French fine wine prices stabilise for now

By Yvonne Lorkin

James Bond may have cause for concern but most other fans of fine French wine can relax: your habit should not become significantly more expensive in 2013.

After years in which lovers of burgundy, bordeaux and champagne have had to put up with the cost of their favourite tipple rising inexorably, merchants anticipate that the prices of the 2012 vintage will either stabilise or rise by only modest amounts.

Difficult weather conditions earlier in the year will reduce the quantities from some top producers, which would normally point to consumers being asked to pay more.

But the impact of reduced supply is offset by the uncertain global economic backdrop and there has been little advance buying by speculators gambling on prices rising between this year's late harvest and the first 2012 bottles coming to market.

"The current climate certainly won't encourage anyone to put their prices up without first knowing what the demand is like," says Nicolas Ozanam, one of directors of UMVin, a trade body which represents the producers of 70 per cent of France's wine output.

The strong upward trend in prices of the best French wines in recent years has been underpinned by surging demand from Asia, but Ozanam says producers cannot 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."

Exports account for 40 per cent by value of France's wine production with Britain the biggest overseas market ($1.89 billion of sales in 2011), followed by the United States ($1.36 billion), Germany ($1.09 billion) and Belgium ($790 million).

The markets in China, which bought $763 million worth of French wine in 2011, and Hong Kong ($659 million) remain smaller but are growing faster having risen by 40 per cent and 27 per cent respectively last year.

Two wines that will be more expensive over the years to come are Chateau Pavie and Chateau Angelus, leading estates in Bordeaux's Saint-Emilion region.

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 class A" (first growth, A class).

The upgrade 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 brands with Angelus in particular having been featured in some 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 bottle of Cheval Blanc will currently cost you two and a half times the price of Angelus," he says. "We will reposition ourselves over the course of four/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."AFP

- Hamilton News

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