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April 24, 2017

Bordeaux 2016 En Primeur Report

EP.2016

We have just returned from Bordeaux and tasting the 2016 vintage. Early reports from Bordeaux and the critics suggest that this is a special vintage, it is. There are stunning wines through the leading villages, modern classics and a real buzz, with a huge inflow of buyers filling the rafters of the leading Grand Vin Chateaux.

Vintage Conditions

The 2016 was a vintage of two extremes, a wet first half and an incredibly dry second, this defined its potential and helped mark a promise of greatness. Following a dry end to 2015, the 2016 vintage started with an abundance of rain in January through March. This increased water reserves, more than 400mm during the first three months of the year with a record 240mm in January. The winter was particularly damp and mild providing the vines with months of active growth. The absence of cold weather resulted in an extremely early bud break. The rain continued through the spring, as did the unseasonably low temperatures. Flowering began in late May and by late June 80% of the years rainfall had already fallen. Then nature reshuffled the deck.

July will be remembered as extremely dry with no rain whatsoever. At the height of the summer there was 26% more sunshine than on average and 2016 was the driest summer since 1893. Yet the vines did not experience much water stress, despite drought conditions, as they drove downward to the water table brimming from the winter and spring rains. Equally important were the diurnal temperature changes, which were often as high as 20°. The cool nights allowed for fresh fruit flavours to persist, while helping the synthesis of anthocyanins. Light showers arrived at the end of July and the first days of August, and veraison (colour change) was wonderfully even, just as the flowering had been. Rainfall in September further helped the ripening process. High temperatures at the end of August and September allowed for slow ripening and outstanding maturity. Consequently, there were ample grapes, with small berries leading to wonderful concentration.

The Merlot harvest started on the 26th September at most Estates, continuing with perfect conditions to mid-October. This meant the grapes could reach perfect ripeness. The dry white wines were harvested in September in fine weather. The reds saw Merlot harvested mostly between the final week of September to the first week of October. Cabernet Sauvignon largely began in the first week of October running through to mid-October. The outcome was a late vintage, resulting in extremely healthy grapes, picked without duress at the leisure of the winemaker. The Merlot grapes were a good size, while the Cabernet Sauvignon were very small and incredibly concentrated. Yields were very generous indeed, the largest harvest since 2006 and the highest yield since 2004.

Style, Regions and the Winners

These special and unusual vintage conditions facilitated a wonderful year, which James Suckling proclaims ‘as an exceptional vintage equal to the exquisite 2015.’ We have heard many compare it to the 2010 vintage, but in reality the weather conditions and the absence of Robert Parker have meant it is a continuation of the French regression to a more traditional style. Winemakers made the wines they like in 2016 and many declared this as their finest ever vintage. James Suckling said that he ‘would rate it ahead of 2000 and 2003, as well as every vintage in the 1990s except 1990 itself. The only vintages better are 2005, 2009, 2010 and perhaps 2015.’

The incredible heat and long relaxed harvesting conditions, with the odd well-timed shower, meant that Cabernet Sauvignon dominant producers were the true winners in 2016. St Emilion and Pomerol have a very strong showing this year, with the Merlot grape certainly performing. Here the Merlot fills the palate with ample, supple and polished tannins, underlined with good acidity and a velvety mouthfeel. The wines contained a lot of complexity, showing dark and red fruit, red flowers, chocolate, hung meat, licorice and plenty of freshness and energy.

Pessac Leognan and Margaux also performed brilliantly, however, these stole the show in 2015 so in general 2015 edges 2016 very slightly in these appellations. Palmer, Chateau Margaux, Malescot St Exupéry and Rauzan Segla are remarkable wines. They are perfumed, with plenty of violet and rose in Margaux, and cedar, lead and cut flowers in Pessac. These are combined with precise dark fruits and sweet spices, a ubiquitous profile apparent throughout the left banks wines. In Pessac, Haut Brion as always is stunning as are Pape Clement, Smith Haut Lafite and Haut Bailly. No doubt the latter three are likely to be some of the best priced wines of the campaign.

However, there is no doubt it is a left bank vintage, with St.Julien, Pauillac and St. Estephe producing some modern day classics. The wines once again provide a torrent of pepper, nutmeg, cloves and cinnamon. This balances with lead pencil, cedar, toast, smoke and lots of dark and white chocolate, mocha, crushed coffee and meat. The mouthfeel is impressive throughout and the consistency through these leading three villages is outstanding. The wines are structured, precise with an abundance of torque and tension. Leoville las Cases, Pontet Canet and Lynch Bages are special, while Lafite and Mouton Rothschild are the best in years. Montrose tops 2015, as does Cos d’Estournel, while Calon Segur could be their finest modern day vintage. Like Margaux and Pessac last year, St.Julien and in particular Pauillac and St. Estephe are the villages to focus on at the heady heights of £100 a bottle and above, but also at £20 – £50 and £50 – £100. If you love claret, fill your boots here, the long elegant yet powerful finishes go on and on.

