In a textbook case of a bubble burst, US retail prices for Bordeaux wines have skidded below wholesale cost as a major importer dumps stocks worth tens of millions of dollars.

US importer Diageo Chateau and Estate Wines (DC&E), a subsidiary of the British drinks giant Diageo, has abandoned Bordeaux wine after 35 years, aggressively liquidating its warehouse stock on an already shaky market.

A source within DC&E, who asked to remain anonymous, blamed “enormous stocks” of unsold Bordeaux for their exodus.

DC&E’s turbulent withdrawal, which has heated up in recent weeks, is having a “huge impact on the market”, Chris Adams, chief executive of Manhattan retailer Sherry Lehmann, said.

For many years, DC&E was the largest US buyer of Bordeaux, and amassed a colossal cellar. Now famous labels are being offered to American retailers at discounts of up to 50 per cent.

“I have $5.5 million worth of First Growths in my warehouse that I cannot sell, because I’ll be 50 per cent more expensive than DC&E,” said Guillaume Touton, owner of Monsieur Touton Selection, a New York importer with annual sales of over $100 million.

“No one else can sell their wine. We don’t know how long the scenario will last,” said Geoff Labitzke, corporate VP of Fine Wine for Youngs Market Company, a California-based wholesaler with annual revenues topping $1 billion.

The timing is particularly bad.

The economic crisis crippled Bordeaux wine sales and “the exchange rate is killing us”, chorused several wine merchants.

The pricing problems for Bordeaux are not new, nor entirely the fault of DC&E’s defection or the economy. Prices soared between 1982 and 2005 under the combined pressure from Asia, speculators and Robert Parker’s faithful legions.

The problem was exacerbated according to Labitzke, because Costco and DC&E bought huge allocations and hoarded the wine, creating “an artificial level of implied demand from the US - the wine estates set their prices based on this perceived demand”.

The bubble burst when vintners badly miscalculated the prices for the 2006 and 2007 vintages. Consumers fled. Wholesalers and retailers cancelled orders. And companies like DC&E were left financing overpriced wine.

Aquitaine Wine Company’s? CFO Margaret Calvet likened the situation to the classic business school case study - tulip mania.

At the end of the 16th century, the world was crazy for tulips. They were coveted as the ultimate luxury good. They were sold on futures. Prices climbed to dizzying heights until buyers would no longer follow. The price no longer had any relation to the flower’s intrinsic value. In 1637, tulip prices crashed, never to recover.

Bordeaux and its partners are, naturally, hoping to avoid the fate of tulips.

Brokers and merchants are pressuring vintners to resist the temptation to raise prices on the excellent 2009 vintage. And some merchants have moved to staunch the flow of discounted wine on the market as well as replenish their own stock from someone willing to lose 50 cents on the dollar.

In the meantime, Bordeaux and its partners in America are bracing themselves for DC&E’s imminent sale of the 2007 vintage. In separate interviews, four wine exec-utives predicted a “bloodbath”.

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