Some Second Wines Raised Prices Following Carruades de Lafite

Write | WBO Team

Translate and Edit | WBO Kiwi 

Many second wines of First Growth in Grand Cru Classe En 1855 keep rising steadily. To dig out the reasons behind, WBO interviewed a number of fine wine importers and distributors.

Second wines on the rise

“Many second wines of famous brands rose sharply in these days, of which Pavillon Rouge du Chateau Margaux gains the most, followed by Les Forts De Latour, Le Petit Moutonlooks slightly better in price, but still on the rise.” One distributor told WBO last week in a tasting event.

Wu Xianghua, CEO of Fine West, has confirmed it in the interview.

“Price increases are not just reflected in China market. These wines are rising from upstream too, then distributors have to follow up.” 

According to Wu, price rise started from September. Pavillon Rouge du Chateau Margaux, Les Forts De Latour, Le Petit Mouton raised in the range of 8%-10%, which increase annually.

Lin Jian, General Manager of Shanghai OLIVIER Wines, said, “These mentioned second wines are indeed on the rise. They have increased by 10%-20% in the upper channels for each vintage. Carruades de Lafite keeps rising. ”

The currently imported prices for Pavillon Rouge du Chateau Margaux, Les Forts De Latour, Le Petit Mouton and Carruades de Lafite are CNY1400-1500(€178-191), CNY1500-1800(€191-229), CNY1300-1500(€165-191) and CNY2000(€254) respectively.

Carruades de Lafite effect drives the upward trend

A vintner pointed out, prices of the other three brands are encouraged by Carruades de Lafite, which became hot from the beginning of last year.

At present, price of Carruades de Lafite is higher than the other three by 20%-25%, Wu disclosed.

Whilst other vintners revealed, now mainland consumer’s understanding about wine gets more and more comprehensive, Carruades de Lafite is no longer their only choice, they have other good choices from equivalent First Growth. Once they find price rise in Carruades de Lafite, they will judge the supply and demand relationship or hug other second wines.

Raising prices in September is a common phenomenon

Wu analyzed two important points for the price rise.

Firstly, every year in September there is a round of price increases. Bordeaux negociants began to adjust price after summer holidays, the same as many international clothing brands.

Secondly, producing volume of many wineries was reduced by natural disasters in 2017, which led to an upward trend in prices, although some may not be affected.

Why price adjustment happened in September?

This round of price increase has something to do with En Primeur price rise in May, because when new vintages put into market, it looks very expensive comparing to old vintages.

Then they have to adjust old vintage price to the same level with new ones, so as not to make people feel very expensive.

Showing “Long Bull” run trend

Price of First Growth has kept stably for years, it’s reasonable to rise at the present stage. The rise has actually started since last year, but it's not as sharp as last round.

Impulse consumption happens less often than before. But Lin personally predicted that this wave will be higher than the past one.

Will consumers accept the price increase?

“Like Chinese liquor Mao tai and Wu liangye, First Growth is impossible to be replaced by other brands.” Wu added, “People will firstly buy domestic inventory that didn’t raise price. As long as the increase is reasonable for new vintage, they are willing to accept the new price after they finish all wines in stock.”