mhicken March 22nd, 2010
Interesting story on Bloomberg.com this morning by Elin McCoy on the continuing fallout on Bordeaux prices following Diageo’s withdrawal as the major supplier of Bordeaux to the North American market. Canadian buyers and agents have largely been insulated from the effects of this due to our monopoly distribution systems which do not easily allow market driven price fluctuations. However, I am sure there are many Canadian lovers of Bordeaux who are taking advantage of the situation by buying product south of the border.
Tags: bordeaux, cross-border, diageo, liquor boards, prices, wine marketing
mhicken November 9th, 2009
Interesting story this morning on Bordeaux prices. Diageo, one of the largest purchasers of Bordeaux worldwide, is exiting the business and liquidating their huge Bordeaux wine inventory at greatly reduced prices. This is creating a cascade of downward price pressure for Bordeaux in the U.S. with retail prices ebbing below wholesale in some cases. Here in B.C., we are, of course, “insulated” from bargains by the LDB … but will consumers keep buying Bordeaux here when they see prices collapsing south of the border?
Tags: bordeaux, LDB, marketing, prices, retail, wholesale, wine
mhicken August 24th, 2009
I previously wrote a post about the issue of Bordeaux price problems given the global economic slowdown. Here’s some interesting evidence on that front. Today, I received a promo email from a leading wine retailer in the U.S. who has secured major discounts on 2006 Bordeaux because of slow sales. To give you an idea of the discrepancy in prices between the BC LDB prices on the 05 vintage and the street price on 06 in the U.S., here are some comparisons:
(Chateau 05 BC price - 06 US price)
Angelus 475 vs. 119
Bahans Haut Brion 99 vs. 37
Bellevue-Mondotte 475 vs. 175
Cheval-Blanc 1299 vs. 329
Cos 349 vs. 75
Ducru Beaucaillou 319 vs. 86
Leoville Las Cases 549 vs. 130
Mouton Rothschild 1100 vs. 545
Pichon Baron 225 vs. 62
Pichon Lalande 245 vs. 98
Tags: bc, bordeaux, LDB, prices, u.s., vintages, wine
mhicken May 11th, 2009
A couple of interesting news items this morning …
The Vancouver Sun is reporting that liquor sales in BC are down by 7.2% by volume and 4.9% by value for the first 3 months of 2009 as compared to the same period in 2008. The article speculates that the drop could have been caused by “bad weather”. However, personally I doubt that is the cause. The weather is generally not good in the first 3 months of any year and the Weather Network confirmed that the weather was really no worse this year than last. An obvious culprit is the economy but historically liquor sales tend not to drop dramatically during economic slumps. Perhaps, the BC government and liquor board may wish to consider another explanation … taxes (and therefore prices) are too high. It’s my belief that prices in BC have simply become uncompetitive and unrealistic. When a consumer knows that the same product can be purchased for half the price south of the border and only slightly more than that in Alberta, you have a problem. Consumers feel (rightly) that they are being gouged and will likely either limit consumption or attempt to source product from elsewhere. The BC government needs to have a serious look at the pricing structure in this province if it wants to address this issue.
And in France … the economic slump has seriously affected the sales of high end Bordeaux wines which, as you might expect, are more susceptible to economic circumstances than lower priced products. In response, the Bordelais have slashed prices for their futures sales. However, this has created cascading problems for the entire industry because the 2008 wines are now generally much cheaper than the 2007s. The latter was an inferior vintage and retailers and distributors are now stuck with 2007 product which they cannot sell … some are reacting by slashing prices on those wines and taking a loss. In Canada, it will be interesting to see how the liquor boards react. The LCBO and BC LDB are big buyers of Bordeaux futures and, as a result, a lot of 2007 wines will be heading here for release next year. Consumers are unlikely to want to purchase those wines at the prices that the boards paid, particularly once they have been marked up with all of the hidden fees/markups/taxes. Will the liquor boards take a loss and slash prices? If so, how will that affect private retailers who are also trying to sell these wines? Looks like there is a headache brewing.
Tags: bc, bordeaux, economy, france, pricing, sales, taxes, wine
