Bordeaux 2016: Will Politics Impact The Vintage?

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The big wine story is taking place in Bordeaux, where several thousand enthusiastic merchants and journalists are being welcomed. They’re swooping in from around the globe for en primeur, the region’s famous annual spring ritual. (Some call it a circus.)

Merchants and journalists are sipping and spitting hundreds of red, white, and sweet wines from the new 2016 vintage, still aging in oak barrels, to evaluate how the wines are turning out. The weather last year was, as they say, complicated but ended well. So far, local Bordeaux wine whisperers claim the quality of the 2016s is as exceptional, possibly even better, than the superb 2015s.

Is the vintage consistent at both top and less-prestigious estates? Will there be some super values?   Continue reading: Bloomberg

Bordeaux 2016 En Primeur Begins To High Demand

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Olivier Bernard, head of the Union des Grands Crus (UGC), which is hosting Bordeaux 2016 en primeur tastings this week alongside individual estates, said that member estates have already seen 6,500 people come to taste. That’s around 2,000 more than normal at this stage.

‘We have never seen that at UGC,’ he told journalists at the en primeur week opening dinner at Château Brane-Cantenac in Margaux. ‘You need to put some more people at the doors of the châteaux tomorrow morning. I promise you,’ he told assembled producers.

Many producers rank Bordeaux 2016 as among their best achievements.

Yet, much now depends on the views of major critics and the subsequent pricing in a global market that is slightly healthier for fine wine than a year ago but is nevertheless part of a world reeling from political shocks, such as Brexit and the election of Donald Trump. France itself goes to the polls for a presidential election later this month.

Most visitors to 2016 en primeur so far have come from within France, but there have to date been more Chinese tasters than British visitors, Bernard said. After those three nationalities come Germany, the US, Belgium and Switzerland.

The number of Chinese guests is perhaps an indication of a thawing in relations after several Chinese merchants lost money on the 2010 vintage. However, insiders at the dinner said that Chinese buyers were much more cautious today.

Continue reading: Decanter

Sotheby’s Withdraws Magnum Of 1959 Romanée-Conti From Upcoming Sale Pending Investigation

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Auction house Sotheby’s has withdrawn a magnum of 1959 Romanée-Conti from its next London sale after a query surrounding a strip label it carries. The magnum of Domaine de la Romanée-Conti was due to be sold during the London leg of the ‘A Monumental Collection from the Cellars of a Connoisseur’ sale on 29 March.

It has now been withdrawn “pending further investigation” to ensure its provenance and authenticity.

Domaine de la Romanée-Conti was unusual in Burgundy in that it was an extremely early adopter of estate bottling. Initially this was just for its Romanée-Conti, the other wines of the estate were still sent, as was traditional throughout the region, to bigger négociant houses in Beaune for bottling, including Maison Joseph Drouhin.

Gert Crum in his book on the history of Domaine de la Romanée-Conti (published in 2005) notes that it was not until 1929 – a particularly good vintage – that Edmond de Villaine and then co-owner Jacques Chambon decided to begin bottling these other crus at the domaine.

Nonetheless, even if the proportion of wine bottled by Drouhin for the estate declined after this date it remained an important part of the distribution network.

As Crum continues in his book, into the 1940s Drouhin was still “the largest distributor of the Domaine’s wines.”**

With the arrival of the Leroy family in 1942, a family with its own substantial négociant business and distribution network (Maison Leroy), Drouhin’s role as a major distributor no doubt declined yet further but it did not finish entirely and Maison Joseph Drouhin was still an important buyer of wines from Domaine de la Romanée-Conti for several decades afterwards.

Sotheby’s statement makes it quite clear in this regard when it states: “Our research to date confirms that this magnum number was sold by Domaine de la Romanée-Conti to Drouhin.”

The unfortunate association of Domaine de la Romanée-Conti with a number of recent high-profile fraud cases such as The White Club and “Dr Conti” himself, Rudy Kurniawan, tied in as it is with the extraordinary demand and prices wines from the estate command and what is seen as the culpability and malpractice of a few auction houses in accepting consignments of fake wines, naturally leads to high levels of scrutiny even paranoia surrounding old (and sometimes younger) bottles of Domaine de la Romanée-Conti.

Continue reading: The Drinks Business

A New Look Coming To Bordeaux?

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Traditional wine labels from the Bordeaux region of France are changing, slowly. Inspect a half-dozen labels: many include an image—drawn or photographed—of a stately country manor, often with vines planted out front. These less than exciting and hardly eye-catching images focus on the château (plural: châteaux)—the residence associated with a vineyard.

A non-scientific inspection of 100 random wine bottle labels at two ‘Maison du Vin’ (‘House of Wine’) stores in Bordeaux (which sell only wines from their sub-appellation, and which are associated with local winemaker societies) showed that 65% of labels include an image of a chateau, 18% highlight the crest or symbol associated with the château, 12% emphasize stylized designs and 5% include words only.

These châteaux images convey pride, but do they have marketing value?

Apparently, yes.

A 2007 study from the University of California, Berkeley, identified that the image on a wine label has a stronger impact on market success and brand personality than the color or layout of the label. Images of grape motifs or chateaux and vineyards scored well, while those of ‘unusual animals’ ranked lowest.

The 2016 Survey of American Wine Consumer Preferences showed similar results—with 64% of Americans favoring traditional labels over ‘modern’ or ‘fun/whimsical’ labels.

 Another study of Hong Kong Chinese wine buyers, published in 2015 in Wine Economics and Policy, showed that most favor tradition, simplicity and the color yellow on wine labels, although younger wine drinkers now favor ‘elegant contemporary’ labels which accent the color red.

This growing influence of young wine drinkers and changing interest in contemporary labels parallels a subtle trend in Bordeaux.

Continue reading: Forbes

Château Latour Goes Organic

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Organic wines are becoming more and more popular. Even the ultra-traditional Bordelais are doing it.

Driving north from Bordeaux on the Médoc peninsula you pass a number of famous wine chateaux. As soon as you cross the border between Saint-Julien and Pauillac you will see one of the most famous, the Château Latour. The château itself is actually hidden behind trees. What you see from the road is the famous tower, “la tour“, looking almost, but not exactly, like the one you see on the wine label. The real life tour is actually a dovecote from the 17th century.

Like many other Médoc chateaux the history of Latour goes back to the 18th century. The current owner, French businessman Francois Pinault, one of the richest men in the country, bought the chateau in 1993.

Château Latour is a Premier Grand Cru Classé 1855, the highest classification in Bordeaux and the most prestigious wine classification in France and the world. This classification alone allows Château Latour to demand extremely high prices for their wine. And, similarly, it makes consumers want to pay those high prices. Of course, this is a high-quality wine, no doubt about it. But still, you have to appreciate the historic significance and the prestige to accept the price.

Latour may be as prestigious as it gets, but it is not resting on its laurels. The newest project is converting a big part of the winery to organic viticulture.

Continue reading: Forbes

Spotlight On: 2009 La Conseillante

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The competition between the 2009, 2005 and 2000 La Conseillante will be interesting to follow over the next twenty years. There was more of a selection process at this estate in 2009 than there was in 2000, resulting in a beautiful Pomerol offering notes of mulberries, sweet cherries, spring flowers, raspberries and truffles. The color is a healthy deep plum/ruby/purple and the wine is medium to full-bodied with silky tannins, a broad, layered mouthfeel and wonderful freshness as well as length. This gorgeous, complex, Burgundian-styled Pomerol will be drinkable in 4-6 years and should keep for 30-40. (The 1970 is still alive and that was not nearly as well made as the 2009.)

The Wine Advocate Rating: 96

Drink Date: 2016-2056

Who Will Take Parker’s Throne?

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robert parker correlationDespite Robert Parker’s recent retirement from reviewing Bordeaux, his scores continue to have a profound impact on price. With Parker’s influence likely to decline as time goes on, there has been considerable discussion around what or who will influence the market next. Will there be an heir to Parker’s throne, or will a system based on consensus or average scores emerge as the market’s new barometer of wine quality in Bordeaux?

As a preliminary exploration of this issue, Liv-ex measured the correlation between individual critic scores and the prices of the last ten physical vintages of the Bordeaux First Growths. They tested a sample of four popular critics: Robert Parker, Neal Martin, James Suckling and Jean Marc Quarin.

The chart shows how closely correlated the prices of these wines are with scores from the respective critics. The results suggest that Parker Points still enjoy the greatest correlation with price, although the other sampled critics are not far behind.

Naturally there are many factors influencing any market, and fine wine is no different. For example, brand, vintage quality and age are also likely to influence fine wine prices. In addition, there may be issues with the direction of causation in their analysis, with scores perhaps being influenced by prices – blind tastings apart – or being correlated with each other. It will be interesting to observe how the market eventually chooses its successor to Parker Points.

