Leaked Parker Points and Rising Prices

Ever since the legendary 1982 vintage, wine critic Robert Parker has made and driven the market for Bordeaux. Yet the recent leaking of Parker's latest scores for the 2005 vintage in Bordeaux, before his online subscribers had access to them, has brought into clear focus just what today's Bordeaux market has become: an efficient, world-wide commodities market, where cut-throat traders seek to exploit asymmetrical information, target mispriced offerings, and utilize all the technological advantages at their disposal.

The particular mechanisms of this market recently came to the forefront with the latest release of Parker's Wine Advocate. Parker offers a print and online version of his newsletter, and in an attempt at fairness to his traditional print-based audience, mails out his latest issue from Maryland two to three days before the reviews are posted online. Needless to say, this situation creates rampant arbitrage opportunities.

Bordeaux, of course, has long been bought and sold as a commodity, thanks to its historic pedigree, worldwide demand, and, most crucially, a large volume of production whose wines carry with them a nearly universally accepted numerical Parker score. This is a unique market situation in today's wine world that, thankfully, has not yet taken hold in other regions.

The latest issue had Parker's first reviews of 2006 Bordeaux (not yet on the market) as well as his second reviews of 2005 Bordeaux, which Parker has hailed as "an extraordinary vintage and one that is different from anything I have tasted in the last twenty-eight years." On the morning of May 2, a day before the reviews were set to be posted online, retailers worldwide were publicizing Parker's 2006 ratings -- probably obtained from a local print subscriber who makes a tidy sum faxing and PDF-ing the latest issue worldwide. The 2006 scores had no real financial value and so were freely disseminated, but the 2005 scores, which presumably these retailers also obtained, were guarded like state secrets.

This situation caused a panic on the Squires Bulletin Board, with rampant speculation about which wines were most likely to receive an "upgrade" from their initial score last April and posters hyperventilating about retailers who were set to gouge consumers with this asymmetrical information. There were even reports of "runs" on particular wines at various stores, like Premier Cru, on the barest hint of a rumor of an upgrade. While some print subscribers who had already received copies may have been able to secure some of the "upgraded" wines at their previous prices, the "leaked" 2005 scores primarily served the interests of those in the trade, for their own pricing and trading purposes, to the detriment of the consumer.

To take one example, the 2005 Pavie Macquin received one of the most significant upgrades from Parker, from 94-96 points to 96-100 points. This was a wine widely available for $99.95, or less, on and before May 2 but was now unobtainable at that price, even before the scores were posted online. It now sells for around $200.00. And this is far from the only case, as given Parker's overwhelmingly positive initial appraisal of the vintage now confirmed, prices have only gone up on the most coveted (i.e., highly rated) wines.

This is a perverse market situation -- enabled by the dominance of one single critic and the asymmetrical dissemination of information -- in which Robert Parker's paid subscribers -- of which I am one -- essentially subsidize those in the trade, to their own financial detriment.

While these market trends have been with us for a while now, the 2005 vintage in France has created a perfect storm, where "vintage of the century" reviews and ratings, increased worldwide demand, and a weakened dollar, have all combined to price out many ordinary consumers from wines they have annually bought, cellared, and enjoyed.

This is an unfortunate situation, but the reality of today's wine world is so driven and defined by reviews, points, and stratospheric prices that consumers can only ignore these issues at their own peril.