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Courtiers & Négociants

Bordeaux Wine Guide:

Introduction
History & Geography
Region 1: Graves
Region 2: Sauternes
Courtiers & Négociants
Region 3: Margaux
Region 4: St Julien
Region 5: Pauillac
Region 6: St Estèphe
Region 7: Médoc, Médoc
Osmosis & Extraction
Region 8: St Emilion
Region 9: Pomerol
Bordeaux - the Future?

Appendices:

Médoc 1855 Classification
Sauternes 1855 Classification
Graves Classification
St Emilion Classification
Cru Bourgeois Classification

My guide to the history and geography of Bordeaux has given a few details of the early development of the Bordeaux trade, which developed over many centuries, at times helped and then hindered by tax breaks and tax burdens respectively. By the early 18th Century claret, a term derived from clairet describing the lighter wines of what was already a bygone age, had accrued several solid markets, which certainly included all the nations of the British Isles. As has already been mentioned in this guide, the Médoc was established following its drainage by Dutch engineers in the 17th Century, and very quickly every gravel croupe began to sprout vines as the local nobility, as well as the merchants and lawyers who aspired to such titles, purchased land alongside the Gironde. All the ingredients for success were present; on one side there were good quality vineyards combined with an appropriate level of investment from the rich proprietors, and on the other a willing, solvent body of consumers eager to buy and sup the wines. It only needed, it seems, a group of merchants ready to deal with the business of acquiring, bottling and transporting the wines. This was, it would seem, a relatively straightforward requirement. And such merchants already existed. So how has this simple situation mutated into the circus that is the Bordeaux wine trade today?

Firstly and perhaps most significantly, the superior attitude of the Bordeaux nobility was such that they refused to deal with the chattering merchant classes, the very men who would pay them for their wine, and thus on who their livelihoods truly depended. And thus the void between them was filled by the courtier, who would buy from the proprietors and then pass the wine onto the merchants (the négociants), taking a cut (typically 2%) along the way. Their job was solely buying and selling, and in doing so they accrued great wealth and also considerable power. In contrast, the role of the négociants was not only to take and ship the wine, but a little judicious blending along the way was also par for the course. In doing so, they too made their fortunes; a typical négociant would take a 10-15% slice of the action. Hermitage was a popular and respected addition, a practice openly declared on the wine lists of the day, but I suspect wines from further south in France and also from Spain were frequently blended in. This the négociants did in their cellars which today still line the quayside in Bordeaux.

Bordeaux wine guide

The courtier-négociant system was always the accepted norm, although the possibility of adultery and other shady practices was, even then, sufficient for some to indicate that the only sure way to guarantee the quality of the wine was to buy direct from the chateaux proprietors. Although this may have worked for Thomas Jefferson, it was not a realistic option for the majority. They had to buy from the merchants and importers who sourced their wines from the négociants, who acquired wine through the courtiers in one of two ways. Either they could buy each year after the harvest according to the market price, or they could purchase by abonnements, a subscription system in which the merchant took a sequence of vintages - as many as ten in a row - at a set price, a process which benefited the chateau in the weaker years but the merchant in the better ones. It was also possible for them to buy sur souche, when the fruit was still on the vine, another gamble that could benefit either the chateau or the businessman depending on the quality of the vintage. This latter practice fell into disuse after the proprietors had their fingers burned with the 1961 vintage, however, in which too many proprietors were forced to honour agreements which saw wines of the highest quality, all sold sur souche, going for a song.

Despite the apparent complexities of the courtier-négociant system, which seems rich in redundant elements, it continues through to current day, and it has some curious side effects that are worth noting. One is that the proprietors have very little knowledge of what happens to their wines once they leave their cellars, as this is very much in the hands of the courtiers and négociants. If you intend questioning a proprietor at a tasting event as to where you can purchase his or her wines, do not be surprised when you realise that they simply have no idea. Once they have sold the wines, they lose sight of them completely. It also means that they have very little control; keen to maintain their image of exclusivity many proprietors request that their wines not be sold on to supermarkets, either in France or abroad. But classed growth claret regularly pops up in supermarkets such as Costco, both in Europe and the USA. How many of the proprietors are aware of this?

Régisseurs & Primeurs

Although the Revolution separated many noble families from their assets (and also their heads) the Bordeaux market place survived, the major difference being that now the courtiers were dealing with new money, rich bankers such as the Rothschilds, rather than the nobility of old. Many regarded their Bordeaux estates as little more than a country retreat with an interesting viticultural sideline, and the running of many vineyards was left to the régisseur, essentially an estate manager who would also oversee the harvest and vinification. This is effectively the business model still most commonly employed today. Any particular chateau and vineyard is more likely to be in the ownership of a multinational corporation (which provides investment) or at least a family-run business (which avoids inheritance problems) than individual family members, but they are still largely run by employees, whether they be a true régisseur or one of the family. What has certainly changed over the years, however, is the circus that surrounds the sale of Bordeaux.

