Burgundy 2023: The State of Play
BY NEAL MARTIN |
Two years ago, I wrote that in order to take the pressure off demand for Burgundy—and by that, I refer to the Côte d’Or specifically—there would need to be three consecutive plentiful vintages. That would erode the fanaticism that fuels demand and allow all sides to catch their breath and take stock of the current economic climate, one in which there is less disposable income, higher interest rates and generally more prudence and hesitance.
Three plentiful vintages did not come to pass.
There were two.
Two thousand twenty-four will end up as one of the smallest yields in living memory, with some producers in the worst-affected appellations like Vosne-Romanée and Nuits Saint-Georges facing just 10% of a normal crop (though on average, according to Burgundy’s organizational body, the BIVB, there was a less dramatic 30% reduction across the region). This paints the bountiful 2023 vintage in a different light compared to 12 months ago. Previously, there was some anxiety about surplus supply, especially with what you might call “mid-tier” producers. Now, some consider 2023 a Godsend, allowing producers and merchants to even out allocations. Those producers that are financially able, and crucially, those with available storage in a region where that is certainly not a given, will withhold part of their 2023s and combine them with their 2024s next year. Jason Haynes at Flint Wines, one of the UK’s major Burgundy importers, tells me that following successful pre-releases in December, they will slim down the number of domaines in their main January offer. At Flint Wines’ tasting in London this month, there were no producers from Côte Chalonnaise or Mâconnais present. Also absent were the two or three Côte d’Or producers whose prices tend to remain static after release. These will be sold from stock throughout the year. Like me, Haynes opines that if 2024 had been a normal vintage, we would have seen more price reductions. We will never know what that might have been. Instead, most producers will hold prices level, though discussing the matter with several merchants (including Goedhuis Waddesdon and Justereini & Brooks), most cut their margins to price their 2023s slightly below 2022 levels. This was often done in collaboration with winemakers cutting their margins as well, mindful of the challenging market. A head buyer of a major UK merchant tells me that in their portfolio, around 40% of the wines are offered at 10-15% below last year’s price, just under 10% are priced higher, and the remainder are the same as the 2022s.
How this will play out in the market remains to be seen. A swath of offerings in the Côte d’Or are overpriced, not least after the diminished crop of 2021, when winemakers justified price hikes of up to 50% or 60% by shortage in supply. Be that as it may, the consequence of these increases is that mediocre wines end up on restaurant lists at ludicrous prices, to the point where—surely like many others—I browse the Burgundy section purely out of curiosity. Some restaurants now eschew Burgundy altogether, though many maintain certain producers’ wines as there is still a tidy profit to be made should a diner decide to blow the budget. Indeed, I heard of someone nonchalantly dropping over £20,000 recently. It’s the consumer’s prerogative to spend as they wish, and that money helps pay staff wages during quieter months. On the flip side, the younger generation is priced out of Burgundy. There are plenty of choices for quality Pinot Noir elsewhere: Hemel-en-Aarde, German Spätburgunder, Sonoma, New Zealand, Chile or even, God forbid, Essex.
Sadly, there is a cadre of winemakers in the Côte d’Or who see their wine as a luxury product, like a vinous Gucci bag or Rolex, a trinket for the wealthy. As such, these winemakers regard price as the sole measure of success, which creates an upward spiral of “keeping up with the Joneses.” Some are convinced that there is a conveyor below of buyers for their top wines, assuming that if one consumer rejects higher prices, there is another that will take their place. There is some truth in that, but there is also a ceiling. To quote the German proverb: Trees don’t grow to the sky. Two or three growers admitted they resented hiking up prices but felt they had no choice; competitors’ price escalation creates a perception of inferiority in lower-priced wines, unfairly casting them in a negative light. That’s the problem when wine becomes a Veblen good. On more than one occasion, I sat in a Beaune restaurant and watched customers ignore the raft of superb, well-priced wines and go directly to the “rare” section to overspend on a cult name. I also witnessed the disappointment that can ensue.
Other producers told me that they could not entertain price reductions because it would be perceived as a backward step or an admission that they had mispriced previous vintages. This is tantamount to discarding an economic lever whereby producers can control the market and maintain a steady flow through the distribution system to the consumer. Look at the consequences for Bordeaux. Burgundy might have convinced itself that it is immune to a similar fate. After all, quantities in Burgundy are far smaller, so it takes a much smaller uptick in demand or (as it might transpire) downturn in supply to lock prices at a higher level. Even so, that does not imply Burgundy will avoid long-term consequences, not to mention stoking accusations of avarice.