Originally published: Liv-ex

Spotlight On: 2015 Cheval Blanc

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2015 Cheval BlancThe 2015 Cheval Blanc represents the entire vineyard this year, since there is no Le Petit Cheval (two plots that did not meet requirements were not included in any blend). A blend of 45% Cabernet Franc/Cabernet Sauvignon and 55% Merlot, matured in 100% new oak, it has a very complex bouquet, subtle and tightly wound, very precise with dark berry fruit, hints of graphite, minerals and a hint of black pepper, perhaps a little spicier than recent vintages. The palate is medium-bodied with extraordinarily fine tannin. Beautifully balanced, perfectly controlled, this Cheval Blanc gently builds in the mouth, but remains strict and precise. The Cabernet Franc here is very expressive (though apparently the Merlot was showier prior to malolactic). This is an intellectual Cheval Blanc, thoroughly enjoyable, but it will need 10-12 years to really show its pedigree. A profound wine in the making, it will rank with the great wines of the past. – Neil Martin (March 23, 2016)

 

The Wine Advocate Rating: (97-99)

Drink Date: 2024-2064

American Billionaire Buys Three Bordeaux Châteaux

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Chateau Gaby New OwnerThomas Sullivan, billionaire founder of Lumber Liquidators and Cabinets to Go in the US, has bought just under 30 hectares of vines across three Bordeaux Right Bank estates.

The estates are Château Gaby in AOC Fronsac, Château Moya in AOC Castillon Côtes de Bordeaux and Château du Parc in AOC St-Emilion Grand Cru.

These are his first vineyard purchases. Sullivan is a Boston-native and a Miami resident.

Both Château Gaby, the 16-hectare Fronsac estate that sits on one of the appellation’s highest limestone ridges, and Château Moya, with 8 hectares in Castillon, have been sold by Canadian former asset manager David Curl.

The Curl family is moving full-time to South Africa, where they own a farm in Elgin.

They will continue to produce single-plot Syrah and pinot noir under the name Moya Meaker.

The 5.5 hectare Château du Parc is a separate sale by Alain Raynaud, wine consultant and former owner of Château Quinault in St-Emilion.

He bought the estate, located in the village of Saint Sulpice de Faleyrans, in 2011. He expanded it a few years later to add some Cabernet Franc to the previously Merlot-dominant wine.

Continue reading: Decanter

Spotlight On: 2009 Haut-Brion

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westgarth wines 2009 haut-brionWhat a blockbuster effort! Atypically powerful, one day, the 2009 Haut-Brion may be considered to be the 21st century version of the 1959. It is an extraordinarily complex, concentrated effort made from a blend of 46% Merlot, 40% Cabernet Sauvignon and 14% Cabernet Franc with the highest alcohol ever achieved at this estate, 14.3%. Even richer than the perfect 1989, with similar technical numbers although slightly higher extract and alcohol, it offers up a sensational perfume of subtle burning embers, unsmoked cigar tobacco, charcoal, black raspberries, wet gravel, plums, figs and blueberries. There is so much going on in the aromatics that one almost hesitates to stop smelling it. However, when it hits the palate, it is hardly a letdown. This unctuously textured, full-bodied 2009 possesses low acidity along with stunning extract and remarkable clarity for a wine with a pH close to 4.0. The good news is that there are 10,500 cases of the 2009, one of the most compelling examples of Haut-Brion ever made. It requires a decade of cellaring and should last a half century or more. Readers who have loved the complexity of Haut-Brion should be prepared for a bigger, richer, more massive wine, but one that does not lose any of its prodigious aromatic attractions. – Robert Parker Jr. (2012)

Wine Advocate Rating: 100

Drink Date: NA

Spotlight On: 2009 Montrose

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2009 montroseHarvested between September 17 and October 5, this wine seems always open for business, so to speak, much like the great 1982s. The summer of 2009 was very hot and dry, which got the harvest off to a reasonably early start. The blend was 65% Cabernet Sauvignon, 29% Merlot, 5% Cabernet Franc and 1% Petit Verdot. Jean Bernard Delmas’ goal was to find perfect equilibrium between freshness and concentration, given its incredible opulence and the voluptuous character this vintage offered. That’s what this wine has in abundance. With an astounding dense purple color, the wine has velvety, sweet tannins, and an extremely open-knit and opulent blueberry, blackberry and creme de cassis nose. There is scorched earth, vanilla and, again, telltale licorice and spice. It is unctuously textured – thicker and juicier than the 2010 and more forward. This wine should come into its own in another five years. And again, it has at least 50+ years of aging potential. – Robert Parker Jr. (2014)

Wine Advocate Rating: 100

Drink Date: 2018-2068

Spotlight On: 2009 La Mission Haut Brion

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2009 la mission haut brionA candidate for the wine of the vintage, the 2009 La Mission-Haut-Brion stood out as one of the most exceptional young wines I had ever tasted from barrel, and its greatness has been confirmed in the bottle. A remarkable effort from the Dillon family, this is another large-scaled La Mission that tips the scales at 15% alcohol. A blend of equal parts Cabernet Sauvignon and Merlot (47% of each) and the rest Cabernet Franc, it exhibits an opaque purple color as well as a magnificent bouquet of truffles, scorched earth, blackberry and blueberry liqueur, subtle smoke and spring flowers. The wine’s remarkable concentration offers up an unctuous/viscous texture, a skyscraper-like mouthfeel, sweet, sumptuous, nearly over-the-top flavors and massive density. Perhaps a once-in-a-lifetime La Mission-Haut-Brion, the 2009 will take its place alongside the many great wines made here since the early 1920s. The good news is that there are nearly 6,000 cases of the 2009. It should last for 50-75+ years. Given the wine’s unctuosity and sweetness of the tannin, I would have no problem drinking it in about 5-6 years. – Robert Parker Jr. (2012)

Wine Advocate Rating: 100

Pape Clement 2012 On The Rise?

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pape_clementOne year ago it was observed that Pape Clement 2012 offered relative value as one of the top five Bordeaux reds in Robert Parker’s in-bottle report of the 2012 vintage. He upgraded it to 97 points from a barrel range of 92-95 points and described it as “a candidate for near-perfection”.

Pape Clement 2012 is the fourth most visited wine page of the 2012 vintage on Liv-ex this year. It has seen significant activity following the improved score and has risen 17.4% from a Market Price of $666 per 12×750 in August 2015. As the table below suggests, it still offers relative value against similar rated 2012 vintages at a current Market Price of $782.

As a brand, Pape Clement has been gaining the attention of buyers and critics alike. The 2015 was awarded 95-97 points by Neal Martin and was “highly recommended”. In April this year, Parker rated the 2009 vintage 100 points in the Hedonist’s Gazette, having previously scored it 95 points. It has since risen 52.6% and last traded at $1,663. The 100-point 2010 vintage last traded at $1,904.

Originally published: Liv-ex

Bordeaux 2005 Retrospective: Reaping The Benefits One Year Later

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Robert ParkerA year after Robert Parker’s much anticipated retrospective of the Bordeaux 2005 vintage, which estates have profited the most? It would appear that while some wines have continued to roll on since last summer’s report, not all of the 2005s have experienced even a small boost in price.

Parker’s 10-years-on review of the much-admired vintage created a flurry of interest in the 2005s. Both in the run-up to the report’s release and in its immediate aftermath last June and July, wines from the vintage took prominent trading spots on the Liv-ex platform as buyers manoeuvered to acquire labels they thought might receive an upgrade – and which would then rise in price.

When the report came out at the end of June there were a number of upgrades, with 12 wines given ‘perfect’ 100-point scores but there were also murmurs that some (predominantly UK) favorites from the Left Bank had been overlooked once again.

The scores created a brief but intense period of trading for the ‘05s before quickly subsiding again but that doesn’t mean interest has dropped away entirely.

The effect of all this anticipation and trading is clear. Liv-ex reports that between June 2014 and June 2015 the 2005 vintage sub-index rose 10.3% and the wines are still up on average almost 5% over the past year.

Two thirds of the 2005 clarets on the index are in positive territory over the last year, the most successful being Smith Haut Lafitte which is up 41% following its upgrade from 95 to 98-points.

Angelus, Gruaud Larose, Beychevelle, Cheval Blanc, Haut-Brion, Clinet, Clos Fourtet and Troplong Mondot are all wines that have seen double digit increases in the past year.

Yet there have also been casualties, not least Margaux which was one of the wines in particular that merchants felt should have been upgraded to 100-points.

Ahead of the report that expectation saw its stock rise 7.8% in value but it has since declined 5.1% having only managed to maintain a 98+ score – potentially creating a buying opportunity for less score-sensitive collectors however.

Elsewhere, Parker’s influence apparently has less to do with the wine’s progress.

Continue Reading: The Drinks Business

Haut Brion 2012 On The Move

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Haut-BrionWhile only a handful of Bordeaux 2015s have traded since release, the vintage is nonetheless of interest to merchants. Margaux, Canon and Lafite 2015 – which has traded – are the most searched for wines on Liv-ex over the last month.

Also of interest is Haut Brion 2012. Having been scored 93-95 in barrel by Robert Parker, its price soon drifted from the $3,720 per 12×750 release. In April 2015 the wine was trading for $2,925 when Parker awarded it 98-points in bottle. He heralded it as “one of the stars of the vintage” and prices shot up as a result, peaking back at $3,720 before stabilizing.

