Behind the Headlines : Why So Many Cru Bourgeois Are Selling Up

You might have noticed that the past few years have seen a large number of high-profile Cru Bourgeois châteaux changing hands.

Just this week, Treasury Wine Estates has announced the purchase of three top Cru Bourgeois – Châteaux Belle-Vue (one of my 2018 Top 30 To Drink Now picks), Gironville and Bolaire, adding to its existing ownership of Cambon la Pelouse, bought in 2019.

Other big-name recent Cru Bourgeois sales include Château Lamothe Bergeron to French insurer CAPSSA, Château d’Agassac to Gérard Jicquel, owner of Fourcas Dupré since 2019, and Château Charmail to Olivier Goudet and his wife Valerie Liquard (these last two are Cru Bourgeois Exceptionnels). The Liquards have also bought neighbouring châteaux Bardis and Saint-Paul, also in St Seurin-de-Cadourne, with the intention to join the three estates together keeping only the name Château Charmail – as Jacky Lorenzetti did in 2018 by buying Châteaux Tour de Pez and Clauzet with the stated intention to increase the size of his flagship Cru Bourgeois Exceptionnel Château Lilian Ladouys (it is unclear as yet whether he intends to include parts of them into his more recent purchase within the same appellation, 1855 4th Growth Château Lafon Rochet).

Château Aney in AOC Haut-Médoc is another estate that has been sold and will now disappear into a bigger estate – in this case to Clément Fayat of Château Clément Pichon, with the stated intention to include it in the 2nd wine. We have seen the same thing in Margaux with Châteaux La Galiane and Charmant that have gone to Château Cantenac Brown, adding around 20% to the size of the estate, equivalent to around 50,000 bottles of wine, and Château Pontac-Lynch adding high quality plots of old vine Petit Verdot and Cabernet Franc to Château d’Issan

So what’s going on? The new Cru Bourgeois classification, which brought back in the three levels of châteaux in Cru Bourgeois, Cru Bourgeois Supérieur and Cru Bourgeois Exceptionnel, was supposed to re-engergise the system, and allow the best wines to be rewarded with higher prices. Are all of these sales proof of the effectiveness of that strategy? Or do they show that it is getting harder and harder for the small estates to survive?

The most recent issue of Union Girondine magazine had some sobering figures on the evolution of Cru Bourgeois pricing over the past 10 years. The fast decline is striking, with the average price down to below €3 per bottle (trade price), equivalent to around €6 on shelf. Even Cru Bourgeois Exceptionnels in the 2018 vintage can be found for around €12 on shelf.

This is a hugely sensitive subject in Bordeaux, as you might imagine, but I have asked a Cru Bourgeois owner to speak about the topic.

He has asked that he speaks anonymously, but I am sharing his words here, so that we can all better understand what is at stake.

‘When you look at how the system works, you start to understand why it is so hard for the Cru Bourgeois to make a living.  The Cru Classés increasingly take up all the budget of the négociants, especially if you include the 2nd and 3rd wines of the same estates – not to mention the increasing number of international wines on the Place’.

‘Selling En Primeur means being paid via a trade bill from a négociant – which in the old days meant you could get a line of credit from a bank, so effectively turning that promisory note in cash. But progressively in recent years the banking system is starting to strangle us.’

‘This is happening in three main ways:

• They are getting increasingly selective about which négociants they count as reliable, effectively only the biggest names
• They are capping the amount of cash granted
• They are shortening the credit period from one year to one quarter’

‘What this means is that if you deal with (as most Cru Bourgeois do) multiple mid-size negociants for large amounts of money that you are due to receive a year after En Primeur, you are now in serious trouble.‘

‘It leaves the Cru Bourgeois on death row – sell, leave, or purchase a bigger-named estate to increase brand recognition. Even the upper tier of Cru Bourgeois are stuck between the entry price Cru Bourgeois and the 2nd wines of the 1855 classified estates. It is not a comfortable market segment to be a part of right now.’

Start to think about this more deeply, and it’s impossible not to see that this is a direct result of the so-called ‘Midas in Médoc’ system – the weird legal loophole where any hectare within the Médoc can be purchased by a Cru Classé to become a Cru Classé itself, because the 1855 ranking was given to châteaux entities rather than their specific land holdings.

I’ve said several times that this system is not an issue for wine quality – often the big estates that buy them up have access to better winemaking facilities and expertise, and it is always in their interest to keep the quality of their own wine high. But in terms of diversity of offer for the consumer, it is pretty devastating, particularly as the Cru Bourgeois wines have traditionally offered some of the best quality at affordable prices of all Bordeaux wines. The gradual winnowing out of the category, if it continues, will be a loss for everyone.