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BORDEAUX (Reuters Life!) - Prices for top Bordeaux wines of the most recent harvest, the so-called 2008 'primeurs', have dropped markedly as big wine buyers turn cautious in the current economic crisis.
The sale of the latest harvest on a sort of futures market -- the wine is still maturing in vats and will be delivered at least a year later -- is a unique feature of the Bordeaux wine sector and was a factor behind a long rally in prices as cash-rich international buyers and financial speculators competed for a limited supply of top growth wines.
It starts every year in April, with swarms of tasters and buyers making a tour of the wineries in the Bordeaux and wider Gironde area in southwest France.
This year, the trend was for lower prices.
"For the biggest names, the price drop has been 40 to 45 percent, which is in the end a bit more than what the market expected -- that is prices at the level of 2004 or 2003," said Allan Sichel, the president of the syndicate of wine and spirits traders in Bordeaux and Gironde.
As soon as the tastings were over, Château Angélus at Saint-Emilion said it cut prices by 41 percent to "come back to reality and send a strong signal," said owner Hubert de Bouard.
Prominent names followed such as Lafite-Rothschild, Mouton-Rothschild, Margaux and Latour in the Medoc area.
Chateau d'Yquem, the top Sauternes name, slashed prices by 59 percent and Haut-Brion in Pessac-Léognan offered the trade a price of 125 euros ($177.7) per bottle - down 50 percent.
Prices rocketed in 2005 when there was an exceptional harvest but they stayed high in 2006 and 2007 at price levels that were beyond reach for many wine lovers.
The current round of cuts may bring the private buyers back.
"We have been able to whet the appetite of the real wine lovers again, The market has become healthier and with a good harvest that is very positive, said Francois Lévêque, president of the regional association of brokers in wines and spirits.
"It's a campaign with the flag at half-mast but it has a right of existence," he added, referring to the fact that several players in Bordeaux had suggested at the start of the year to completely abandon this year's 'primeurs'.
Sichel added that the primeurs campaign was important for the local sector, not just for cash flow reasons but also because the attention of the global wine trade was focused on the Gironde area in April-May.
The 2008 campaign confirmed some worries from earlier in the year, namely that the big supermarkets would refrain from buying after having taken a significant role in 2006 and 2007.
"They hesitate with 2008 because they have stocks they bought dearly and they want to sell that first. They expected wine houses to make offers but these remained limited," said Lévêque.
Some houses are making gestures such as Giscours, which offers an extra bottle for every crate of 2007 harvest bought.
But that is not enough for the big buyers.
Because of the hesitant buyers, fewer wine houses have been able to benefit from the primeurs sales while in 2005 almost everybody could find a buyer.
"Historically, the primeurs concerned 50 châteaux. This year we are back to 60-70 names that have sold well. In a normal year we have 200 names and in the year 2000 we had as many as 400 names that sold well," said Lévêque.
"That being said, for those that were in the primeurs sales they have had 10 fat years so their existence is not in danger,"
Writing by Marcel Michelson, editing by Paul Casciato