The 2012 vintage has been attracting buyers for several months now, and the recent En Primeur campaign has left them seeking value in back vintages. Consequently, Haut Brion 2012 is on the move again. Now at $4,785, it is still 13% below the $5,425 of the new 2015 release (98-100 from Neal Martin) – but will this gap remain for long?

Originally published: Liv-ex

Is There A Coming Burgundy Apocalypse?

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Romanee ContiFor years, vintages of Burgundy have been smaller and smaller, while prices have gone up and up. Rain, floods, and hailstorms have decimated vineyards since 2010, especially in the Côte de Beaune (the southern part of the famous limestone strip that’s home to the most famous vineyards). Growers invested in weird anti-hail devices, but, alas, they haven’t worked. Regional businesses are facing a crisis of how to survive.

The chardonnay grape harvest was down 30 percent in 2013, pinot noir as much as 50 percent. In 2014, which had some of the worst weather in recent memory, some winemakers lost 90 percent of their crop; 2016 is already looking to be worse, weatherwise. This means the remaining grapes are much more expensive, and businesses that depend on making wines from them will be forced to pay a premium they increasingly can’t afford.

“Growers essentially say, pay what we ask, or we’ll sell to someone else,” says Blair Pethel, one of the growing number of “micro-negociants”— small domaines who buy grapes from growers to turn into wine rather than owning their own vines. Grapes to make his 300 bottles of 2009 grand cru Charmes-Chambertin cost $8,800; the price for the same amount in 2015 was about $25,000. He didn’t buy.

Continue reading: Bloomberg

Sotheby’s To Host An Ex-Cellar Sale Featuring Wines From La Mission Haut-Brion

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Haut-BrionSotheby’s will host an ex-cellar sale featuring wines from La Mission Haut-Brion in New York this October. The sale will cover 270 lots, with wines spanning 1916 to 2012 and including some of the estate’s rare white wine which is produced in tiny quantities.

Prince Robert of Luxembourg, president and CEO of La Mission, explained that the estate had always had a strong following in the US hence the reason to hold the sale there and not in Hong Kong as many other high-profile Bordeaux estates have,

He said: “La Mission is an equal and complimentary sibling for Haut-Brion, offering a true case study for the value and character that is imbued in an exceptional terroir. Crafted by the same wine-making team as its direct neighbour its unique character nonetheless always shines through.

“We are excited to share some very rare treasures from our cellars with wine-lovers from all around the world and we salute the great professionalism of Sotheby’s for offering us the ideal platform to accomplish this.”

Continue reading: The Drinks Business

 

Perfection For 2015 Cheval Blanc?

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westgarth wines cheval blancCheval Blanc 2015 has been released at $611 per bottle ex-negociant, up 50% on 2014 ($407). It is being offered by the international trade at $7,642 per 12×75. This is 52.9% higher than the opening price of the 2014 ($4,998).

Ausone 2015 was also released at $611 per bottle ex-negociant, but is offered by the trade at a higher price of $8,236 per 12×750.

Cheval Blanc 2015 was scored in the late 90s by several key critics. In his report, Neal Martin (97-99) noted that it “flirts with perfection” but lamented Cheval’s tendency to price highly, “a pity because it puts a black mark against a stunning succession of wines in recent years”.

The wine’s price pitches it next to the 2005, which was upgraded to 100 points by Robert Parker in June last year. It is offered at discounts of 16% and 27% to the 2009 and 2010 respectively.

Buyers looking back might also find relative value in 2006 and 2014 which have strong critic scores and are priced around 35% below the 2015.

There was no Petit Cheval produced in 2015: the vast majority of parcels were deemed to be of high enough quality to go into the Grand Vin.

Originally published: Liv-ex Blog

Rare Domaine de la Romanée-Conti Sold At Sotheby’s Auction

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Domaine de la Romanée-ContiSix bottles of 1926 Vosne-Romanée ‘Les Gaudichots’ from Domaine de la Romanée-Conti have sold for over $70,000 at Sotheby’s recent London sale. DRC dominated the sale, held on 15 June, with buyers focusing on half cases of 1990 Romanée-Conti, La Tâche and Richebourg.

The sale made over $1,571,476 in total and was over 90% sold. Stephen Mould, head of Sotheby’s Wine, Europe, commented: “We saw excellent results with a collection of first growths and Domaine de la Romanée Conti, and a collection consisting mostly of youthful Claret, both 100% sold.

“A thirst for rare wine was evident throughout the sale, led by six bottles of Vosne Romanée Les Gaudichots 1926 – part of a time capsule of historical wines with impeccable provenance – which soared over estimate.”

The half dozen of ‘Les Gaudichots’ were sold to a US trade buyer for $70,077. It’s very rare to see DRC premier cru for sale and the domaine folded its Gaudichots plot into La Tâche when it acquired the monopole from the Liger-Belair family in the 1930s so the label no longer ‘exists’ strictly speaking.

Top claret lots at the sale included 1989 Haut-Brion and La Mission Haut-Brion, 2000 Lafite and 1994 Petrus.

Originally published: The Drinks Business

Mouton Rothschild 2015 Released

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Mouton RothschildMouton Rothschild 2015 has been released at $432 per bottle ex-negociant, up 60% on 2014. It is being offered by the international trade at $6,652 per 12×750. This is 83.6% higher than the opening price for the 2014.

Mouton Rothschild 2015 received 97-99 from Neal Martin, who described it as “a classic Mouton Rothschild that will live for 50 or 60 years, not a million miles away from say, the 1986 and 2010.”

In terms of pricing, the new wine is indeed “not a million miles away” from the 2010. It matches the current market price of the 2005, which scored 97 from Robert Parker and 98 from Neal Martin – and has nearly a decade in bottle.

Continue reading: Liv-ex

Bordeaux 2015: Most Expensive Since 2010

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Chateau BeychevellePrice increases for the Bordeaux 2015 vintage compared with 2014 are averaging about 15 percent so far and in some cases have reached 20 percent or more, often making the critically acclaimed new wines just being released to buyers the most expensive in the market since the 2010 crop.

While few of the top estates have priced their wines yet, holding back to see how the sales campaign develops, early releases have included Chateau Beychevelle, Chateau Pape Clement and Chateau Langoa Barton, according to data from the London-based Liv-ex online wine market.

An exceptionally hot June and July was followed by rain in August that helped the vines, and then favorable weather throughout the harvest gave flexibility to pick grapes at the optimum time. After three tough vintages in Bordeaux from 2011 to 2013, and a return to a more classic style in 2014, last year’s wines have the potential to be the best since the highly rated 2009 and 2010 harvests.

Focus on the new wines being sold “en primeur” before bottling damped trading in earlier vintages from the region on Liv-ex, as merchants positioned themselves to bid on wines likely to come to market later this month. “Market participants have started to turn their attention to the 2015 en primeur releases and are hoping for prices that will generate demand,” Liv-ex said in its market blog.

Continue reading: Bloomberg

Lafleur 2015 Released: A “Standout” Of The Vintage

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Chateau-Lafleur Lafleur 2015 has been released and is being offered by merchants at $6520 per 12×750.

The wine has received an array of high scores from critics. James Suckling awarded it a straight 100 points and reflected on its perfection: “It’s hard to describe perfection. It’s not just power and depth. It’s something mystical and ethereal.” Neal Martin, who scored it 97-99, predicted that “it will be one of the standout wines of the vintage”.

Lafleur’s wines from the ‘great’ 2005, 2009 and 2010 vintages command a high premium on those from other years. At $6,000, the 2015 sits above the majority of back vintages but represents a significant discount on the ‘greats’: it is priced 55% below 2005. Buyers looking for the best of Lafleur might indeed find relative value here.

Originally posted: Liv-ex Blog

Pape Clement 2015 Released

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pape_clementPape Clement 2015 has been released at €58.8 per bottle ex-negociant, up 18.1% on the 2014 release price of €49.8. It is being offered by the international trade for £625 ($902.36) per 12×75. This places it above the other four most recent vintages, but represents a significant discount on 2005, 2009 and 2010.

A number of critics have been positive in their reviews of Pape Clement 2015, though their scores are less generous than Robert Parker’s were for several back vintages. Neal Martin commented that the wine will “doubtless evolve into one of the best wines this estate has produced since the 14th century” and awarded it 97-98.

For buyers convinced that the wine is amongst the estate’s greatest, the 2015 might look appealing at around half the price of the 2005. Will it climb to the heights of 2005, 2009 and 2010? Others might look back to vintages such as 2012: it was among Parker’s top five wines of 2012 and has a market price of £571 ($824.35) per 12×75.

Originally posted: Liv-ex Blog

‘Sun’s Come Out’ for Bordeaux 2015

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MoutonThe quality of the 2015 vintage being presented to merchants over the past month makes it feel like the “the sun’s come out” for the Bordeaux region, according to Robert Wilmers, M&T Bank Corp. chairman and chief executive officer and owner of Chateau Haut Bailly, a grand cru classe wine estate south of the city.

“It’s a pleasure for the psyche,” the U.S. financier said in an interview April 4 in the salon of his nineteenth-century chateau overlooking vines, which were just starting to bud. The estate, which he bought 18 years ago, lies on sandy-gravel slopes just outside the town of Leognan, part of the Pessac-Leognan appellation.

