The winegrowers blocked Les Grands chais de France in Landiras and the Système U logistics base this Thursday, February 22. They point the finger at the traders. Unfair accusations?
We understand the despair of these winegrowers. Half of the traders also own vineyards. We know what it costs to produce a wine. There is no opposition to be entertained. We are all in the same boat but threats and denunciations do not help.
Transactions at knockdown prices at 650 euros per barrel (900 liters) have been carried out for months to…
The winegrowers blocked Les Grands chais de France in Landiras and the Système U logistics base this Thursday, February 22. They point the finger at the traders. Unfair accusations?
We understand the despair of these winegrowers. Half of the traders also own vineyards. We know what it costs to produce a wine. There is no opposition to be entertained. We are all in the same boat but threats and denunciations do not help.
Transactions at knockdown prices at 650 euros per barrel (900 liters) have been carried out for months for batches of red Bordeaux. Even though production costs are approximately twice as high. Is this moral?
At the end of December 2023, the average price of a barrel was 980 euros. This is just an average. Some lots are traded for more than 1,200 euros. Others well below. We are aware that this is not viable for the producers concerned. It is even more difficult for young winegrowers who have made great efforts to invest.
Lionel Chol has been president of Bordeaux Négoce since 2016.
Bordeaux Négoce
Why not better promote field work?
Trading does not determine the price. The latter is the result of a market balance between supply and demand (1). We have been working for more than ten years on rebalancing supply/demand. I am thinking of the inter-professional reserve to regulate wine volumes or the harvesting plan. The two families of the inter-profession have agreed to finance part of this plan to the tune of 19 million. A considerable effort. It’s 26 million with interest rates.
Merchants also pushed for the diversification of Bordeaux with the rise of Crémant. We are working on easier-to-drink wines that meet market demand with Atlantic IGP (Protected Geographical Indication) and VSIG (Wine without geographical indication). We are running major promotional campaigns at the same time. We need to open niches and revitalize them. This doesn’t happen overnight.
What are the prospects?
There is a glimmer of hope. It is weak but it exists. There is a mirror effect between the stock level of wines and their price. We know that the market is balanced with a stock of red Bordeaux equivalent to twelve months of production. When stocks are very low, like in 2017, prices rise. When stocks rise above fifteen months, prices plummet. This is what happened recently. We went up to nineteen months! The figures from the beginning of February are encouraging: fourteen months of stock. It doesn’t take much to go back to twelve months. The market is gradually freeing up. Unfortunately, this will not happen very quickly.
Bottles of Bordeaux sold for 2 or 3 euros on supermarket shelves are bad for the brand image in the short term but also for quality in the medium term.
Prices are abnormally low. I remind you: the market is not made only by trading. I don’t want to stigmatize mass distribution. A good part of the volumes are also sold by cooperative cellars and wine growers who are caught by the throat. Let’s take advantage of government dynamics to sit around the table: producers, traders and distributors. Let’s try to set up a tripartite convention as is done in other regions. If we want a decent price quickly, this will come through a new legislative mechanism. Too low remuneration of winegrowers has consequences on yield and quality. We must secure a minimum income for wine growers.
Are the margins correctly distributed today?
We always have the impression that the grass is greener on the neighbor’s side. Trading is not in a good situation either. It is suffering because of falling volumes and margins. The profitability of bottler traders is seriously damaged. The real problem currently is the price of the bottle. At such low levels, no one makes money. We should have bottles of Bordeaux for 5, 6, 7 euros like ten or fifteen years ago. Unfortunately, the market is decreasing faster than the stacking of measures launched in recent years by the inter-profession.
(1) The interview was carried out before the decision of the commercial court on the case between the Médoc winemaker Rémi Lacombe and the négociants Cordier and Maison Ginestet. Asked at the end of the day Thursday, President Lionel Chol did not wish to react directly.