Bordeaux has always been sold in barrel, but in centuries past that was because the oak barrel was the norm not only for storage but also the transport of wine. Once sold, the barrels travelled to the cellars of the merchant in question, perhaps in London, or Bristol, or elsewhere, and it was at that point the wine would be bottled for sale and final distribution. Today, of course, although the wine is still in barrel at the time of trading, it is no longer shipped in this container, but rather it is bottled first. In some cases this is a relatively recent development, as although many properties have been undertaking chateau-bottling for decades, it has only been compulsory since 1972. And yet today, the Bordeaux system still revolves around the tasting, assessment, selling and buying of unfinished wines in barrels, more than a year before many of them are likely to be assembled into the final blend and bottled. Between their assessment and purchase and their bottling, as well as the all important assemblage they may also experience racking, fining and filtration, or even more novel manipulations such as micro-oxygenation. Naturally this has led to the accusation that the wines presented in the spring tastings each year are not truly representative of the finished product. There have even been those who claim the existence of 'Parker barrels', and that it is the wines drawn from these, fashioned so as to appeal to the palate of the critic Robert Parker, that may be presented on his visit. It would seem a logical practice, as Parker's scores drive prices and markets, but the existence of such samples are vehemently denied by all involved. Nevertheless, regardless of whether this very dubious practice exists, the concept of buying based on the assessment of an unfinished product still seems faintly ridiculous.

Bordeaux wine guide

The Union des Grands Crus de Bordeaux en primeur circus begins with the release of a wine by the chateaux, with a prix de sortie. As all knowledgeable proprietors know, however, the trick is not to release all your wine, but rather a small slice, or tranche. After testing the market in this way, and also using the cheaper cases to reward loyal courtiers and négociants, the price of subsequent tranches can be increased. It seems reasonable enough, as subsequent price rises are effectively driven by demand and the forces of a free market, but it is perhaps not really that straightforward. With increasingly small tranches, some proprietors claim fair play by releasing a miniscule amount of wine at a good price, before doubling or even trebling the asking prices of subsequent slices. The négociants naturally follow suit, and a lucky few consumers - perhaps loyal customers - will obtain the wine at a good price, but most will pay top whack, in a market that has been stoked up just a little bit more by that attractive first prix de sortie. To me, though, the business of tranches seems to be increasingly irrelevant. As the price of Bordeaux continues its climb skyward, increasingly expensive release prices on the back of hyped-up consumer interest, Parker scores, economic affluence and the opening up of new markets dampen the difference between tranches. And after all, there is no point worrying about the cost of the second tranche if the first one is out of your price range anyway.

One solution to the problem of unrepresentative samples at the UGC tastings would be to delay the event, until a point when the régisseurs have a better idea of the final blend, perhaps later in the year, or even the following year. This was a point argued by Dr Alain Raynaud of Chateau Croix du Gay during his tenure as chairman of the UGC, but it was not an initiative that bore any fruit. The resistance, of course, reflects the benefits of the system to the Bordelais. It brings in cash only months after the fruit has been harvested; thus the sooner the circus gets underway, the sooner the proprietors get paid. Having said that, the drawn out campaigns of recent years, which have seen some wines released three months or more after the event kicked off, perhaps suggest that some, at least, are not so desperate for the cash as we might think. The practice is nevertheless set to continue, and it is the consumer who loses out, as they give the chateaux, through the importers and merchants who market the wine, an unsecured loan in many cases for longer than two years. There used to be a benefit to this early purchase, in that during the two year window the wines would often accrue in value, so the consumer got the best price. But with a high prix de sortie this benefit is today minimalised, if not obliterated. A buyer must always take into account ongoing inflation, as well as the benefits of using the money in an alternative fashion, such as placing it in a high-interest account for two years, when weighing up the value of en primeur purchases. In many vintages, it is financially advantageous to wait and buy the wines three, five or even ten years after the vintage. In others, of course, such as 2000 and 2005, that scenario is less likely. Secondly, that unsecured loan may just fizzle out; the name regularly trotted out in the UK was always Hungerford Wines, a business that went bust leaving many consumers with neither wine nor money. This happened in the 1980s, more than twenty years ago, perhaps giving false reassurance to some that this sort of thing couldn't happen today. Wrong. The demise of U-Vine, Mayfair Cellars and the Cellaret, all down the tubes since the turn of the century, should reinforce our awareness of en primeur as a risk-taker's game.

The solution is, of course, not simple. Delay the whole process by six months, if not a year, even better two. Sell the wines once they are bottled, and properly assessed, and forget this business of providing unsecured loans to the wine trade. Of course, this will never happen; there re far too many consumers who believe in the advantages of the process, and far too many proprietors who truly do have something to gain from the system. So we must live with it, warts and all.

Time to move on to some more of Bordeaux's wine regions I think. Having covered Graves and Sauternes, it is now time to move north to the Médoc.

Next instalment: Margaux