Bordeaux - Classifications and Wine Business Flashcards

1
Q

What was the 1855 Classification based on + who was included (3)?

How were wines ranked (3)?

Particular law involved:

A
  • based on prices then being achieved
  • wines of the Médoc (plus Ch. Haut-Brion in the Graves)
  • and Sauternes.
  • Médoc wines ranked into First to Fifth growths
  • Sauternes into first and second growths
    => d’Yquem = special category of Premier Cru Supérieur.
  • wines must be bottled at the estate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the 5 First Growths, and what appellations are they in?

What is the French name for this group of wines?

A

Ch. Lafite-Rothschild / Pauillac
Ch. Mouton-Rothschild / Pauillac (elevated in 1973)
Ch. Latour / Pauillac
Ch. Margaux / Margaux
Ch. Haut-Brion / Pessac-Leognan (Graves)

Premier Cru Classé

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How many properties were included in the 1855 Classification?

What are the French terms for the different growths?

A
  • 60 leading châteaux

premiers crus
deuxiemes crus
troisiemes crus
quatriemes crus
cinquièmes crus.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

When was the classification of Graves?

What criteria was this based on?

How many chateaux are classified + location?

How does this list differ from the 1855 Classification?

A

1959
- based on pricing, fame and quality as judged by tasting

  • 16 classified châteaux
  • all located within the sub region of Pessac Léognan
  • a simple list (no sub-divisions) and can be for reds, whites or both.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

When was the first classification of Saint-Emilion?

What criteria was the classification based on (2)?

How often is it revised, and when was the last revision?

What are the 3 tiers achievable (in order from highest - lowest ranking)?

A

1955

  • Chateaux judged on terroir, production methods, reputation, commercial considerations
    + blind tasting of at least 10 vintages.

Revised at approximately 10 year intervals, last one in 2012.

  1. Premier Grand Cru Classé A
  2. Premier Grand Cru Classé B
  3. Grand Cru Classé
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

To whom does (and does not) the Saint-Emilion Classification apply?

A
  • only applies to some wines within the Saint-Émilion Grand Cru AOC appellation.
  • wines that are Saint-Émilion AOC or simply Saint-Émilion Grand Cru AOC (no ‘classé’) are not within the classification
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

When was the Cru Bourgeois category created?

Where does it fall in terms of quality level?

When was it revised, and what change was made (3)?

A
  • 1932
  • a level below Cru Classé but still superior quality.
  • revised in 2010
  • Cru Bourgeois status awarded annually to individual wines vs châteaux
  • considered a mark of quality based both production methods + finished product. Any property in
    the Médoc may apply.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What 3 tiers are achievable within the Cru Bourgeois classification?

How long does the classification last?

A
  • Cru Bourgeois
  • Cru Bourgeois Supérieur
  • Cru Bourgeois Exceptionnel
  • lasts for five years.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Using 2 specific appellations as examples, explain why the classifications of Bordeaux have been controversial (3 each):

A
  1. Saint-Émilion classification has been challenged
    - ensuing lawsuits have dented its reputation and value
    - many regard the use of the term ‘Grand Cru’ in the name of the appellation itself to be misleading.
  2. Graves classification = due for revision
    - too many high quality estates not included in the current list
    - producers fear same disputes + problems w/ Saint-Emilion classification will happen to them.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How many estates exist in Bordeaux?

Why is the term ‘chateau’ somewhat inaccurate?

Is the number increasing or decreasing + why (2)?

Is the average estate size increasing or decreasing + how many ha?

Annual production (in bottles)?

A
  • 7,000+ estates
  • château can = palatial mansion or dilapidated farmhouse.

Decreasing
=> small properties are being taken over by larger ones
=> aim = more commercially viable volume

Increasing

  • avg. estate size = 19+ ha
  • generally over 800 million bottles.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What role do co-operatives play in Bordeaux (2)?

A
  • important role in Bordeaux
  • 2018 = 25% of production + 40% of grape growers.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How does annual production in Bordeaux break down by wine type / appellation (8)?

A
  1. Bordeaux AOC (inc. Bordeaux Supérieur) = 44%
  2. Médoc and Graves = 18%
  3. Cotes de Bordeaux = 12%
  4. St-Emilion / Pomerol / Fronsac = 11%
  5. Dry Whites = 9%
  6. Rosé = 4%
  7. Sweet Whites = 1%
  8. Cremant = 1%
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are avg. production costs per bottle for:

  1. Bordeaux AOC
  2. Médoc estate
  3. A Classed growth

What do these costs NOT include (3)?

