In the Bordeaux wine industry, we often mention the “Place of Bordeaux” (AKA “La Place”). System more than a physical location, The “place of Bordeaux” is where châteaux, brokers and merchants meet to put the Bordeaux Grands Crus on the market. The Primeurs are the lifeblood of this unique system.
Most of the trading operations related to the Bordeaux Grands Crus are undertaken through the “Place of Bordeaux” .
This system is unique because the Bordeaux châteaux do not sell their wines directly to individuals. The Bordeaux Grands Crus owners do not sell via the different distribution channels either. The Great Bordeaux wines are sold to wine merchants. Those merchants are then in charge of ensuring the Bordeaux wines distribution worldwide. On the place of Bordeaux, brokers put traders in relation with Châteaux.
The Primeurs Wines
On the Place of Bordeaux, Grands Crus are sold “en Primeur“.
The “en Primeur” sales begin with the traditional “en Primeur” week that takes place in Bordeaux at the beginning of April.
A Bordeaux “en Primeur” wine is a wine which is still being aged in cask and not yet bottled . Thus, during the Primeurs week which will take place this year between April the 4th and April the 7th, professionals will taste the 2015 vintage. At the end of the “en primeur” week, the “en primeur” grands crus prices will be determined.
When they buy en Primeur, the wine merchants buy the Bordeaux wines in advance. However, to buy en Primeur wines, merchants must have access to en Primeur allowances.
Those allowances are granted by the Châteaux. They are the only ones to decide who they will grant allowances to. This means that a merchant may obtain Châteaux Smith Haut Laffite en Primeurs allowances
but no Haut-Brion. The role of the broker, who puts in relation merchants and Châteaux, is in that case primordial.
The advantages of the Place of Bordeaux.
Both Châteaux and merchants benefit from the en primeurs system:
- The Châteaux can sell their production before the wine are bottled;
- The Châteaux do not have to worry about selling their wines;
- Merchants buy wines at competitive prices (at their first selling prices);
- Merchants will recover better margins when they will resell the en Primeur wines to end-users.
The limits of the Place of Bordeaux.
On the Place of Bordeaux, supply and demand is the rule. “La Place” is therefore subject to important fluctuations. To boot, the Place of Bordeaux focuses almost exclusively on major brands. The Grands Crus which have the greatest worldwide notoriety and which can provide great returns quickly.
In addition, the allowances given by the châteaux are not negotiable nor downward or upward. the merchants
must strongly monitor their cashflow to maintain their en Primeur allowances. Finally, it is interesting to note that only a couple of dozens of merchants represent 80 % of the Bordeaux wines sales.
The place of Bordeaux is a unique system that ensures the sales of the Bordeaux Grands Crus.
The number of merchants having access to the Place of Bordeaux is limited and they can be considered as privileged. But, thanks to the En primeur system, the Place of Bordeaux is the warrant of the worlwide reputation of the Bordeaux Grands Crus..