Jancis Robinson’s most recent piece is a reminder that she is that rare beast a ‘wine journalist’, as opposed to a ‘wine critic’ or ‘wine writer’. What’s the difference? It’s simple: as well as using her finely-tuned palate, she asks ‘why?'.
So, while the raison d’etre behind her article was a blind tasting of super-premium California wines from locally-owned and French-owned estates hosted by recent California investor Florence Cathiard of Château Smith Haut Lafitte, Robinson wanted to know the reasons behind the growing level of investment by French producers generally in California, Oregon and Virginia.
Christian Seely of AXA Millésimes, owners of Chateau Pichon Baron offered a simple, and I would say ‘political’, answer most wine writers would happily accept: "it’s rather logical and quite interesting to see somewhere else that makes great Cabernet but is very different". And leading Burgundian, Etienne de Montille, certainly had a similar explanation for his family’s southern California venture.
Follow the money
But, for the Bordelais in particular, there is another, more profane, reason: distribution and margins. At home, they all rely on the negociants of la Place de Bordeaux to sell each vintage of their wine. In return for almost guaranteeing to take a large volume of their harvest en primeur, these merchants get to more or less dictate prices for all but the greatest and/or smallest estates, usually on the basis of what the neighbouring properties are asking and their comparable scores from – mostly – Anglo-Saxon critics. My friend and colleague, Felicity Carter co-presented an excellent series of Areni Global podcasts on the subject earlier this year, but none of the chateau-owners interviewed were as frank as Cathiard, who told Robinson, “we made our small fortune in wine thanks to the Place, but now that interest rates have risen, the Place is sick”. She then ‘mimed slashing her throat.’
It is interesting to compare the prices of Cathiard's French and California wines. According to Wine-Searcher, the average cost in the US of a bottle of Smith Haut Lafitte is $135, a figure that includes the margins of a negociant, importer, wholesaler and retailer. The same 75cl quantity of Cathiard’s Founding Brothers, bought directly from the Napa estate in California is $225, but this is its ‘second’ wine. The first, Cathiard Vineyard, is $395 – not far off three times the Pessac Léognan.
Better still, Cathiard and her husband Daniel, get to choose for themselves when to release their California wines – they aren’t bound by the en primeur calendar – and the price they are going to ask. And, crucially, they can communicate directly with the people who are going to buy and drink them.
Sidestepping the three-tier system
For Bordelais like these, there’s another potentially huge benefit in having a foothold in the US industry. The rules that allow them and other US producers to sidestep the three-tier-system by selling their wine directly, also apply to the wine they make overseas.
Of course, French producers could achieve a similar objective by buying a US importer/distributor and effectively becoming part of that system. But doing so would not give them the quality of relationship that can be created between a winery and its retail customers.
As Cathiard told Robinson. “My niece is now running our Napa boutique, selling our [French] wines at the same price as the Place but at a much higher margin.”
Two way street
This works both ways, of course. As owner – since 2022 - of Chateau Lascombes, Gaylon Lawrence of Lawrence Wine Estates can sell the wines of that Margaux estate alongside the ones from his California properties such as Heitz Cellar, Burgess, Stony Hill and Ink Grade.
Robinson quotes Pierre Graffeuille, of the Virginia winery, Lost Mountain, which is under the same ownership as Château Montrose, as saying “owning a vineyard in the US gives direct access to one of the largest wine markets in the world. Moreover, US wineries have a great expertise in ‘direct to consumers’ through their wine club and hospitality programs which can be inspiring.”
Historically, despite the simplicity of driving to the vineyard to make a purchase, or placing an order over the phone or online, surprisingly few Europeans buy wine directly, while the concept of a subscription wine club is almost unknown. Will the profitable US experiences of producers like the Cathiards change this situation? Probably not in Bordeaux as long as la Place holds sway.
The usual explanation for la Place from its apologists is that ‘it works’, and its network of negociants is undeniably helpful for Bordeaux estates and non-French producers alike when selling their wine in distant markets like Vietnam or Brazil. However, while Bordeaux estates rely on la Place for distribution in their domestic market, Opus One, the first non-Bordeaux estate to join the platform, sensibly retained control of its US sales. So, Opus One has a far better list of its American fans than an equivalent Médoc or St Emilion chateau would have of the people who drink their wines in France.
French producers also appreciate the skill with which the negociants manage to place ‘difficult’ vintages with supermarket chains for sale during their seasonal Foires à Vins wine fairs, but there is no reason why the chateaux could not strike these deals themselves if they really wanted to do so. Any such step, and a move to US-style DTC distribution - the logical consequence of increased wine tourism - would, however, certainly force the arcane old institution of la Place de Bordeaux to change its ways.