EP. 11: Who Is Bordeaux Pricing For?

Yeah, but this harmony kind of broke down recently, right? Because it feels as though you talk about this speculation, and I'm not disagreeing that there was a lot of speculation in the market, especially after COVID, right? We went through a period of easy money, low interest rates, and a lot of people parked money into alternative assets such as wine.

But in the past two, three years, the market has been clear.

It's been a cooling market.

And this harmony perhaps went a little bit out of balance.

But I feel like this prestige premium has been too big for...

I see.

for the economic environment, right? Because earlier you said that one should consider the economic climate.

At the moment, this prestige premium is too high.

It's too high in terms of volume, in terms of quality.

The prestige premium meaning the margin that one adds to the price of the wine, right? If the secondary market trades well below what the Chateau released the wine at, how can that be justifiable?

You know, Sarah, one thing is very important that we speak about that last time and I compare for the burgundy system.

If the demand exceeds supply, it's work.

But today, I think because from economic reasons, the demand is too small that the market produces.

And if you don't want to, if you cannot arrive to reduce the volume of all the produce, it stays the same program.

If you put too much on the market, a luxury product or a small product or an iconic product, you have too much on the market, it's too much.

But I think it's everywhere around the world.

I think the Napa Valley wine has some difficulty too today.

I don't know for the iconic Italian wine, the Super Tosca, But the problem is the same.

If the demand exceeds the supplier, it works.

That's it.

And today, Bordeaux has a big problem about that, I think.

And in fact, when we last spoke, you mentioned that part of the problem could be that water has a large production volume, especially when we compare it to the likes of Burgundy.

And how would you say that affects the price and the solution to that oversupply?

Since the end of the 90s, we have this problem.

We have a big production and the people say it's a fantastic country.