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What Should We Be Doing Now?
BY ANTONIO GALLONI | JUNE 03, 2020
As the world grapples with several major crises, the outlook for the future has never been less certain. Things change from day to day, often unpredictably. Beyond what is obvious from reading headlines full of stories on the COVID-19 pandemic, major economic duress and racism, it is clear the current situation is causing levels of stress and anxiety that are hard to quantify, but that are clearly exerting a heavy toll. “I have real misgivings about promoting my wines right now given what is going on in the world” numerous industry professionals have told me. “Is wine really all that essential?” others have asked. Well, these are my thoughts…
Is Wine Essential?
COVID-19 has caused enormous physical suffering, illness and loss of life all over the world, not to mention the untold effects on mental health, the full extent of which we will only understand in time. Numerous sectors, most notably hospitality, have been ravaged. In the United States, unemployment is currently 15%, the highest it has been since the Great Depression. That number will almost certainly rise when June figures are released shortly. The only reason unemployment is not higher is because a massive amount of stimulus estimated to be more than $3 trillion has been pumped into the economy. Many companies have received PPP (Paycheck Protection Program) grants that become forgivable under certain conditions, one of which is not reducing headcount for six months. What happens after six months? No one knows for sure, but airlines are among the companies that have already announced major schedule and workforce reductions for this coming fall.
So, is wine essential? I suppose that can be debated. But one thing I am certain of is that the jobs the wine industry supports are 100% essential. Many of these are working class jobs. Think of every vineyard worker, every person who answers email and phone calls, every salesperson and everyone who works behind the scenes in warehouses packing and delivering wines. Those jobs are absolutely essential.
Because so many people are out of work, it is incumbent on all of us who are employed to do everything we can to help grow the global economy. I believe it is possible to pursue commercial interests while remaining sensitive and keenly aware of the moment in which we are living. It is a time to focus more on long-term relationships and less on transactional business. That’s probably a good lesson for the future, once we are past the worst of what we are dealing with now.
The Global Scourge of Racism
I wrote most of this article before the senseless death of George Floyd, captured on video for all to see, caused simmering tensions to finally boil over. The United States has had a very troubled past on race relations for hundreds of years. Hopefully Floyd’s death is a turning point that leads to meaningful change. It would be a mistake, however, to think that racism is limited to the United States. One need only look at the world of sport to see equally troubling issues. In 1996, French politician Jean-Marie Le Pen famously criticized the French men’s national football team for the number of what he called “foreigners,” players of multi-ethnic backgrounds, many of them French-born citizens. The 1998 team of course went on to win the World Cup, capturing France’s first major tournament victory and the hearts of many fans around the world. More recent events in Italy, Germany and England are proof that underlying racial tensions remain.
Now, for 2019 Bordeaux
Much has been written about Bordeaux's 2019 en primeur campaign. Should it happen, should it not happen? What should prices be? Can samples really be shipped across the ocean to critics? Is it fair to sell wines that have not been widely tasted?
Let me start with the first question. In my view, en primeur should absolutely happen, so I am not at all surprised to see that it has. As I wrote above, it is essential for the health of the global economy that we capture every bit of growth that is possible right now because plenty will not be possible in 2020, 2021 and perhaps beyond. Jobs depend on it. So does morale and mental well-being. We can’t stay locked up forever. People need to be engaged with their work and with other people. Now is the right time to offer these wines. Some had suggested waiting until fall, but by then it is harvest, and there is no guarantee the global outlook will be any clearer than it is now. I don’t personally take any offense to wines being released before many people have had a chance to taste them. Every château should be free to do as they wish, just as the trade and consumers should buy the wines if it makes sense, and feel zero regret or emotional sentiment on passing when it doesn't.
What about the quality of the samples? I have been positively surprised, to be honest. In the best cases, samples were prepared on a Monday morning, shipped that day and in my house in New York two days later. That’s almost as good as being in Bordeaux. Some wines took longer to arrive, but a baseline for what is possible clearly exists. Moreover, tasting barrel samples at home allows for something that is impossible in Bordeaux, and that is the ability to follow a wine over time, which should lead to better and more comprehensive notes. Lastly, the only way to have an opinion on the freshness of samples shipped across the ocean is to actually taste them.
The Opportunity of a Lifetime
Early reports of the 2019s have been quite positive. Is it the Vintage of a Lifetime, or the Vintage of the Century? Well, we will need a few decades to answer that. But I am certain of one thing, and that is that 2019 is the Opportunity of a Lifetime for château proprietors. Bordeaux owners often complain that they don’t know their end customer. Offering the 2019s at prices that embrace the consumer is an easy way to start engaging the end customer and rebuilding some of the trust that has been eroded over years of aggressively pricing en primeur releases.
For readers who might be new to Bordeaux, during the en primeur (futures) campaign, merchants offer the new vintage, in this case 2019. Consumers pay today for a wine they will receive in about two years' time. Implicit in this arrangement is that consumers are compensated for the risks associated with paying for wine in advance through discounted prices. In the past, Bordeaux owners received inexpensive funding, merchants made a margin and consumers got early access to wines, the best of which often appreciated. That all worked fine until château owners decided to suck all of those margins out of the system by raising prices to the point that merchants now work on very tight margins and consumers often see virtually no reward for taking the risk of buying en primeur. At the same time, the growth of the auction market provides consumers many more options for buying wines that are both physically available and ready to drink now, while improvements in quality in other regions give consumers a far wider array of choices than in the past, all of which has eroded Bordeaux's once-unassailable market dominance in the fine wine market.
Getting back to en primeur, the wines have to be priced right, which means for the moment in time we are in, irrespective of the perceived quality of the wines themselves. Price is always a hard conversation. It is, frankly, the subject in wine I enjoy writing about the least. The world is extremely uncertain right now. US buyers have to factor in 25% tariffs for all wines under 14%. Perhaps the tariffs will be repealed, but until they are, it is extremely dangerous to assume they don’t exist. Buying from reputable, established merchants who are not likely to go out of business is essential. The reality is that climate change and technology have had a profound effect on quality and consistency such that good-to-great vintages are no longer the exception, but rather the norm. My former boss liked to say that there is always another great vintage in the future. That has never been more true than it is today. Stated simply, for the consumer buying Bordeaux en primeur involves considerable risks. Those risks have also never been higher than they are now.
One Last Thing…
There is one more thing I would like to see from Bordeaux in 2019, and that is a major charitable initiative around COVID-19. Perhaps it is an auction of large format 2019s, or an event, when gatherings become possible again. But something major. If there is a role for Vinous to play, I will offer my time and my team’s time to make it happen. I was delighted to see that Michel Reybier took my advice and added a charitable component to his Cos d’Estournel release, but frankly more than a Euro per bottle is needed.
The world’s issues are going to be with us for quite a while. It is not always easy to know what to do. That said, I am 100% sure that this is not a time to be paralyzed or to stand still, but rather it is a time to move forward with conviction, focus and a greater sense of purpose, in every part of our lives.