Thematically 2016 is about ripe, rich and round tannin, freshness, focus, density and intense spice aromas, floral notes combined with complexity, balance and harmony. Alcohol is lower throughout, many leading wines below 14%. Acidity is higher, rewarding with freshness and brightness while pH ranges from 3.3 to 3.8. This is neoclassic claret!

The white wines throughout are good, but by no means great. They lend themselves to tropical flavours such as peach, melon and even notes of elderflower. They would be delicious to drink over the next 10 years, but are not for the ages. 2014 and 2015 best 2016 when it comes to white Bordeaux. The sweet wines of Sauternes are also appealing, but once again, fall towards over ripeness. They have botrytis characters, yet do not reach the heights of the truly great Sauternes vintages. The prices however may get carried along in lock-step with the reds, which would make them much less appealing.

Pricing and Investment

The turbulent economic and political climate experienced in the 12 months since the 2015 Bordeaux En Primeur campaign has resulted in a GBP/EUR devaluation of 16.38%. This coupled with the positive reception that the 2016 vintage is receiving from the critics could result in a two-fold increase on release prices this year.

Chateau Release Price Current Price (GBP) % Change
Haut Brion £4,150 £4,550 9.64%
Lafite £4,390 £5,000 13.90%
Marguax £4,400 £6,050 37.50%
Mouton £4,150 £4,600 10.84%
Las Cases £1,450 £1,590 9.66%
Angelus £2,650 £2,950 11.32%
Palmer £2,160 £2,400 11.11%
Avg 1st Growth £4,272.50 £5,050.00 18.20%

 

We have spent the week tasting the wines and discussing pricing. What we can now expect based on those conversations is a varying degree of price increase in Euro terms. Some Estates have affirmed they will not look at a large price release, but a gentle lift. Any that release 5% above last year will be met very well. However, we would not be surprised to see a 15-20% Euro increase by some. A price rise between 5% to 20% on 2015 would translate to an average sterling increase of £618 at 5%, £851 at 10%, £1,084 at 15% and £1,317 at 20% per 12 bottles of First Growth. However, since their release, 2015 First Growths have performed well in the market and are now trading at an average of 18.20% above their release prices. The real implications for various changes in release price are demonstrated below, particularly among the highly allocated wines, which as always will provide excellent appreciation potential.

Chateau Release Price Todays GBP 5% Todays GBP 10% Todays GBP 15% Todays
GBP 20%
Haut Brion £4,150 £4,751 £4,977 £5,203 £5,429
Lafite £4,390 £5,025 £5,265 £5,504 £5,743
Margaux £4,400 £5,037 £5,277 £5,517 £5,756
Mouton £4,150 £4,751 £4,977 £5,203 £5,429
Las Cases £1,450 £1,660 £1,739 £1,818 £1,897
Angelus £2,650 £3,034 £3,178 £3,323 £3,467
Palmer £2,160 £2,473 £2,590 £2,708 £2,826

 

In the coming 12 months, it is unlikely sterling will plateau. The unfolding Brexit negotiations, the unpredictable nature of President Trump and the building populist movement across Europe are all likely to cause fluctuations in FX rates. If the Chateaux can resist the temptation to release the 2016 vintage without an exorbitant price increase, then both short and long term appreciations should be felt throughout the releases.

Chateau Current IG Current IG
Price (GBP) Release Price EUR Release EUR
Haut Brion £4,550 £4,150 € 5,314 € 5,287
Lafite £5,000 £4,390 € 5,840 € 5,593
Marguax £6,050 £4,400 € 7,066 € 5,606
Mouton £4,600 £4,150 € 5,372 € 5,287
Las Cases £1,590 £1,450 € 1,857 € 1,847
Angelus £2,950 £2,650 € 3,445 € 3,376
Palmer £2,400 £2,160 € 2,803 € 2,752

 

As always we will provide all the pricing analyses on release and make recommendations based on quality and price. Our conclusion is that it is a tremendous vintage, although a continuation of the shifting style paradigm towards classic elegance and away from the over extraction that characterised many of the vintages in the noughties. The vintage is homogenous, more so than 2015 which is usurped in the hallowed villages of St. Julien, Pauillac and St. Estephe. The vintage is one to own, the final instalment on the upward trend from 2014, 2015 and 2016, three wonderfully coupled years. What is left to judge is the price, which will define the vintage as much as its qualitative brilliance. As always many wines will be heavily oversubscribed, but again this is also a vintage which should be used to fill gaps in the cellar at the value end, where we expect little or no Euro price increase. The Wine Advocate will release its scores at the end of the month and the campaign will fire up within the next 21 days…. c’est bonc’est bon!