Long since considered one of the top notch wine producers and France’s biggest wine exporting region, Bordeaux has long since dominated the fine wine market for decades. Whenever a person talks or thinks about expensive, high quality wines, Bordeaux is invariably the first region and brand that comes to mind. Bordeaux is treated like royalty in the wine family and is one of the few wines that is actually treated like a commodity. Vintage Bordeaux are sold for thousands at auctions like they are rare works of art, and new Bordeaux are bought with future contracts. However, while the past few years have seen a major increase in the Bordeaux market, there has also been hints of a downturn, and a few years after the major upsurge in the Bordeaux market there was a damaging downturn. Most of Bordeaux’s assets, such as wine cellars, were sold, their profits quickly dropped, and they were forced to decrease their prices my a large amount.
What Caused The Major Downturn In The Bordeaux Market?
According to the news, there are several reasons for the collapse of the Bordeaux market. One of the main reasons for the downturn in the Bordeaux wines market was an international financial crash. During the time before the global financial meltdown and the credit crisis, Bordeaux decided to rise the price of their Bordeaux Cru classés, such as their Château Lafite brand. Despite the massive raise in price, the Château Lafite sold very well, especially in the Far East. As the prices and demand rose among Bordeaux and the wine market, many investors decided to take advantage of the situation.
However, after an increase of investors and investment schemes, the asset prices for Bordeaux started to drop greatly, and many investors started to panic. They tried to cash out of their profits, but this caused the entire Bordeaux market to crash. This, combined with the already poor financial state of the global economy, caused Bordeaux to greatly decrease their profits and sell off their assets.