While Wilmers said recent years have been good for Haut Bailly, Bordeaux more generally has had a run of less successful vintages, particularly from 2011 to 2013 when prices fell as demand for first growths waned. The London-based Liv-ex Fine Wine 50 Index has now risen for the past five months, its longest streak of monthly gains for five years.

Continue reading: Bloomberg

A New Dawn For Bordeaux, Or Is The Sun Setting On En Primeur?

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MoutonIt started innocuously enough with a headline on Monday morning in the local Sud Ouest newspaper that proclaimed the Bordeaux 2015 vintage was the ‘last chance to save the en primeur system’.

We’ve all heard that before of course. This time around it was an interview with the president of négociant company Vintex, Patrice Ricard, who organises one of the most popular ‘off-circuit’ tastings for buyers and journalists. It was a great interview from local journalist César Compadre, a pretty searing analysis of the primeurs but nothing that we don’t already know, detailing too many years of overpriced wines, small releases, unsold stocks piling up in merchants’ cellars.

‘Thankfully interest rates are still low,’ Ricard said, ‘which means it doesn’t cost too much to finance the stocks sitting in the distribution chain. If they were higher, the whole thing would have already blown up’.

Ricard mentioned the superb châteaux that are available to buy between €10 and €20 and lamented the focus on the big names that often directs attention away from these smaller properties.

This is the part where you know the drill. I tell you what is happening behind the scenes but don’t tell you who told me. This time it is a number of small châteaux owners who were both relieved and rather thrilled to read Ricard’s ‘courageous’ (their words) views that suggested both that they should be given more of a chance and how the system is stacked in the favour of the big guys.

Their pleasure was short-lived, however, when they heard that by mid-afternoon on the same day of publication Ricard had sent a letter to a number of major châteaux owners refuting the interview (which he referred to as ‘an informal conversation’) and underlining their continued importance.

The reason that this is of interest is that it shines a light on one of the real potential issues with the en primeur 2015 campaign.

Continue reading: Decanter

April Auctions Announced By Sotheby’s And Christie’s

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lynch-bagesSotheby’s sale on 13 April will feature a “superb collection” of claret from the 1980s and 1990s, featuring 1990 La Mission Haut-Brion, 1995 Mouton Rothschild, 1996 Haut-Brion, 1986 Pichon Comtesse de Lalande and 1998 Latour and Lynch Bages among much more.

Furthermore, the sale includes Sassicaia from 1995-2002, Burgundy from De Vogüé, Anne Gros, Domaine de la Romanée-Conti, J-F Mugnier and Armand Rousseau as well as Champagne in the form of Bollinger Grande Année, Dom Pérignon Rosé, Salon and 1953 Krug.

Meanwhile, in New York on 16 April Christie’s will likewise auction a collection of fine and rare wines but the sale’s real focus is a collection of spirits, made up of Cognac and Armagnac, each dating to a term of a US president from George Washington to Jimmy Carter.

Read more: The Drinks Business

Sotheby’s To Auction 20,000 Bottles From William Koch’s Cellar

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Koch WineOn May 19, 20,000 bottles of wine from William Koch’s cellar will go to auction at Sotheby’s. The blockbuster sale, spread across three days (May 19–21), represents close to half of the billionaire’s total collection and was acquired over the course of nearly 40 years.

“He’s bought on scale,” said Connor Kriegel, head of auction sales for Sotheby’s Wine, who organized the sale. “Whenever he saw an opportunity to buy the things he loved, he bought.”

Koch’s wine, which will be broken up into about 2,700 lots, is estimated to go for $10.5 million to $15 million. More than 120 lots are from the coveted Château Latour, including one that consists of six 1961 magnums, which carries an estimate of $42,000 to $60,000. There are also more than 80 lots of Château Mouton Rothschild; one, composed of 10 bottles of Mouton’s 1945 vintage, is expected to sell for $80,000 to $120,000. “That’s one of the most legendary wines,” said Kriegel. “It’s the wartime vintage, and it’s one of the greatest wines they’ve ever made. To see it on such a scale is pretty spectacular.”

Continue reading: Bloomberg

Château Latour 2000 and Les Forts de Latour 2009 Release

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53888565.ChateauLatourLatour released its latest set of wines on Tuesday 22 March, as part of its new strategy of putting mature wines onto the market rather than selling them before bottling under the Bordeaux en primeur system.

The first wine Château Latour 2000 was released at €770 (about $860) per bottle ex-négociant from Bordeaux, and was being offered by merchants in London for around £8,000 (about $8,900) per case of 12 75cl bottles.

The second wine Les Forts de Latour 2009 was released at €150 (about $165) per bottle ex-négociant.

Data from fine wine trading platform Liv-ex shows that Latour 2000 was being sold at several hundred pounds more than its secondary market price; perhaps suggesting confidence that consumers would pay for the added value of the wine having come direct from Latour cellars in Pauillac.

Initial reactions were broadly positive in a market that has been relatively lukewarm to the top Bordeaux wines in recent years.

In Bordeaux itself, most négociants said that Latour 2000 sold out rapidly. An exact figure for the quantity of wine released could not be obtained, but it was believed to be the entirety of stocks left at the château.

The price was ‘within reason, allowing some margin to be added by the merchants’, said one broker.

Les Forts de Latour 2009 was reportedly seeing less enthusiasm, because the price offered represented a premium of around 20% on stocks already out on the market.

Continue reading: Decanter

Bordeaux 2012: On A Roll

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Angelus_2012Bordeaux 2012 was not an immediate success on the secondary market. Between En Primeur release and this time last year – when the wines had become physical – the overall value of those within the Bordeaux 500 index had dropped by 2.6%. Trading activity was also low: the vintage had accounted for just 2.9% of Bordeaux trade.

Since becoming physical, the news has been more positive: the wines have made gains of 9.7% over one year, outperforming the Bordeaux 500 index which is up 0.7% over the same period. This means that the wines are now in positive territory – up 6.9% – since En Primeur release. Activity has also increased, with the vintage accounting for 9.5% of Bordeaux trade since February 2015.

Of the 48 wines from the vintage represented in the Bordeaux 500 Index – Latour and Forts Latour 2012 are yet to be released – 41 are in positive territory over one year. Pavie 2012, which carries a special silver label to celebrate its elevation to Grand Cru Classé A status, has made the greatest gains. Interestingly, Angelus 2012 (-6.5%) is among the seven fallers. It has failed to maintain the boost offered by its own commemorative bottle which was announced in May 2014.

Continue reading: Liv-ex

Château Angelus Managing Director, “I Don’t Want Our Wine In Funds”

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angelusStéphanie de Boüard, managing director of Château Angelus, is battling to keep the estate’s wines away from investment funds and into consumers’ glasses.

“There was a lot of enthusiasm for our 2012 gold bottle but I don’t want it to become too speculative. I don’t want to see our wines end up in funds. You can’t block that from happening but you can try to control where the wine gets sold. I want to do everything I can to discourage speculation and am trying to prevent our wines from ending up in investment funds. It’s important that our wines are opened and enjoyed rather than traded. Above all wine is about pleasure.”

On the en primeur system:

“Both merchants and consumers are losing faith in en primeur. The whole point of the system is that the wines appreciate in value and if they don’t then there’s no reason for consumers to do it.

“Angelus has always gone up in value after release, which is one reason why it’s worth buying the wines en primeur,” she said.

Angelus 2005 was the biggest riser on Liv-ex in 2015, up 39.9% from £2,250 to £3,148 between December 2014 and November 2015. The estate has now edged into ‘first growth’ territory in terms of average pricing.

de Boüard puts the impressive price rise down to its perfect 100-point score from Robert Parker rather than the château’s promotion to Grand Cru Classé ‘A’ status.

Of the promotion, de Boüard said: “It’s a reward, but I think it’s also something the market has anticipated. It wasn’t given to us out of the blue, but it’s important to be humble because you never know what might happen.”

Continue reading: The Drinks Business

Is A Burgundy Wine Shortage Looming?

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drcBurgundy wines may become even more difficult to find because of vine disease and smaller harvests from aging vineyards, according to a new report by the region’s wine council. While demand for Burgundy is strong, and prices for top wines remain high, overall harvest size is set to shrink – and not just due to the perennial threat of hail storms.

Burgundy vineyards have ‘aged and the yields reduced significantly since 2000 in response to a range of factors’, said Corinne Trarieux, of the BIVB Technical Centre. The first problem relates to degenerative vine diseases such as esca or fanleaf, which affect almost 14% of vineyards and ultimately kill many vines. More than 100,000 hectares of vines across France were lost to disease in 2014, French government figures show.

The age of vines is a problem, too. In Côte d’Or and Saône-et-Loire, 60% of the vines are over 30 years old. The average age of a Burgundy vineyard is 50 years, which causes lower yields. Turnover of vines is under 1%. The replanting of dead vines only and not the whole area – ‘complantation’ – is a factor in low production. Officials conclude that, in the face of climate change, growers need to be proactive in addressing the various issues.

