This is a longer version of an article also published in the Financial Times.
See the guide to our coverage of Burgundy 2012 for a route to the more than 1,350 tasting notes so far in our database
If you cut through one of Nicolas Potel's veins it would probably bleed red burgundy. His father Gérard died young and the family's Domaine de la Pousse d'Or in Volnay is now in the hands of a Swiss owner, leaving Nicolas to make his way with what was initially an eponymous négociant business and is now a mixture of his own vineyards and bought-in wines under the respective names Domaine de Bellene and Maison Roche de Bellene. The latter business depends on calling in wines and favours from vine growers the length of the Côte d'Or, people with whom he grew up, so he is particularly well plugged in to the nuances of the fortunes of the blessed 'golden slope' that is responsible for all of the world's great burgundy.
I taste with him every year and last December, over dozens of his 2012s, he described a completely novel situation: 'My father said it would happen, but it's still a bit destabilising - all this money to buy land coming from outside Burgundy. There have been really big movements in the price of land, which is now completely stupid. It's become simply too expensive to buy it to make wine, or to buy land from the rest of the family.' This is perhaps a little rich since his backers are Asian as well as French, but it reflects the common structure of most domaines, or small wine farms, in Burgundy whereby they are run by one or two family members but have to pay an annual dividend to many other family shareholders.
Seeing land prices soar - one ouvrée, 428 square metres, went for 2.4 million euros recently - largely thanks to investment from outside the region (Bordeaux, the US, Asia), many non-winemaking sisters and brothers of vignerons have been keen to sell their shares in their family domaines recently, but young vignerons are loth or unable to borrow the finance for such an acquisition themselves. Burgundian farmers may be castigated by their customers for treating themselves to smart German cars for Sunday best, but most of them spend their days in the vineyard. These are essentially peasant farmers, in the non-pejorative sense of the term, with a long tradition of caution. Extremely high prices would be needed just to pay the interest.
This is not Bordeaux, where the grandest growers act en masse each year, goaded by a well-structured marketplace and many an intermediary, and where we have seen such ambitious swings, usually upwards, in prices over the past few decades. Burgundian growers tend to sell on a handshake direct to their buyers - and in very much smaller quantities. There may be only a single barrel of a top burgundy, or even a half-barrel or feuillette containing the equivalent of fewer than 150 bottles, and even one as plentiful as Rousseau's superb Chambertin will rarely fill more than 30 barrels. In comparison, there may be 750 barrels of the grand vin of a Bordeaux first growth to share around the world.
This is the background to the 2012 vintage in Burgundy, the second of three small crops in four years and the result of a growing season that was the most challenging that today's vignerons could remember (frost, hail, storms, rain, sunburn, mildew and in some cases rot). On the Côte de Beaune in the south, yields were disastrously low, thanks to two or even three particularly vicious hailstorms - so much so that I hesitated to make appointments at some particularly badly hit addresses. I was greeted chez Lafarge in Volnay, for example, with the rueful observation that, most unusually, all visitors were on time during the 2013 autumn tasting season because there was so little to taste. So few grapes were harvested from some plots that growers have made notably fewer separate cuvées than usual.
'I've never seen such severe hailstorms - and they struck two years in a row in the same area', said Frédéric Lafarge, whose vineyards, like those of so many of his neighbours in Volnay and Pommard, were stripped by hail both at the end of June and the beginning of August 2012. He made barely 20% of a normal crop. Some growers were insured, but you can insure only for a set sum, and no one could afford to insure against the full financial impact of crop loss at today's prices. Hail tends to come from the south so the Côte de Beaune is generally much worse affected than the Côte de Nuits. Hail incidence seems to be increasing and there is now serious talk on the Côte de Beaune about instigating a network of cannon that will seed hail-bearing clouds at a cost of just €20 a hectare.
After my intensive week of tasting in Burgundy I got the train from Dijon to Paris for the weekend and kept bumping into wine people there badmouthing Burgundians for the price rises being imposed for the 2012s. But I can see why growers have put up their prices, and am not surprised to learn that négociants, the bigger merchants, are now paying such high prices - not least for the small 2013 crop that many growers are choosing to sell early to them rather than bottle wine themselves. Indeed, competition for good 2013s is so fierce that the smaller négociants, the likes of Nicolas Potel and Oliver Bernstein, have been finding it hard to stay in the game. As Olivier Bernstein, who has built up a remarkably successful business since 2007 for his robust, rich wines from a standing start as a grower in Roussillon, admits, 'it has become more difficult to maintain our sources than to sell our wine. I'm helped because they see me more as a fellow vigneron than as a négociant, but I have to take care to understand their problems and personalities, and to be sure to dine with them three times a year or so'.
Such 2012s as there are are currently being offered to British (and Asian) wine lovers by a host of UK-based wine merchants. In general they are delightful wines - at least they are delightful to taste now. I will be offering more specific opinion next week. Because the grands crus are available in such tiny quantities, they tend to be at stratospheric, and sometimes not generally published, prices, which lead cynics like me to wonder just how the profit is being shared between growers and merchants. But burgundy lovers, who are so numerous today, alas, can console themselves with the thought that there are many beautifully made wines much lower down the status ladder. They may cost more than the 2011s but are almost certainly more delicious.
ADVICE FOR 2012 BURGUNDY BUYERS
Don't forget Chablis
Chablis is routinely more attractively priced than southern white burgundy - even in vintages when the Côte de Beaune producers normal quantities - but in 2012 many particularly successful Chablis have been made
Avoid grands crus
Competition is just too great for the 2012s.
Forgive Volnay and Pommard prices
Hail stopped play, or at least cruelly shrank total quantities available.
Don't be a négociant snob
The grower v merchant playing field is more level than ever and the vast majority of surviving négociant businesses are every bit as motivated by quality as are the small growers or domaines. They may also have better equipment and bigger cash reserves with which to make quality-oriented decisions. Our label above left is of one of Drouhin's particularly successful reds in 2012.
Look for older vintages
There is often better value in burgundies with a bit of bottle age that were made before prices zoomed up.