This article is also published by the Financial Times.
Roland Lavantureux runs a small domaine in Chablis, not just growing his family's Chardonnay grapes, but bottling their produce. He recently worked out that it would almost make financial sense for him to pull the cork on every bottle sitting in his cellars and sell their contents in bulk to one of the army of small négociants [people who produce wine from bought-in grapes and wine] that has mushroomed in Burgundy, so crazily high are bulk-wine prices currently in the world's favourite fine-wine region.
Burgundy, particularly its heartland the Côte d'Or, has reached a crossroads in its evolution. Since the Middle Ages when viticulture was in the hands of the monasteries, it has produced small quantities of wine from tiny parcels of vines, painstakingly cultivated personally by their owners. The increasing number of wine tourists in Burgundy has come to revere the timeless stone villages and their horny-handed vignerons who know every vine and every importer personally. The contrast with the much more hard-headed scale of production in Bordeaux is stark. Bordeaux's extensive estates are increasingly owned by banks and insurance companies, are run by smooth executives, and have their produce pass through so many middlemen that wines with the best-known names have been transformed from drinks into investment vehicles. Bordeaux prices have soared to such an extent that, for the moment anyway, fine-wine buyers seem to have lost interest in buying futures in them – which has led to a dramatic reduction in the amount of money to be made trading them.
Meanwhile the Asian markets that have until recently been growing so markedly, tiring of a Bordeaux-only diet, have pounced on Burgundy with its much more elastic pricing. Add to this three short crops in a row – in 2011, 2012 and 2013 – and you have a very small honeypot surrounded by an increasingly large and excited swarm of bees.
British wine merchant Roy Richards of Richards Walford, who moved from England to live in Beaune in 2007, is gloomy. 'In 50 years' time I can't see that we'll have a community of vignerons. Burgundy too will have evolved into a wine region where it is those with large fortunes who can afford to have bought the land, and they'll employ farm workers who would previously have been vignerons. The notion of a paysan [a proud, skilled smallholder] is past.' Earlier this year LVMH snapped up the Clos des Lambrays estate in Morey-St-Denis. AXA have long owned Domaine de l'Arlot down the road. When in 2005 Philippe Engel of Vosne-Romanée, the most blessed village of the Côte d'Or, died at 49, the vineyards of his family's Domaine René Engel were acquired by François Pinault, who has created Domaine d'Eugénie from them. Much more recently the Château de Pommard was sold to a Silicon Valley entrepreneur, the Château de Gevrey to an Asian investor, and Domaine Bernard Maume went to an Ontario banker.
Pierre Gouges and Jason Haynes unloading Côte de Nuits Chardonnay at Domaine Henri Gouges in Nuits-St-Georges during the 2014 harvest. Image © Jon Wyand.
Land in Burgundy is no longer affordable for Burgundians. The few tiny slices of desirable grand cru vineyards that have changed hands this century have almost invariably been financed by outside investors. Thanks to the French inheritance system, those in family hands (still by far the majority) are usually owned by a clutch of siblings, of which only one manages the domaine. It is hugely tempting for many of them to cash in – not least because death duties have such a crippling effect on family finances, whereas corporations are treated much more gently by the French taxman. It sounds to me as though there is a huge opportunity for financial advisors on the Côte d'Or. Wouldn't it make sense to create family-owned companies to run these domaines? Richards snorted. 'Of course it would be sensible, but there's so much suspicion in France – often distrust within families – that it rarely happens.'
Many of those who produce burgundy with an eye to the future are investing in cheaper land to the south such as in the Mâconnais or Beaujolais. Domaines Leflaive and Lafon have been making fine white Mâcon for years now. Louis Jadot, Louis Latour, Bouchard Père et Fils and Thibault Liger-Belair, all of whom bought land in Beaujolais, have recently been joined by Lafarge of Volnay and Louis Boillot of Chambolle-Musigny.
Importers of burgundy are also having to adopt new strategies in response to increased worldwide demand for the wines, dramatically increased prices for the top wines (inflated by the fact that Asian importers who once bought through British merchants are now seeking to buy direct), and that small matter of three small harvests.
Burgundy specialist Jason Haynes of Flint Wines has taken the precaution of marrying a burgundian, Aurelia Gouges of Domaine Henri Gouges of Nuits-St-Georges. He admits that they have had to look for new suppliers quite 'aggressively' because of the lack of supply. He goes to the trade tastings organised annually on the Côte d'Or and reports, 'it's amazing how much bad wine there still is, even carrying such glamorous appellations as Vosne-Romanée – overoaked or unbalanced'. He is sad about the geo-genetic lottery that sees some of the best young winemakers in appellations such as Maranges and Marsannay whose wines will never attract the same prices as those of the Côte d'Or's most respected villages.
Importers find new suppliers by circuitous routes. Simon Davies of A&B Vintners came across Domaine François Feuillet because Feuillet is the father-in-law of someone he met at a client dinner in the UK, but the more usual route is a recommendation from another grower, or a sommelier in a local restaurant. Bertrand Bachelet in Dezize-lès-Maranges was introduced to Jason Haynes of Flint by his brother-in-law, with whom he studied at wine school. And there are still young winemakers setting out to make wine from grapes that were previously sold to large négociants, such as Armand Heitz, who has just started up Domaine Heitz Lochardet in Chassagne-Montrachet, whereas his parents used to sell the family's grapes to Joseph Drouhin.
Fortunately the 2014 harvest looks to be back to normal quantities, despite the terrible onslaught of hail in the Côte de Beaune in June, and 2013 prices are expected to be about the same as or less than those asked for the 2012s – except perhaps for the négociants who have paid so much for their 2013s.
SOME GOOD BURGUNDY BUYS
We will be publishing tasting notes on these wines in one of our autumn regional assortments.
WHITES
JM Brocard, The Society's 2012 Chablis
£11.50 The Wine Society
Chavy Chouet, Fermelottes 2012 Bourgogne Blanc
£14.95 Roberson
Sylvain Dussort, Cuvée des Ormes 2012 Bourgogne Blanc
£16.65 The Sampler
REDS
Catherine and Claude Maréchal, Cuvée Gravel 2012 Bourgogne Rouge
£18 The Sampler
Petitot, Les Poisets 2012 Nuits-St-Georges
£27.95 Roberson
Vaudoisey 2011 Volnay
£27.95 Roberson, £19.96 A&B Vintners
Article image: Bertrand Bachelet in his white wine cellar at Dezize-lès-Maranges with barrels of his flagship Maranges Les Fussières. Image © Jon Wyand, whose new book of photography Une année en Corton is published on 5 November.