A
  1. Bordeaux AOC = €0.57
  2. Médoc Estate = €2.35
  3. Classed Growth = €16

costs do not include:
- interest on bank loans
- land costs
=> which increase the costs significantly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

In addition to production costs, what are the many additional costs are incurred by a Classed Growth (6):

A
  • increased vine density
  • harvest costs
  • hugely higher viticultural costs
  • lower yield
  • rigorous grape selection
  • barrel aging (both higher proportion of new barrels + extended time in barrel)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Other than the (many) classifications of Bordeaux, what has become a vital tool for selling wine (2)?

Where has this tool been most successful?

Why is it so effective?

A
  • the 100-point rating system (Robert Parker)
  • copied and adopted by many top critics
    = vital tool for selling wine
  • initially USA but now globally.
  • Scores = easy to understand way of communicating with potential purchasers.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Total value of BDX sales in 2018:
France + Export sales by value in 2018:
Avg. price/bottle in 2018:

Top 4 export markets by value?

A
  • > €4 billion in 2018
  • ~48/52% by value btw/ France and exports
  • avg. price €5.80 in 2018

top export markets BY VALUE:

  1. Hong Kong
  2. China
  3. USA
  4. UK
17
Q

How do BDX sales by volume differ between domestic and export markets (3):

A
  • 56% by volume = France
  • (48% of that = in supermarkets)
  • 44% by volume = export
18
Q

Identify the different steps in the flow-chart below, detailing how Bordeaux wines are sold and reach the final consumer:

A
  1. Grape growers sells their fruit to:
  2. A co-operative or large winery who presses the grapes and produces the wine.
    OR
  3. The wine is estate grown and vinified (eg. required by any Médoc Classed Growths).
  4. Brokers / Courtiers get 2% commission for handling the relationship btw/ the producer and the:
  5. Merchants / Négociants who receive 15% commission for selling + shipping wines to:
  6. Wholesalers / Supermarkets / Importers / Distributors throughout the world, who then sell the wines to:
  7. Retailers (could be on/off premise sales), who then sell the wine to:
  8. the Final Customer.
    **the name for the commercial system by which wine is sold from chateaux -> merchants via courtiers is known as**
  9. La Place de Bordeaux
19
Q

La Place de Bordeaux Terminology:

La Place de Bordeaux (4)

Merchant / Negociant (aka:) (3)

Courtier / Broker (2)

A
  • *La Place de Bordeaux:**
  • the unique commercial system whereby BDX wines reach market
  • few producers sell wine directly
  • wines are sold from the chateaux to merchants / negociants via a broker
  • wines are then sold to distributors / importers / retailers.
  • *Merchant / Négociant:**
  • collectively aka ‘la négoce’
  • responsible for selling ~70% of all BDX wine to distributors, wholesaler and importers around the world.
  • collects avg. 15% commission.
  • *Broker / Courtier:**
  • handles the relationship btw/ the producer (chateaux or co-ops) and the merchant / negociant
  • collects avg. 2% commission
20
Q

How widely distributed are BDX wines?

What will producers do to ensure that their wines are in key markets (2)?

How does this system work (2)?

A
  • distributed to more than 170 countries
  • producers will sell to a number of négociants
  • (as many as 40)
  • number of cases per négociant is set by an allocation system
  • each négociant is allotted a % of production every vintage.
21
Q

What are the 2 strongly contrasting markets for Bordeaux wine?

A
  1. great majority of wine (Bordeaux + Supérieur) = inexpensive + sold in bulk.
  2. classed growths + high-quality estates sold as futures ‘en primeur’ for premium + super-premium prices.
22
Q

What challenges has the inexpensive Bordeaux market faced in recent years (3)?

Who makes these wines (2)?

Where is the majority sold?

A
  • has struggled to raise its price (~€1 / litre for wine in bulk)
  • due to lower demand in France
    • huge competition from other countries (e.g. Chile, Australia) on export markets
  • wine is made by co-ops and small producers
  • or grapes are sold directly to larger wine companies (eg. Castel)
  • Most is sold in French supermarkets.
23
Q

How are Bordeaux wines sold via the ‘en primeur’ system (2)?

What is the basic idea / advantage of en primeur, both for the consumer (2) and producer?

A
  • wines are sold in the spring following harvest, while still in barrel (not finished or bottles) as FUTURES
    => i.e. a paper transaction where wine is sold a year
    to 18 months before it is bottled
  • consumers can secure (typically) hard-to-buy wines
  • and at a lower price vs once they are bottled, shipped, sold at fine wine shops / restaurants.
  • estates benefit from early payment for wine
24
Q

Pros (2) and Cons (3) of the en primeur system for the Consumer:

A

PROS:
- Ability to secure sought- after wines and theoretically at the lowest price
- Option to keep or trade sought-after wines
CONS:
- consumers dependent on opinions of trade buyers / journalists tasting unfinished barrel samples
=> may not truly reflect the final wine
- Risk that intermediaries (négociants, shippers) may go out of business before the wine arrives
- Risk that Prices fall before wine arrives due to economic conditions or quality of following vintages

25
Q

Pros (2) and Cons (2) of the en primeur system for the Estate:

A

PROS:

  • Ability to test market by releasing early lower- priced ‘tranches’
  • Early payment + return on investment can finance next vintage

CONS:
- Risk of underselling vs what might be obtained for the bottled wine
- Potential for financial mismanagement or losses by négociants (that could lead them to go out of business)
=> could adversely affect an estate’s reputation

26
Q

How important is Wine Tourism to the Bordeaux region?

