Confusing isn’t it? Read on. Barrel tasting scores are starting to roll in for the ’08 Bordeaux vintage, which means it's also time to begin seeing prices for Bordeaux futures. In case you’re not familiar, a barrel tasting is exactly as you would think: wine is extracted and tasted from the wood barrel that is used for aging wine before it is ready to be bottled; this is not considered finished wine. Barrel tasting usually takes place in the wine cellar, which is where the winemaker constantly monitors the condition of the wine during aging. These wines are very, very young so it takes considerable knowledge and skill on the part of the winemaker (and the wine critics that barrel taste and rate wine at this stage), to understand what is going to happen next and how the wine will develop and age over time.

When wine critics like Robert Parker from Wine Advocate (WA) or James Suckling from Wine Spectator (WS) arrive at an estate to evaluate wine in production, the intent is to give a range of scores that a wine should fall into once it’s finished and bottled. For example a barrel tasting score of 90 – 93 points would express where the wine might eventually land when it’s finally bottled and such scores have a direct and substantial influence on wine futures prices. Keep in mind too that in the case of high-end Bordeaux, even when it’s finished and bottled, it’s always too young to drink for many years. More than anything, fine Bordeaux needs your patience.

As for futures, they’re pretty much like any other financial instrument or commodity in the market. In Bordeaux, brokers buy the wine from the châteaux before it is even bottled and sell it to importers, who sell to distributors, who sell it to retailers and eventually us wine consumers. The idea is that if you buy Bordeaux futures at a low price before the wine is even finished, it will hopefully rise in value when it is released and distributed to the market. Buying Bordeaux futures is the same as other instruments in that if you guess about the future value correctly, you will be rewarded for your brilliance (luck usually), if you guess incorrectly you will loose your tail (bad luck usually). One of the biggest smackdowns in Bordeaux futures happened with the 2005 vintage, which was touted by the press as possibly the best vintage in a century. Investors, collectors and speculators of wine bit the bullet on '05 futures. 

2005 First Growth Château Lafite-Rothschild futures were selling for $1200 to $1500 per bottle but can now be purchased for about $800 at retail. Pretty much the same with Châteaux Latour, Margaux, Mouton-Rothschild and Haut Brion. So over-hyped was this vintage (it was great, but not so great that there had to be a financial blood bath of this magnitude) that many buyers of Bordeaux futures are now gun-shy and understandably so. As far as I can determine, anyone that bought a case of First Growth 2005 en primeur (as a future) lost at least $2400 per case in value. Sadly the châteaux have nothing to do with this, yet they are often vilified for charging high prices and wrongly accused for futures investors loosing money. It’s the brokers and nêgociants in Bordeaux that have been the market makers for centuries and control prices, just like in equities and currency. And if you can’t afford to loose money with investments (who can these days?), it’s much safer to not play the game.

The generally marginal (in quality) 2006 vintage did not lower prices much from ‘05 as brokers attempted to maintain their margins and extravagant prices. The 2007 vintage, dismal compared even to ’06, lowered prices a bit but by then buyer confidence in Bordeaux futures was already struggling to breathe. It’s going to be a really tough sell for 2008 futures and I’m sorry to see great estates suffer because of the archaic systems to which they are subject. In a perfect world,  the multi-tiered system would give way to less layers of outside control but considering the long history and political capital these brokers have, certainly evaporates any possibility of that happening any time soon. 

Futures or not, store shelves will make way for new wines that will be released and a glut of un-sellable wine is expected. For the 2008 Bordeaux vintage, it appears that critics favor the Right Bank over the Left this year although their scores (at least Parker’s scores) so far were a little more generous in Left Bank’s Pessac-Léognan district. This district is the furthest south of the other major Bordeaux districts of the Médoc and here in Bordeaux, weather is king and can vary considerably within small distances; I mean sometimes even by meters. In the Right Bank, St. Emilion and Pomerol estates scored better and can generally be enjoyed at a younger age because they are made primarily with Merlot as opposed to Left Bank’s high content of Cabernet Sauvignon.

And prices? You won’t believe it! These prices are incredibly dialed back from Bordeaux former glory days – maybe there’s hope after all. The only 2008 First Growth score I could find so far is Château Margaux, which was rated at WA 95-97, WS 90-93 selling for $290 per bottle. Super Second (the more popular and famous Second Growth Bordeaux, so named as ‘Super Seconds’ by Parker some time ago), Ducru Beaucaillou came in at WA 96-98 and is selling for a paltry $90 – compare this with its ’05 futures price for this wine in the $300 to $350 per bottle range and which now sells for around $170 at retail! A few other examples include Montrose WA 95-97 for $67, Château Palmer WA 95-97 for $145 and Leoville Las Cases WA 95-97+ for $120. Price reductions like these certainly speak volumes about our current economic plight and efforts to correct trespasses into our bank accounts in the recent past.

Except for First Growths and the Super Seconds, so far the ’08 Left Bank fell pretty flat with barrel tasting scores in the upper 80s to low 90s. Still, these all are all shaping up to be relatively very good deals depending on what happens with the finished bottle. The only drawback for some aficionados is that the best of these will require ten to fifteen years of bottle age before they should be enjoyed.

Consider the fact that you have now seen the future.