Robert Parker has bluntly reaffirmed his pessimistic view of the U.S. market for 2006 Bordeaux, saying, "I would not spend a dollar on '06 futures."
These remarks, made at the Duquesne Club in Pittsburgh two weeks ago, come on the heels of his prediction earlier this month that "the 'futures' market in the USA will be largely a failure." (A self-fulfilling prophecy, perhaps?)
A weak dollar, combined with large expenditures on the outstanding '05 vintage and the availability of strong buys among the '03 Northern Medocs, all lead Parker to advise against any spending in the '06 en primeur campaign.
Curiously, Parker's latest column for Business Week offers his picks on "Where To Place Your 2006 Bordeaux Bets." He is less blunt for the "Executive Life" crowd than he was at the Duquesne Club, advising, "I wouldn't load up on 2006 futures, as the vintage is good but not great."
Nevertheless, Parker offers up his recommendations for futures worth a gamble if priced below $45: Branaire-Ducru, Malescot St.-Exupéry, Haut-Bailly, Duhart-Milon, Fleur Cardinale, Monbousquet, Smith-Haut-Lafitte and Clos de L'Oratoire.
Anyone care to bet on how many of these wines come in under that price point? (My prediction is three: Duhart-Milon, Fleur Cardinale and Clos de L'Oratoire.)
Monday, May 28, 2007
Parker: "I would not spend a dollar on '06 Futures"
Tuesday, May 15, 2007
Scoring Metastasis
Reader ScottS comments that the main problem with Parker and his points is that he's too powerful. He argues that a larger pool of reviewers, each with less power, would lessen the unfortunate market effects of Parker dominance and provide consumers with a more valuable metric for choosing wines.
I think the first is definitely correct. Scoring would be more ambiguous and would develop over time rather than appearing full-formed the day each issue of the Wine Advocate comes out. The crass market responses wouldn't be nearly so overt, and the overall market-driving power of the scores would be reduced because no one score or even compilation of scores would have the authority Parker currently does.
On the other hand, I'm less sure about the second point. When Parker gives a certain score, the consumer knows what it means. Parker has well-defined and well-understood preferences and gives 95's to one sort of wine and 92's to another. Even if you disagree with Parker's metric, a Parker score provides the consumer with information about the wine. A bundle of scores, averaged together, from various reviewers is far less helpful. Who knows what each of their preferences or scoring criteria are.
The fact that I can't accept ScottS's analogy between wine- and movie-reviewing is relevant here. Heavily reviewed movies tend to be mass-market phenomena with large family resemblances. Wines on the other hand differ enormously in very subtle and intricate ways. That, combined with the fact that reliable wine-reviewing requires a certain expertise, makes reliance on average reviews via a movie-esque star system unhelpful.
Of course, there is an enormous market for debased, uninteresting, industrial-style, mass-produced wine--in other words, wine that hardly deserves to be called wine at all--and perhaps the movie approach to reviewing is useful there. But from his comments it doesn't sound like that's the sort of wine ScottS is into, and if that's the sort of wine you're drinking you might as well just drink Smirnoff Ice. If you want to choose between a Lynch-Bages and a Cos de Estournel, conglomerations of reviews aren't going to help you much. The only exception I can think of is in the extremes--if one of them is really out-of-character bad in a particular year.
Monday, May 14, 2007
Parker on 2006 Bordeaux Futures
Pricing is starting to roll out for 2006 Bordeaux futures, and already prospective buyers are up in arms about prices that are not far below those from 2005, a far superior vintage. The usual venting has been on display on the Squires Board, and Robert Parker himself weighed in on this thread. As usual, Parker's market analysis is worth hearing:
I still believe the "futures" market in the USA will be largely a failure....we presumably purchased loads of expensive 05s, after taking a gigantic position on 2000s....moreover, the dollar is so weak that it just doesn't make much sense to pay up front two years in advance....what if 2007 is fabulous?.....too many negatives working against the USA buyer.
In his book on Bordeaux, Parker advises that there are only four valid reasons for purchasing Bordeaux futures (two years before the wines actually hit the shelves): superb wine from a great vintage; prices that will save you money 2-3 years down the line; securing a limited production wine; or buying in bottle sizes other than the standard 750 ml. Right now, it just does not look like the first two conditions are being met, despite wines that have surpassed the initially dismal expectations for the 2006 vintage. Of course, as Parker observes:
I definitely believe the finest 06s are superior and more complete wines than the 2004s, but the Bordelais also realize that and will price the 06s accordingly...will be interesting to see if the "new" emerging markets....eastern Europe, central and South America, and of course the Pacific rim countries, take important positions on 06s.
Parker acknowledges that his 2006 report gave the Bordelais license to price the '06s above the '04s, despite the hope of many consumers to see Bordeaux prices fall back to earth. Here's hoping that a failed 2006 en primeur campaign in the U.S., as Parker predicts, will help bring the market in that direction.
Thursday, May 10, 2007
Reasons and Wine Scores
Simon posts below on a particular facet of the perverse dominance of Robert Parker’s Wine Advocate on the market for red Bordeaux. Not only do we experience the general ill effects—commercialization, homogenization to his preferences, etc.—of Parker’s power to impose market-driving, numerical scores on the wines he reviews, but also the particular opportunity for malfeasance when retailers get the numbers before consumers do.
The usual explanation of why all this has come about focuses on the supposed deficiencies of the American wine consumer: his desire for quick, straightforward, and simple metrics of quality and success and his preference for Parker’s favored styles of wine. While that’s part of the story, I don’t think that fully captures what’s going on. As everyone knows, the prices of fine wines have been going into the stratosphere over the past several decades. When first growth Bordeaux went for ten dollars a bottle or less, people could afford to experiment or to buy wines based on reputation. If a bottle turned out not to be good, it was a small loss. But with prices now in the hundreds (and even thousands for the most desirable wines) of dollars a bottle, the vast majority of wine consumers, even those who are willing to spend $300 here and there, can’t afford to buy Pavie Macquin or similar wines and just hope that they happen to be good in a particular year. The consumer needs some basis to justify shelling out three-figure sums. Thus the power of the score. It’s a terrible situation, with all sorts of negative externalities, but it’s also the natural result of the price of wine in today’s world.
That said, the other problem here is Parker’s deplorable set of criteria for handing out high scores. If he awarded good scores to relatively austere, elegant, complex, and varied wines rather than to hedonistic fruit bombs, things wouldn’t be so bad. But the rise of point scores is, I think, the unfortunate but inevitable result of increased demand for wines.
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.