All hail Bordeaux -- again

IT’S springtime in Bordeaux; buzz is in the air.

France’s most important wine region is giddy with early proclamations that 2005 is the “vintage of the century.” Rumors are flying that next week, when Bordeaux’s flagship vintners -- Chateau Lafite Rothschild,Chateau Petrus, Chateau Margaux, to name a few -- are expected to announce prices, the ‘05s will shatter records as the most expensive new wines in history.

A few high-priced top-flight Bordeaux chateaux are expected to tag their wines at prices approaching $500 a bottle, double and, in some cases, triple last year’s prices. Wines from Bordeaux’s previous “vintage of the century” -- 2000 -- will look like a bargain.

Wait a minute. Two such celebrated vintages in the first five years of the century? And didn’t the excessively hot weather of 2003 also result in “some of the greatest wines” ever made? You don’t have to live in Hollywood’s backyard to recognize hype.

“The Bordelaise are masters at manipulating the market,” says Robert M. Parker Jr., who writes the influential “Wine Advocate” newsletter. This year, the top chateaux are testing the limits of consumer tolerance, using their centuries-old marketing structure to push prices ever upward.

How do they do it? By delaying price announcements and releasing wines for sale in small batches, producers are making an effort to heat up demand in an already hot year. The frenzy over wines at the top of the market likely will boost prices for all Bordeaux wines -- not only for the critically acclaimed ‘05s from the big-name producers, but also for the vast supply of table wines, the stuff mere mortals can afford to drink.

The top-tier 2005 Bordeaux wines won’t be available to consumers for two more years. But Bordeaux has a highly orchestrated system for selling what are known as “futures,” which come onto the market producer by producer over a several-week period. Futures for this vintage began to be marketed by wine shops and on Internet sites last month. Customers purchase futures in order to get prestige wines at today’s prices, hedging against possible increases even before the wines are released.

This year’s early futures offerings have been from less famous Bordeaux chateaux, so the picture’s not yet complete. Still, on average, the chateaux have announced prices 30% to 100% higher than the prices for their 2000 wines.

So how are the futures prices determined? The catch is that consumers who buy futures are buying wines based on buzz. The buzz is generated by reviews from wine critics and by chatter among the wine buyers who participated in Bordeaux’s annual barrel tastings held at the end of March through early April. Critics, such as Parker, are tremendously powerful during futures sales because so many buyers adhere to their recommendations. (Bordeaux’s least expensive wines generally aren’t sold as futures to the public.)

And what are the critics saying about the 2005 Bordeaux wines? There is broad agreement that the vintage is exceptional. The hot, dry weather last year resulted in smaller grapes with high tannins and concentrated juice. It was possible to harvest grapes in October, late enough to allow sugars to rise to higher than normal levels. Cool nights preserved the acids, enhancing the wines.

“The 2005 vintage is characterized by very high levels of everything -- phenolics, acidity, alcohol,” says Jancis Robinson, a leading wine critic based in the United Kingdom. What makes the vintage unusual, she says, is that, “in most cases they are all in balance.”

But the greatest wines of this vintage aren’t for everyone, and not just because they will cost a fortune. “Yes, it’s a top vintage,” says Parker, “but it’s a tannic vintage. The [Cabernet Sauvignon-based] wines from the Medoc are going to shut down because of the high tannins and won’t be approachable for 15 or 20 years. People who buy the wines better be young, or they are buying these wines for their children because they’ll never get to drink them.”

Wines that are “shut down” are also called “asleep.” This phase is typical for fine wines designed to improve with time in the wine cellar. For the best wines from the 2005 vintage, the phase is expected to last for as long as 20 years.

At 63, Lou Liuzzi, owner of the Wine Hotel, a wine storage facility and wine shop on 3rd Street near La Brea Avenue, says he’s too old to buy the big-name wines from the 2005 vintage for himself. Still, he sells futures and plans to buy some 2005 wines for his cellar.