Continue reading: Decanter

Lafite 2003 Leads Liv-ex Trading by Value in Past Week

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LafiteChateau Lafite Rothschild 2003 was the most traded wine by value on the London-based Liv-ex wine market in the week to Feb. 11, closely followed by Chateau Latour 2009, according to data from the exchange on its market blog.

The Lafite 2003 sold for 6,660 pounds ($9,659) per 12-bottle case and the Latour 2009 for 7,620 pounds, Liv-Ex reported. Other wines among the top five sold by value were Lafite 2012, Moet & Chandon Dom Perignon 2005 Champagne and Chateau Margaux 2005, according to Liv-ex data.

Bordeaux wines’ market share rose to 75.7 percent over the week to Feb. 11 from 70.4 percent a week earlier, while remaining below the January average of 78.6 percent, according to the data. Burgundy’s share slipped to 8.8 percent in the week to Feb. 11 from 9.6 percent the previous week, while holding above the January average of 6.2 percent.

“Focus turned towards higher value wines,” Liv-ex said on its blog. “The total value traded on the exchange increased, while volume dipped.” The most traded wine by volume in the week to Feb. 11 was Chateau Rieussec 2010 Sauternes, just ahead of the Dom Perignon 2005 Champagne.

Click here to read on Bloomberg Business

Bordeaux 2006: The Ten Year Tasting

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montrose_label1The first release came a little earlier this month from Pontet-Canet which released a tranche of its 2006 vintage and late last week Montrose offered négociants some of its 100-point 2009, a parcel of ‘R’ de Rieussec has also been released albeit to less comment.

Both releases from the Pauillac and St Estèphe properties stimulated an increase in trading for the wines in question but not, it should be noted, for the prices asked for by the châteaux.

Pontet-Canet released its 2006 at €95 per bottle, or £850 a case and the 2009 Montrose was out at €240 p/b.

Although the wines did see quite a lot of trade by value on Liv-ex, they were for prices at a level substantially below those being asked for.

Continue reading: The Drinks Business

Liv-ex 100 Index Gains 1.1% In January

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impacts

The Liv-ex 100 gained 1.1% in January to close on 240.87. The Liv-ex Fine Wine 50 index also moved up, increasing by 1.7% over the month to close on 269.17. The Liv-ex 100 has a history of moving up in the first quarter only to end the year down, as was the case in 2011, 2012 and 2013. 2014 saw a reversal of this pattern while 2015 looked altogether more confused. It is therefore too early to call whether this positive movement will be sustained.

The top movers within the index are all Left Bank Bordeaux names. Pape Clement 2010, amongst the cheapest 100-point Bordeaux wines, was the top riser. Two Haut Brion vintages also feature. Three of the five steepest fallers hail from Champagne. Last year, Champagne overtook Burgundy to become the third most traded region, and the Champagne 50 index reached a new high.

Originally published: Liv-ex Blog

Petit Mouton Continues To Drive Second Wines

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Petit MoutonThe second wines have been outperforming the First Growths, thanks in part to their ability to offer access to these big brands at lower price points. Petit Mouton in particular showed a strong performance: in 2015 it was the biggest riser of the Bordeaux 500 index, gaining 8.3%, no doubt benefitting from ‘brand Mouton Rothschild’ – number one in the Power 100 – of which it forms a part.

The table below shows the price movements of the ten most recent physical Petit Mouton vintages. Only one of the ten declined last year, with half gaining more than 8%. There appears to be little correlation between scores and performance: the 86-point 2003, “Lacking a bit of backbone but decent enough” (Neal Martin) gained 20.6% while the 90-point (Robert Parker) 2012 ran flat. Instead buyers are seeking wines with bottle age, and prices are being driven up by scarcity: older vintages are increasing in value as the wine is being drunk.

With this pattern evident, the lower priced recent vintages might present opportunities for those looking to hold onto the wines for several years. The 2003 is priced 61% above the 2012. A sign of what is to come?

Originally published: Liv-ex Blog

Bordeaux Copyrights 1855 Under European Law

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photo: Chateau Margaux

Bordeaux châteaux making up the 1855 classification have copyrighted the term ‘1855’ in the European Union to deter others from misusing it in a wine context.

The move means that the term ‘1855’ in a wine context has the same legal protection in European Union courts as the term ‘Grand Cru Classé’, according to the Conseil des Grands Crus Classés en 1855.

Bordeaux producers have lobbied for protection for five years, but did so with greater urgency after seeing the problems surrounding the 1855.com online wine merchant, which changed its name to Heracles but was last year fined 200,000 euros for giving false information to the Paris stock exchange. The firm was plagued by complaints about undelivered Bordeaux en primeur wines.

The Bordeaux 1855 classification dates back to the Universal Exhibition held in Paris in the year 1855 at the request of Napoleon III.

With this copyright now achieved, only the 61 red wines and 26 sweet wine châteaux who received recognition in the ranking have the right to use it on their label.

Continue reading: Decanter

Fine Wine Outperforms Other Indices in 2015

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IndicesThe Liv-ex Fine Wine 100 ended last year a tantalizing, frustrating 0.1% behind where it closed in 2014.

Nonetheless, it escaped the “considerable pressure” put on other financial markets in the second half of 2015 by the economic wobbles of Greater China.

As the accompanying chart shows, the FTSE 100 began to struggle post-May, ending the year down 4.9% and although the S&P 500 rallied in October it sank back before the end of the year to close around 0.73% below 2014. Gold declined steadily throughout the year (down 11.2%) while the bottom seemingly dropped out of the copper market.

Liv-ex commented: “Looking at an industrial commodity such as copper — considered by many as a proxy for China GDP growth — the Liv-ex Fine Wine 100 was relatively robust, especially when considering copper hit a six-year low in 2015 and closed down around 27.9% by the year-end.”

Has Stability Arrived For Fine Wine Market?

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margauxFor the first time since July 2010 the bid:offer ratio on Liv-ex (the total value of bids on the Liv-ex exchange divided by the total value of offers) has risen past 100%, a positive sign for fine wine prices as, historically, a bid:offer ratio of over 50% indicates an uptrend in the market – and price stability.

The last time the 100% ratio was seen was when the China-led bull run pushed Bordeaux prices to such terrifying heights.

But with the ‘Chinese-factor’ now largely removed from the market, what’s causing the current movement?

There are a number of factors helping the fine wine market at present. Liv-ex noted: “Recent currency movements have definitely been a driver behind trade on the exchange with the euro strengthening against sterling from November, helping to push the Liv-ex 50 index higher.

“The average bid:offer spread is also at a wide 20%. Historically a level below 15% has been an indicator of sustained price rises. In addition, anecdotal evidence suggests the majority of sellers still remain on the sidelines, having just returned from the seasonal holiday.”

Continue reading: The Drinks Business

Case of DRC Makes HK$1.5M

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drcA case of Domaine de la Romanée-Conti’s Romanée-Conti 1990 has made HK$1.5 million at Zachys’ sale in Hong Kong. The price paid for the sought-after Burgundy is the highest price paid for a case of wine since 2012 the house reported. The 12 bottles had been estimated to realise a possible HK$1.9m but fell slightly short of this, making HK$1,592,500 in the end.

Held on 16 January, the sale was Zachys first of the season and saw 694 lots of fine wine and spirits realise a total of HK$23m with Bordeaux, Burgundy and Scotch and Japanese whisky attracting the bulk of buyers’ interest.

A 12-bottle case of 2005 Petrus made HK$245,000 and an imperial bottle of 1982 Lafite HK$159,250.

The 150 lots of rare whisky was one of the largest spirits consignments Zachys has ever offered. In total the spirits section of the sale made HK$3.9m.

There was “active bidding” for five bottles of Hanyu Ichiro’s Malt Card Series which sold for HK$122,500. A bottle of Karuizawa Noh 41 Year Old Cask #1842 Single Cask 1971 sold for HK$110,250, while a bottle of Glenfiddich Ultimate 38 Year Old Single Malt made HK$63,700, “well exceeding pre-sale expectations,” said Zachys.

Continue reading: The Drinks Business

Fine Wine Market Resists Great Fall of China

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Liv-ex 100 IndexThe Liv-ex Fine Wine 100 index closed 2015 largely unchanged from where it started a year earlier at just 0.1% below its December 2014 close. However, with most financial markets coming under considerable pressure in the second half of the year, the Liv-ex Fine Wine 100 fared relatively better than many other financial assets and physical commodities.

Looking at an industrial commodity such as copper — considered by many as a proxy for China GDP growth — the Liv-ex Fine Wine 100 was relatively robust, especially when considering copper hit a six-year low in 2015 and closed down around 27.9% by the year-end.

Likewise, precious metal gold hit a five-year low in November 2015, falling around 11.2% over the year and leaving its status as a safe-haven hanging in the balance, as investors looked towards the Federal Reserve’s much anticipated US interest rate hike that finally materialized in December.

The Liv-ex Fine Wine 100 also compared favourably to key equities despite a strong performance in the first half of the year. The FTSE 100 was down around 4.9% in 2015 having hit an all-time high in April, while the S&P 500 also closed the year moderately lower, down around 0.73% on year, having established an all-time high in May 2015.

