If you think prices for French wines are excessive, you're not alone. Even fine-wine collectors, people who don't raise an eyebrow at a $100 price tag, agree.
According to an informal poll of major wine merchants in the Los Angeles area--considered to be the most important wine market in the United States--the weakness of the dollar against the franc, the number of excellent recent vintages and a lot of full wine cellars have combined to force down demand for expensive wines drastically.
"The market for expensive wines? There is no market, as far as I can see," says Steve Wallace, owner of Wally's on Westwood Boulevard, one of the Westside's top wine merchants. "The people who usually buy these wines, the collectors--their cellars are full. There is only a small group of people I call 'the players,' and they have seen so many good vintages in the last decade they're getting tired of the hype."
He says savvy buyers find older wines at auctions at attractive prices. "You can find Second Growth Bordeaux for under $300 a case," he says.
Larry Seiple at the Wine House in West Los Angeles says the big buyers are dying off. At a recent wine auction, he says, "I saw a number of the 'big players' in Los Angeles. They are not players anymore, not involved in the market except as casual sippers. Their cellars are full, and they are selling their wines at auction." Newer buyers, he says, are more tentative in their purchases.
Futures for the highly praised 1989 Bordeaux are selling slower than in other past vintages, when the wines also were rated as being excellent, merchants say. (In a futures purchase, buyers agree to make a down payment for wine they will take possession of in a year or 18 months, when it is released. Usually, such wines are not tasted by the buyer before they are bought.)
"Without even tasting a wine, people will say: 'I have to have that label,' " says Tom Burke, a Los Angeles attorney and major wine collector. "Isn't that silly?
"People buy wines they think are going to appreciate in value instead of laying them down to drink. They say, 'In 10 years this will be worth $200 a bottle more than I paid for it.' Sure, and I remember too well the people who bought the '69s only to find out that the wines were terrible."
Burke says futures prices are too high; often the same wine will be available at a lower price when it hits the shelves. His advice is: "Take money and put it in a CD (certificate of deposit) and if you want the wine in a decade, you can still find it. It's amazing how many wines you can find on the secondary market. You can find high-quality Bordeaux from the 1970 vintage at a lower price than today's new releases."
"Futures these days are a poor purchase," says Bob Golbahar of Bel Air Wine Merchant. "About 50% (of the sale of futures) is hype and 25% is price: People see the price of what some older vintages are selling for and they get excited.
"But I'd say that 30% or 40% of the people who are buying wine today started with the 1982 Bordeaux, which have gone up in price, and they think prices are going to continue to rise. And I think the first vintage that it won't happen with is 1989."
He says that if the franc, now trading at less than five to the dollar, should reach seven to the dollar, the price of French wine not yet shipped here would drop in price. But even if that doesn't occur, he says, "I think you'll see prices coming back"; some dealers in Bordeaux "are holding the '89s and they will start dumping them if they don't sell them."
Despite the acclaim 1989 Bordeaux red wines have received, some merchants believe the vintage may not be all it's supposed to be.
"I'm definitely concerned about the (1989) vintage," says Keith Perez of Northridge Hills Wine and Spirits. "I think some customers are going to taste the wines and wonder if they are worth this kind of money. The fact that people (from Bordeaux) have alluded to technical problems (with the wines) is a red flag. When they say the acidities are a little out of balance, well, that reminds me a little of 1982, and a lot of my customers are asking me to buy those wines back from them."
In fact, merchants say, so many wine collectors' cellars are full they are trying to turn them into cash.
"People always want the new thing," says Golbahar. "They forget what they have in their cellars. Then, after they buy the new stuff, they start selling their old wines. We're being offered a lot of '85 Bordeaux. That's why I see little market for '88 Bordeaux, and we didn't buy any futures of '89s; we don't see any interest in them. And all the stores that did buy them are just sitting with them."