with journalists and buyers from around the world in late March. The participating chateaux than release their prices for the Place de Bordeaux negociants in May. After the courtiers ( brokers) take a percentage, the futures are allocated to the local négociants. Courtiers and négociants make up the Place de Bordeaux.
Once past this phase, the importers take over. Some importers offer futures for sale directly to individual consumers. Others sell their futures allocations to wholesalers, retailers and restaurants. The consumers all over the world are the final part of the process. A consumer can expect to pay a 200 percent to 250 percent markup once the title to the wine has made its journey from château to merchant.
For years, the Place de Bordeaux has allowed the producers to release their wine at one fixed price to the negociants they are dealing with and the negociants taking care of the marketing and distribution worldwide, ideally in one day.
Until the mid-1970s, however, a Bordeaux wine would only be marketed on to final customers by the merchants at the moment of bottling, or perhaps just before. The first really successful en primeur campaign to consumers was in 1970, when the newly affluent wine-drinking American public bought large amounts of Bordeaux.
Stepping back further in time, the Quai des Chartrons in the Chartons district in Bordeaux City at the Garonne is full with old warehouses which used to form the offices and warehouses of the négociant firms. Today, the Chartrons district buzzes with cafés, craft workshops and is a prized residential area. Few négociants remain in the Chartrons area now.
Negociants were also much more involved in the production of wine than today. In addition to marketing and shipping, they were responsible for bottling and labeling. They were producing custom blends ordered by customers that could range from assemblages that included blends from different producers. This started to change with the advent of Chateau bottling which was heavily promoted by Baron Rothschild at Chateau Mouton Rothschild in 1924. By 1970, the vast majority of Bordeaux chateaux bottled their own wine.
The Place de Bordeaux system system has its roots in Irish, English and Dutch merchants from over four centuries ago. Names of today’s wine merchants such as Barton, Schroeder, Kressman and Sichel all attest to the success of these ventures that were started centuries ago and are still trading from Bordeaux today.
For more, see:
Owner Jean-Bernard Grenié and Wine Journalist Panos Kakaviatos Presented the Wines of Chateau Angélus and Chateau Daugay at Black Salt Restaurant in Washington DC, USA
Today, there are 400 négociants on the Place de Bordeaux, and most labels are purchased by an average of 40. Each chateau works with a different number of negociants. Some properties work with 5 different negociants, others work with over 100.
Of course, a few properties, most notably Tertre Roteboeuf in St. Emilion sell direct and do not offer their wines for sale to negociants on the Place de Bordeaux.
As for the courtiers, before phones, faxes and Emails, traveling by horse or carriage between the negociants quarter in Bordeaux City and the chateaux took an entire day. The courtier stepped in and carried messages back and forth between the negociants and the chateaux, helping to arrange an agreement between the two parties. For this role, the courtier earns 2% of the transaction. In 1855, it was the brokers who set the ranking for the classification.
In today’s world, when communication is instant, their role has become questionable. There are over 120 active courtiers. But the number of courtiers working with the top properties is small. Less than 20 are actively working with the most famous estates.
As for tranches, where the production is released in slices, very few chateaux release their wine in tranches. That practice is mostly limited to the First Growths.
Changes in the system have taken place, but in ways the long-established negociants are not happy with. They have more competition for allocations of the top wines than they were use to obtaining. This is because some of the top properties have started their own negociants companies, not only to sell their wines, but to market the wines of other chateaux as well. Plus, some companies, like Millésima. have an Internet division that sells directly to consumers.
Chateau Latour told its negociants that 2011 will be the last vintage it sells en primeur. From now on, only bottled wines will be sold from the winery, and vintages will be released when the chateau believes they are ready to drink.
One reason is that modern wine lovers are less interested in buying wines and aging them, particularly in Asia, and many are concerned with the provenance of top wines sold in the world. In other words, they want to buy wines for drinking that are properly stored. Latour is currently increasing its storage space at the chateau with a perfectly controlled environment for wine.
For more information, Jeff Leve from The Wine Cellar Insider has an excellent write-up about "En Primeur, Negociants, Courtiers, the Quai de Chartons and the Place de Bordeaux" on his website.
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