How has this changed slightly (2)?

A

Historically = not a major feature

  • the city of Bordeaux = important tourist destination
  • including La Cité du Vin, Bordeaux’s wine visitor centre.
27
Q

What are 3 key stages in the development of the contemporary ‘en primeur’ system?

A
  • beginning during the period after WWII when the chateaux were struggling financially
  • it was not until the late 1970s that consumers began to take an interest
  • the great 1982 vintage = caught consumers’ imagination.
28
Q

When does the ‘en primeur’ campaign begin in Bordeaux?

What are the initial stages (before sales actually occur)?

A

April following vintage : barrel samples are provided by estates to wine buyers and journalists
=> 5–6,000 wine pros taste + assess wines in barrel

Throughout May and June: châteaux then release their prices.

29
Q

What is the ‘First Tranche’ in Bordeaux and what is its intention (3)?

What comes next (2)?

A

The 1st Tranche (‘slice’): After trade tasting, châteaux – usually through their négociants– put up for sale a small amount of wine
=> price will be heavily influenced by the château’s reputation + experts’ reviews.
=> intended to gauge what the market is prepared to pay for the wine.

Subsequent Tranches: Depending on sales, price will be adjusted
=> Usually, the price goes up for each tranche.

30
Q

After the first and subsequent tranches, how do en primeur Bordeaux wines reach the final customer (3)?

A
  • Trade buyers make decisions (what to buy + quantity)
  • journalists publish scores + reviews to guide consumers.
  • final customer of en primeur wine puts in orders through fine wine merchants.
31
Q

How will wines that are more (3) / less (2) in demand be handled differently during the ‘en primeur’ campaign?

A
  • Wines in demand (esp most rare + most sought-after)
    => sold on allocation
    => this may force négociants + trade buyers to buy wines in lesser vintage in order to maintain their allocation o
  • Wines less in demand may remain with a négociant for some years before they are sold
    eg. in a year when there is little wine to sell or when prices of the current vintages are too high.
32
Q

What 3 factors dictate the success (or failure) of Bordeaux’s en primeur campaign?

How do these affect the campaign’s success?

A

1. quality of the wines
=> top vintages = highest demand

2. prices being asked
=> if too high, estates, negociants + retailers will be stuck with wines that may need to be stored for many years before sold
​=> compromised profitability

3. state of the market
=> eg. if an average vintage follows multiple successful ones, estates = reduce prices to attract buyers.
=> estates reluctant to do so => unsold wine.

33
Q

What does the price paid for en primeur wine include?

What is an ‘ex cellar’ price?

A
  • includes the bottled wine being delivered to the storage of the retailer a year later.
  • en primeur price = ex cellar
    => i.e. excludes any taxes due in the final buyer’s home market.
34
Q

Once en primeur wines are delivered to the retailer, where do they go?

What can the final buyer choose to do with the wines (3)?

A
  • wines typically held in a climate-controlled (temp + humidity ideal for long-term storage) secure storage unit
  • final buyer can then decide
    a) to have the wine delivered
    b) stored until it is ready to drink (a decade or more)
    c) to sell on the wine (theoretically prices will rise as wine matures + availability becomes scarce)
35
Q

How do Bordeaux wines figure into the secondary market?

A
  • accounts for the largest proportion of wines traded on secondary market (esp. First Growths + other top wines)
36
Q

Since when have criticisms of Bordeaux’s en primeur system been present?

What are they and what caused them to arise?

A

Criticisms have been rampant since 2010.

  • boom period of the 2000s (esp. due to increased interest from China)
    => en primeur prices rose considerably.
  • Châteaux continued raising prices even in poor vintages eg. 2011.
    => in the end, this led to falling Bordeaux prices
    => many who had invested in en primeur lost money.
  • top critics’ reviews have been seen as having too much influence on wine prices
    => especially since wines tasted are often not final wine, (final blending + maturation still to occur)
37
Q

What important event regarding Bordeaux’s en primeur system occured in 2012 (2)?

How did this affect both prestigious and smaller chateaux (2)?

A

2012: 1st Growth Ch. Latour announced no more en primeur
=> now several châteaux have reduced the volume of wine they sell in this way.

  • most prestigious châteaux can afford to keep wine and only sell when bottled
  • smaller / less prestigious châteaux need the money en primeur sales generate.