Fair Warning: Burgundy 2022 - The Market

BY NEAL MARTIN | JANUARY 17, 2024

“I cannot help thinking that Burgundy, or specifically the Côte d’Or, is analogous to a passenger in a sports car in which the accelerator has become stuck, and there is no means of slowing down. Everything hurtles past faster and faster. Everything is sped up.” – Burgundy 2021: The Market.

Written almost a year ago to the day, how is that analogy playing out? Well, we are still strapped into that sports car. However, there’s a perturbing rattle in the engine, and it’s lost some of its acceleration. That’s not necessarily a bad thing. Hurtling along at such speed is scary. Still, you cannot get out and fix the car because the accelerator pedal doesn’t work. Of equal concern is the lack of road signs to indicate where you are heading… 

Who knows where you’ll be in another 12 months?

One of a dozen or so merchant tastings for the 2022 Burgundy vintage that have been held across London each January for around the last 30-odd years. This was the first year, post-pandemic, that Burgundy winemakers flew out to pour the wines en masse. Readers can expect additional reviews for mainly bottled wines to be added to the main report in the near future.

It has been well-documented that the heat has come out of the hitherto frenzied Burgundy fine wine market. That was inevitable. Wines reached a critical point where prices have lost upward momentum and financial returns can no longer be guaranteed for those who waded into Burgundy incentivized by financial gains. Softening began around last spring. Merchants tipping me off that even blue chips, accustomed to being snapped up in the blink of an eye, were twiddling their fingers waiting for homes. 

A correction is unfolding, though merchants resist slapping discounts on existing stock, lest they instantaneously write down the value of their assets by 30% to 40%. That gives you some idea of the scale of unreported discounting. Therein lies part of the problem with respect to the forthcoming 2022 vintage. Some winemakers, but especially landowners that sell fruit, short-sightedly base selling prices upon what they see listed by the trade, whereas they ought to be using prices consumers are willing to fork out. Of course, that’s more opaque. Selling prices are dampened by a perfect storm of extraneous economic factors: the knock-on effects of a stuttering Chinese economy, relatively high-interest rates, geopolitical instability, conflict and pessimism about the future.

Recently, I read an exchange on social media between a respected Burgundy winemaker and a European importer. The former was applauding his strong showing in a blind tasting that he attributed to efforts in the vineyard husbandry. No doubt to that winemaker’s chagrin, an importer shot back, advising that self-congratulation was moot since it was impossible to sell that wine at their asking price. It was a microcosm of the standoff between two valid economic viewpoints that can stymie this once fluid market.

Too many wine producers, not only in Burgundy, I might add, but across many regions, aim portfolios towards a wealthy niche that sees wine as an aspirational product, one that is totemic of success, instead of prosaically, a beverage that tastes nice. The result is that too many courts have the same minuscule percentage of society. There’s not enough of them, certainly not enough willing to accept wallet-busting price hikes even for feted cuvées. This is especially true at the lower end of the hierarchy. There’s a huge difference between a purported ‘best’ Bâtard-Montrachet and the ‘best’ Bourgogne Aligoté, even if, in reality, differences in quality are a fraction connoted by their price tag. Whereas 20 years ago, prices were mostly driven by perceived quality, speculation distorts demand so that when potential profit evaporates, demand can blow away in the lightest breeze.

Underlying unease is found in the quantities of 2022 and in particular, the forthcoming 2023s. Demand was turbocharged by scarcity and consumer regret of missing out. As I wrote before, some winemakers actively poured gas on the fire via egregious price hikes. Just as many observed such frenzy with disdain, not least those that capped increases at their own pecuniary loss, hoping to maintain their loyal customer base.