“I’ll buy the lesser names, the easier drinking Bordeaux,” he says, naming minor St. Estephe producer Chateau Petit Bocq and Chateau Faizeau Vieilles Vignes from Montagne-St. Emilion as two favorites among wines already released for sale as futures.

Bargain hunting

IN general, Bordeaux’s Right Bank wines, the Merlot-based wines from St. Emilion and Pomerol on the north side of Bordeaux’s Dordogne River, a southern tributary of the famed Gironde River bordering the Medoc, are expected to be drinkable earlier, in 10 years rather than 20. The Pomerols, in particular, are spectacular in this vintage, according to Parker.

“St. Emilion is where the bargains are,” says Don Schliff, the Bordeaux expert at Wine Warehouse, a leading wholesaler of Bordeaux in California.

Bordeaux makes at least 750 million bottles of wine a year. With that much wine, there are dozens of quality categories. The hierarchy dates back to 1855 when members of the Bordeaux Chamber of Commerce categorized the region’s wines for a Paris exposition.

Based on price and quality, they listed 61 red wines (almost entirely from Haut-Medoc), as well as some dessert wines, as classified growths, or grands crus, ranked first through fifth growths. Chateau Lafite Rothschild, Chateau Latour, Chateau Margaux and Chateau Haut-Brion were the original first growths. Chateau Mouton Rothschild was added to the club in 1973. The wines of Pomerol and St. Emilion were excluded from classification.

Today, the grands crus classes of the Medoc along with a handful of unclassified producers from other districts, including Chateau Cheval Blanc from St. Emilion and Chateau Petrus from Pomerol are at the top of the heap.

Wealthy wine collectors are willing to spend whatever it takes to secure these wines for their cellars. And there are dozens of very good wines in the middle of the market. Less celebrated Bordeaux wines known as petits chateaux have always been available for as little as $10 a bottle in U.S. wine stores. This year prices at the low end are expected to rise by $3 to $5 a bottle.

That’s not the only reason the 2005 vintage might not be attractive to bargain hunters, Robinson says. “The 2005 wines will have been made better at the top end because the chateaux put more effort in every year,” she says.

But the lesser producers in Bordeaux, who have been hammered by international competition, “are suffering greater financial hardship now than they were in 2000. They may not have made as much of the vintage’s potential in 2005 as they did in 2000,” Robinson says.

All in all, says Parker, “There is way too much hype. I think it is an exciting vintage for the aristocrats in the Medoc. In Margaux, I have never tasted as many great wines. Graves and Pomerol are strong. But I wouldn’t say it’s better than 2000.”

Still, prices will be higher, according to Pascal Loridon, Bordeaux’s international marketing director, because demand has increased since 2000.

Not only are Americans buying more of these wines, he says, but in the last year, the newly rich of China, India, Russia and South America stepped up their buying as well. The Japanese, who in the past avoided the futures market, have jumped in early this year, he says.

And the major chateaux are making less wine than they made in 2000. Chateau Palmer, says Palmer’s director of development Bernard de Laage, produced a third less wine than usual because of the drought. Other top producers also report reductions in production.

Palmer, a third growth chateau, is among the many producers who delayed announcing prices for the 2005 vintage. On Tuesday, Palmer futures came on the market in New York at $240 per bottle. More announcements are expected to be made by the end of June, a month later than usual. It’s a gambit to make certain they have the extraordinary demand to support the record high prices they plan to charge. “No one wants to leave any money on the table,” Loridon says.

Also, the major chateaux are rumored to be releasing less of their production to the futures market this year, says Parker. Trade buyers expect only 10% of the total 2005 production of these top wines will be released for sale this month.

The hope is that consumers will rush to buy the limited supply, bidding up prices. Months later, when the chateaux release more of their 2005 vintage, they will be able to raise prices again.

Top producers are likely to get their high prices, says Wine Warehouse’s Schliff. The question, he says, is whether he can secure the supply he needs to satisfy his customers’ demands.