The levelling off of the Liv-ex Fine Wine 100 has left the fine wine market cautiously optimistic at the start of 2016. The index closed 2015 above the low it established in June 2014 and Bordeaux’s market share is now back at levels seen in 2004 — before the China bull run and the sharp boom and bust in Bordeaux prices. While other financial markets are currently suffering turmoil on the back of concerns over Chinese economic growth, the fine wine market looks to have made a considerable step towards normalization, perhaps already having suffered the trauma of a China exit?

Article originally published on Liv-ex

Is The 1855 Bordeaux Classification Still Relevant Today?

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photo: Chateau Margaux

photo: Chateau Margaux

So many wines, so little time. With such variety available, we look to wine judges or writers to tell us which vinos stand out. Even in Roman times, Pliny the Elder wrote about regions or vineyards that produced superior wines. Today, gold medals and high point scores set wines apart.

This year is the 160th anniversary of the most famous and enduring effort to rank wines by quality: the 1855 Bordeaux ranking of classified growths, or Cru Classés, of the Médoc and Graves, the classic vineyards along the left bank of the Gironde River. Developed for the Paris Exposition of Napoleon III, the classification ranked Bordeaux’s most famous chateaux according to the price fetched by their wines.

So back then, at least, you got what you paid for.

Today, we still talk of the first growths: Châteaux Lafite-Rothschild, Latour, Margaux, Haut-Brion and Mouton-Rothschild (the last elevated from second to first growth in 1973, the only change in the official classification). There are 15 second growths, 14 third growths, 10 fourths and 18 fifths.

But how relevant is the 1855 classification today?

Continue reading: The Washington Post

Liv-ex Releases The 2015 Power 100

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ImageLiv-ex has released the tenth edition of the Liv-ex Power 100 – the annual list of the most powerful brands in the fine wine market.

Key findings this year:

  • Mouton Rothschild took the top spot in the 2015 table, following two years when the Bordeaux First Growths conceded first place to other wines. With good scores across all four categories, it was boosted by the value and volume of trade it saw on Liv-ex.
  • All Bordeaux First Growths, apart from Latour, rose up the table this year, with Mouton Rothschild, Haut Brion and Margaux seeing positive year-on-year price movements.
  • The highest new entrants this year were from Burgundy: the wines of Coche Dury entered the table at number 18, and Lambrays at number 59.
  • Sassicaia was the most traded wine by volume, and the only wine from outside Bordeaux to fall among the top ten wines traded by value.
  • California continues to be a rising star, with two wines from Napa Valley seeing the best year-on-year price performance: Scarecrow and Screaming Eagle. They rose 19.9% and 15.1% respectively, with Scarecrow making its debut in the list at number 83.
  • Angelus and Pavie continue to see the benefits of the 2012 St Emilion Re-Classification, coming in 4th and 5th.
  • Buyer diversification continues, with the variety of wines and vintages traded wider than ever before. 166 wines qualified for the ranking this year: an increase of 10% on 2014.

Continue reading: Liv-ex

Is The Price Of Rarity Justified?

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1509HK_Romanee-Conti-DRC-1971_1.5L_Lot-137As Burgundy’s prices continue to either stay high or get higher as top Bordeaux gets cheaper, how high is too high for Burgundy?

The fortunes of Burgundy since those of Bordeaux went south in early 2011 are well documented and the Liv-ex Burgundy 150 index is the best performing sub-index on the Fine Wine 1000 so far this year – up 2.1%.

It was recently reported that first Italy and then Champagne had replaced Burgundy as the most traded regions on Liv-ex behind Bordeaux, bumping Burgundy down to fourth place.

Strictly in terms of value however, Burgundy remains one of the top performers due in no small measure to the fabulous prices fetched by its particular jewel-in-the-crown, Domaine de la Romanée-Conti (DRC).

The consensus was broadly that most wines had hit their upper limit and that in fact DRC had some time ago and had been coasting for some years; its rarity and over-subscribed demand protecting it from a bubble a la Lafite.

The Burgundy 150 is dominated by DRC’s various labels (six of them), with wines from another 10 domaines (five white, five red) making up the rest.

Continue reading: The Drinks Business

‘Sale Of The Decade’ To End Sotheby’s Season

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Partial-view-of-the-“owc”-cellarSotheby’s will end its 2015 season with “one of the finest wine collections” it has offered in London “in over a decade”.

Taking place from 16-17 December, the sale will see just over 1,600 lots from the cellar of one collector offered and is expected to realize £1.9 million.

Bordeaux forms the core of the collection with lots spanning the vintages 1928 (a bottle of Pichon Comtesse de Lalande est. £320-400) to 2010, weighted towards first growths and ‘super seconds’ in a variety of formats.

There are lots of the 1961 vintage from no less than 28 different estates, likewise for the 1982 vintage; while the 1996 is available from 47 separate châteaux and the 2000 from 37.

 

Continue reading: The Drinks Business

Has The Fine Wine Market Balanced Out?

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6a00e55150c0be883401bb08916c32970d-800wiIn 2010, as the fine wine bull market neared its peak, Bordeaux accounted for 95.7% of trade by value on Liv-ex. It was the year of the 2009 En Primeur release, and that vintage alone accounted for 13.2% of trade. Other regions barely registered: Champagne, the second strongest, took just 1.2%.

Bordeaux trade has been in steady decline since then. Pushed out by unsustainably high prices, buyers sought value from other regions. The market shares of regions beyond Bordeaux have grown substantially since 2010, with Champagne, Italy and the Rest of the World particularly leaping ahead in 2015 to so far account for 6.1%, 6.9% and 4.6% respectively.

As shown above, Bordeaux’s current market share of 74.2% is now back to 2004 levels, before the bull market began. There is little doubt that the emergence of mainland Chinese demand led to a bubble in Bordeaux prices. When viewed purely in terms of market share, one could say that bubble is now well and truly behind us. Buyers have broadened their interests – and the market looks more balanced.

Original Source: Liv-ex Blog

Hopes High For “Magnificent” Bordeaux Vintage

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LafiteProducers in Bordeaux are gearing up for what they hope will be a “magnificent” 2015 vintage, with one winemaker describing it as a “euphoric bounce back from the difficulties of 2013”. Releasing a statement detailing its assessment of the 2015 vintage today, the Bordeaux Wine Council (CIVB) said “ideal weather conditions”, with a cool winter, warm and dry spring, followed by a dry and sunny September.

This made it possible for winemakers to wait until the grapes were perfectly ripe before starting the harvest, which began at the end of August for the regions dry whites and white crémants – a week ahead of last year.

“We’ve never seen such clean-looking, healthy white grapes as this year’s crop”, said Gavin Quinney, winemaker at Château Baudac. “That’s not to say that they’ll make the best wine we’ve made (we’ll have to see) but, every vintage until now, we’ve had a small team of trainees and wannabe winemakers who are put to work in the vines at last minute, trimming off any rot or blemished grapes. This year, there’s been nothing of the sort, so to speak.”

Harvesting for the whole region was in full swing by the first week of September.

Continue reading: The Drinks Business

Bordeaux 2015 Hype Continues To Grow

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53888565.ChateauLatourReports that Bordeaux may be on the cusp of a great vintage in 2015 have been strongly supported by one of the region’s leading negociants. Renaud Ruer, himself a winemaker in the past, concedes, however, that some appellations had better weather conditions than others and likens the harvest to a north-south divide rather than a Left or Right Bank year.

“I prefer to talk about north-south,” he said. “All the Sauternes had almost perfect conditions to welcome noble rot. Talking to Yquem, Sigalas-Rabaud, Coutet and Rayne Vigneau, they have all harvested fantastic rotten grapes. A good sign was the period of harvest – very early and consistently week after week.”

Further north in Graves, Ruer said he saw “perfect berries” at Pape-Clement, Malartic-Lagravieres abd Smith Haut Lafitte. “Haut Brion is very, very promising, and I can’t wait to taste their whites.”

In the Medoc, Margaux, the most southerly of the communes, could be the appellation that makes the best wine on the Left Bank in Ruer’s view. “What I heard from Palmer, Rauzan-Segla and Margaux itself sounds magic,” he declared.

“But St-Julien, Pauillac and St-Estephe, for once, could be the unlucky ones. Periods of rain were heavier there. Montrose, Calon Segur and Cos d’Estournel have something good but they know the conditions were not optimal.”

Continue reading: The Drinks Business

Bordeaux 2015 Harvest Is In The Books

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Mouton 2014The Bordeaux 2015 harvest is now complete – and expectations for the quality of the vintage are high. With the last of the Cabernets having been picked in Saint Emilion during the penultimate week of October, the Bordeaux 2015 harvest finally drew to a close. It seems a long time since the first bunches of Sauvignon were snipped from the vines in Pessac-Léognan at the end of August.

With the fermentations and macerations still in progress, it’s early days to pronounce on the quality of the wines but, even at this stage, it’s safe to say that the ’Bordeaux Rule of Five’ remains intact: every vintage ending in five or zero since 1985 has been excellent and that sequence carries on with 2015. Added to which, the less known rule that for Sauternes and sweet whites you can rely on the ’odd’ years since the turn of the century also stands firm. (I made this latter one up, in truth, but anything to encourage people to try a glass of Bordeaux’s most undervalued wine from ’05, ’07, ’09, ’11…) Meanwhile, the long unbroken run of good vintages for dry whites, arguably stretching back over the last decade, has carried on as well.

2015 may not be the ‘vintage of the century’ for the reds but it will certainly go down as an excellent year. As for the Rule of Five, the wines won’t quite be the same as 2000, 2005 and 2010, mainly because many of the better red wines in 2015 are destined to be more approachable sooner. There’s depth, colour, flavour, complexity and freshness but the structure and the tannins seem more supple, albeit right at the beginning of the life of the wine. And the vintage isn’t as full or as warmly generous as 2009, that other great vintage.

Continue reading: Liv-ex Blog

Fine Wine Drifts In October, Still In Positive Territory For Year

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6a00e55150c0be883401bb088ab19a970dTrading activity on the Liv-ex exchange reached its highest level since March but the Fine Wine 100 index went down 0.6%, following a flat August and September. Nonetheless, the index is still in positive territory on the year-to-date, up 0.7%.

Despite losing ground to Italy and Champagne recently, three Burgundian labels were among the month’s best performers: Domaine de la Romanée-Conti’s 2009 and 2010 La Tâche rising 6.2% and 13.4% respectively to over £20,000 a case each and Ponsot’s 2012 Clos de la Roche Vieilles Vignes was the month’s top mover up 23% to £3,937.

Also up were 2007 Yquem (7.3%) and 2010 Montrose which is back around the £1,600 a case mark – a barrier it appears to be struggling to break despite its ‘perfect’ Robert Parker score.

The month’s biggest losers were mainly Bordeaux: 2003 Margaux, 2009 Latour and 2000 Léoville Las Cases fell 4.9%, 4.9% and 5.7% respectively, while Opus One’s 2010 fell 6.2%.

If Burgundy dominated the top trades it also represented the biggest loss as well, Armand Rousseau’s 2012 Chambertin falling 11.6% to end the month at £9,555 per case.

The Liv-ex 1000 meanwhile sank 0.2% last month but, like the Fine Wine 100, still remains in positive territory so far this year.

Continue reading: The Drinks Business

Harvest 2015: Northern Rhône Winemakers Report A Very Promising Vintage

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GuigalAcross the Northern Hemisphere, winemakers in many regions are reporting one of the earlier grape harvests they’ve seen. They’re scrambling to pick fruit and find tank space.

France’s Northern Rhône Valley, where normally poker-faced vignerons are smiling from ear to ear. They report a growing season that was as hot as 2003 at times, but with cool nights and well-timed rains that produced very promising wines.

The Good News: 2015 looks like a vintage with serious potential.

The Bad News: So far, none. Even yields are in the normal range.

Promising Grapes: Syrah, Marsanne, Roussanne and Viognier all excelled.

Analysis: Early reports from winemakers throughout the Northern Rhône Valley indicate a potentially classic vintage. The growing season went without a hitch, late-seasons rains were well-timed and yields were in the normal range. Even producers not known for hyperbole wore cat-ate-the-canary grins as they finished picking grapes.

Continue reading: Wine Spectator

 

Wines Under Threat As Bordeaux Hit By Rising Temperatures

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afpwine18f-1-webThis summer was a scorcher in France, the second hottest on record. For Bordeaux wine growers, those searing temperatures were the latest reminder that global warming is threatening to upend their world.

In a vineyard on the outskirts of the world’s wine capital, Agnes Destrac, a researcher with France’s National Institute for Agricultural Research, points to shriveled merlot grapes, left to linger on the vine well past harvest time to simulate the effects of rising temperatures.

“You have to keep in mind the limits of the grape,” Destrac said. “We’re not going to keep merlot no matter what.”

A few years ago, such talk would have been heresy in a place where merlot vines cover more than 60 percent of the red- wine area. But now Destrac is at the forefront of a race to hunt for grapes that can better withstand heat, helping Bordeaux’s $4.2 billion wine industry adapt to a hotter world.

Merlot is Bordeaux’s earliest-ripening red, and its character would change if a warmer climate meant fully ripe berries in August rather than September, said Bernard Farges, a winemaker and president of the Conseil Interprofessionel du Vin de Bordeaux, the local wine board.

Continue reading: Chicago Tribune

Bordeaux 2009 & 2010: Equal, Yet Unequal?

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MontroseA number of Bordeaux estates hold exactly the same score for their 2009 and 2010 vintages yet the pricing for both is rarely equal. Liv-ex recently pointed out the price disparity between the ’09 and ’10 vintages of Château Montrose where, despite both having 100-points from The Wine Advocate, the 2009 remains 12% more expensive than the 2010.

However, it would appear this is a situation not unique to Montrose. Liv-ex has dug a little deeper and found 22 estates where both the ‘09 and ‘10 vintages have the same score from The Wine Advocate but where the price has swung in favor of one or other of those vintages, sometimes quite dramatically.

The full list can be seen below and Liv-ex adds that a 5% swing either way is a reasonable variation and half the wines on the list exhibit this sort of volatility.

Nonetheless, there remain eight wines where the disparity is far more than 5% in favor of either the ‘09 or ‘10.

Continue reading: The Drinks Business

Château Margaux 1900-2010 Direct From The Cellars: A Celebration of the Mentzelopoulos Era

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Margaux AuctionOn 17 October 2015 in New York, Sotheby’s Wine will present Château Margaux 1900-2010 Direct From The Cellars: A Celebration of the Mentzelopoulos Era.

This is the first time the historic First Growth has made a significant offering of wines direct from their cellars at auction. With a glittering history that has drawn admirers from Thomas Jefferson to Ernest Hemmingway to Chinese leader Hu Jintao, as well as a new generation of collectors from the Americas and Asia, Margaux is regarded as unique for the magnificence of both its wine and architecture. The sale is made up of 239 lots – ranging from a bottle of 1900 to a balthazar of 2009 – and is estimated at $1-1.4 million.

Click here for complete auction details.

Lesser-Known Bordeaux On The Move

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why_wineFirst growth prices have fallen 39% since the market peaked in 2011. The last year has seen some recovery, with the Fine Wine 50 index rising 0.94%, yet it is undeniable that the headline numbers are negative. But are the first growths an accurate representation of the whole Bordeaux market?

The Right Bank 100 has been the star performer since the market peaked, climbing 7.6% over this time. There is a clear divide in the performance of the ten individual wines: five have risen, and five have fallen. The top performer is Angelus, which has rocketed 35.5% since July 2011. It was boosted by its promotion to Premier Grand Cru Classé A in the September 2012 St Emilion reclassification, while fellow promoted wine Pavie has risen 17.3%. Clos Fourtet, with a 33.8% gain, is the second best performer, having seen trade invigorated in recent years by the 100 points awarded to its 2009 vintage, and Parker’s description of the wine as “one of the greatest young Bordeaux I have ever tasted”.

The Bordeaux 500 as a whole has fallen by 20.2% during this time and the Right Bank 100 has been the only index to see a gain. If it had fallen at the same rate as the Left Bank 200 – and perhaps if Angelus and Pavie had not been promoted – then the Bordeaux 500 would now be down 23.1%.

Nonetheless, the impact of the promotion has slowed. Following 13 consecutive monthly rises throughout 2012-2013, the Right Bank 100’s growth has stagnated, and the second, third, fourth and fifth growths from the other side of the Gironde have outperformed it.

Continue reading: The Drinks Business

Bordeaux On Track For Best Vintage Since 2010

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Château Cheval Blanc

Château Cheval Blanc

The rain that fell over much of the Bordeaux region last weekend appears to have been too little and too late to spoil what is being predicted by many Bordelais to be the best vintage since 2010. It is still too early to make a definitive assessment, and parts of the Médoc received unwanted heavy rain in the second week of September, but weather conditions have been near-perfect elsewhere, notably on the Right Bank, where Cheval Blanc have already finished picking all their grapes. According to their technical director, Pierre-Olivier Clouet, this is going to be an incredible vintage.

A wide diurnal range has also been highly beneficial this year, with cool nights, even in August, ensuring that pH levels are low. Small berries have brought “amazing concentration”, in Clouet’s words. Overt tannins (‘croquant’ or crispy ones), deep colour, fragrant aromas, vivid acidity and around 14% abv have helped provide ‘everything you need’ in Clouet’s view. Cheval Blanc’s yield of 38.7hl/ha for their Merlot and 36.1 for their Cabernet Franc is also up on their average.

Continue reading: The Drinks Business

Liv-ex 100 runs flat in September

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6a00e55150c0be883401b7c7d7031c970bThe Liv-ex 100 Index ran flat in September, closing on 241.65 (0.00%). It is up 1.3% year to date. The Liv-ex Fine Wine 50 also ran flat, closing the month on 269.04 (-0.03%).

This month’s top mover comes from Champagne: Cristal 2004 gained 8.0%. Champagne has seen high levels of activity on the Exchange in recent months: in September, the region accounted for 10.7% of all trade by value as a number of new vintages entered the market. Lynch Bages 2000 also featured among the top movers – and the Chateau was the most traded label outside of the First Growths in September.

Read more: Liv-ex Blog

Sotheby’s First ‘White Glove’ Sale Nets £1 million

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Petrus 2000Auction house Sotheby’s held its first ever “white glove” auction in London earlier this month, making over £1 million. Featuring the collection from a single-owner, the sale is referred to as “white glove” because it was 100% sold by both lot and value.

Stephen Mould, head of wine for Sotheby’s Europe said: “Today’s sale was a landmark auction for Sotheby’s – our first-ever ‘white-glove’ wine sale in London. This single-owner sale, comprising a superb collection of Bordeaux, demonstrated once again the importance of perfect provenance.

“There was strong bidding from the UK, Europe and Asia, with buyers eager to secure wines from vintages from 1989 to 2007. The bumper series of autumn wine sales at Sotheby’s promises to be one of our best, as we now look forward to this season’s auctions in Hong Kong, New York and London.”

The sale’s top lots were dominated by Petrus, a case of the 2000 making £30,550 and taking the top spot.

Other Petrus vintages in case and imperial that appeared in the top 10 included the 2001, 2003, 2004, 2006 and 2007.

A case of 1989 Haut-Brion made £10,810, a case of 2000 Lafite £10,340 and a dozen bottles of 2000 Cheval Blanc £6,815.

Source: The Drinks Business

Bordeaux First Growths: Haut Brion On The Move

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6a00e55150c0be883401b8d1597610970cThroughout the China-led bull market, Lafite Rothschild dominated trade on the Exchange: during one week in July 2010 the Chateau represented 48% – nearly half – of all trading activity by value. Prices were flying and in November 2010 Lafite commanded an average of a 130% premium over other First Growths in the secondary market. At that time Lafite 2008, which was released with the Chinese number eight – a symbol of good fortune – etched onto the bottle, was trading for as high as £14,450 per 12×75.

As the chart above shows, activity for Lafite has been declining. Last week, it accounted for just 4% of trade on the market. The Lafite index (composed of the latest 10 physical vintages) has fallen 47% since the peak of the market in July 2011 and its premium on the other Premier Cru has been sliding. Lafite 2008 last traded for £4,900, a 65% drop.

Lafite has not always commanded the highest prices: at the beginning of the 20th century, Haut Brion traded at a 20% premium over other First Growths. In the late 90s, Margaux was the most expensive. Are we beginning to see another shift?

Continue reading: Liv-ex Blog

Graham Lyons Cellar Sale Complete

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ZachysThe final part of Graham Lyons’ fine wine collection was 100% sold by Zachys in Hong Kong last week and realized over HK$31 million.

Offered on 11 September the third and final part of Lyons’ collection made over twice its pre-sale estimate with buyers “leaping” at the chance to buy top fine wines from around the world.

Particular highlights included: a Jeroboam of 1961 Haut-Brion which made HK$343,000, three magnums of 1971 Domaine de la Romanée-Conti Romanée-Conti which realised HK$1.2m, a magnum of 1874 Lafite which went for HK$196,000, six bottles of 1929 Yquem going for HK$232,750 and a bottle of 1792 Blandy’s Madeira realizing HK$58,800.

Jeff Zacharia, president of Zachys, commented, “The third installment of the Graham Lyons Cellar exceeded all expectations, and our expectations were high. From Bordeaux and Burgundy, to wine regions less seen at auction, bidders internationally realized that this auction was a once-in-a-lifetime opportunity, and the prices realized reflect that.”

Continue reading: The Drinks Business

Will 2015 Be A Legendary Bordeaux Vintage?

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53888565.ChateauLatourShould dry, sunny conditions remain in Bordeaux, this year’s vintage could be an exceptional harvest – as good as the legendary 1982, according to Baron Philippe de Rothschild MD Philippe Dhalluin.

Weather during 2015 has already ensured that this year will be a “good vintage”, and, as long as a forecast for continued dry and sunny conditions is correct, then it could be an “exceptional” year.

“So far, so good… but we need nice weather now until the end of the harvest [2-3 weeks], but we don’t need high temperatures because we have a good level of ripeness now,” he began, adding that the weather forecast for the next two weeks in Bordeaux is “very good”.

Continuing, he said, “What I really believe, and I could be wrong, is that we have a good vintage – that is done. I was tasting berries at Mouton on Friday, and in certain places, they are mature, and one thinks, ‘why wait, it is perfect.’”

“But,” he added, “Will it be a very good or an exceptional vintage? – that I don’t know.”

Continue reading: The Drinks Business

Related: Liv-ex | Bordeaux 2015 Harvest Update

Fine Wine Holds Steady In August

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livexThe Liv-ex 100 index gained 0.09% in August to close on 241.64, regaining some of the ground lost last month. The Liv-ex Fine Wine 50 also edged up, gaining 0.2%.

This month’s top performing wines from within the index come from a number of regions – and the top riser was once again from Burgundy. Pape Clement 2010, which Liv-ex recently highlighted as the second cheapest 100-point Bordeaux wine available, also performed well.

Although Italy has edged ahead of Burgundy as the second most traded region, prices for some of its wines struggled to hold: two Italian wines were among the worst performers. Mission Haut Brion 2005 – recently upgraded to 100 points by Robert Parker – also dipped after failing to maintain the heights reached after its recent price surge.

Continue reading: Liv-ex

Bordeaux 2015: White Wine Harvest To Begin Next Week

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wwslider3Chateau Haut-Brion said it was likely to begin its Bordeaux 2015 harvest for Sauvignon Blanc and Sauvignon Gris at the end of next week, but a final decision was yet to be taken.
A summer heatwave is expected to cause a relatively early wine harvest across many northern hemisphere regions in 2015, from Piedmont and Rioja to Napa Valley in California and British Columbia in Canada.

Bordeaux’s wine bureau (CIVB) said the first red grapes should be harvested in mid-September. Around 6,500 seasonal pickers will begin arriving in the area over the next few weeks.

Grapes in many Bordeaux vineyards have finished their veraison – the color change process – and maturity was well advanced for Sauvignon Blanc, Colombard, Merlot and Cabernet Franc, according to the regional Chamber of Agriculture.

Later ripening Semillon and Cabernet Sauvignon were mid-way through color change.

Continue reading: Decanter

Rare Selections of Burgundy and Bordeaux Up For Auction in September

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ZachysThe third and final sale from the cellar of Graham Lyons has been announced. Lyons is known internationally for his meticulous collecting and with particular focus on some of the rarest collections of Burgundy and Bordeaux in existence.

Entitled: “A London Gentleman’s Cellar: Historic Wines from the Collection of Graham Lyons Part III – The Final Offering” the sale is described by the auction house as “the highlight of the fall international auction season” and will be held at the Mandarin Oriental on 11 September.

Anais Marmonier, Zachys Asia marketing manager said, “The real star of the show is provenance. With few exceptions, every lot in the sale can be traced back via Mr. Lyons’ meticulous handwritten notes to either well-known European merchants, the nascent days of wine auctions with Mr. Michael Broadbent himself at the helm or, in many instances, the châteaux themselves.

“What is also interesting is that the Graham Lyons auction catalogue will stand as a benchmark for the fine wines of all of the great collection regions: Champagne, Bordeaux, Burgundy, the Rhône Valley, and even Germany, Spain, Hungary and as rare as Crimea.”

Particular auction highlights include: A jeroboam of 1961 Château Haut-Brion (estimated between HK$ 120,000-200,000) sourced directly from Château Haut Brion, three magnums of 1971 Romanée-Conti (estimated between HK$ 550,000-550,800) from Adnam’s on 19 October 1975 and 12 bottles of 1964 Barbaresco Santo Stefano di Neive Riserva Speciale from Giacosa (estimated HK$ 190,000-280,000) from Christie’s in London on 29 July 1982 and sourced directly from the Domaine.

Continue reading: The Drinks Business

Is Pape Clement One of the Most Undervalued Wines in the 2012 Bordeaux Vintage?

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pape_clementRated in the top five wines of the vintage by Robert Parker this May with 97-points, he labelled the Pape Clement an “iconic” example from the estate in what is quickly becoming apparently the most under-appreciated vintage from Bordeaux since the 2008s.

As Liv-ex has noted, its upgrade to 97-points from 92-95 and Parker’s fulsome praise did much to boost the wine when it became physical in April.

Having slumped to £400 ($627) a case at that point it rose in the space of just a month to a new high of £550 ($862) – up 38%.

Read on: The Drinks Business

Italian Regions More Traded Than Burgundy

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bordeauxItaly’s regions have leap-frogged Burgundy to become the second most widely traded fine wines on Liv-ex so far this year.

Bordeaux still accounts for the lion’s share of trade every month although it has seen its piece of the fine wine pie shrink from over 95% to 73% over the last five years.

Burgundy was the next biggest category, particularly in value thanks to the big bucks labels such as Domaine de la Romanée-Conti and Henri Jayer are able to command.

A close third was Italy – with a heavy slant towards the Super Tuscans – but as Burgundy’s price continues to reach its upper limit, the more affordable and liquid Italian wines have gained ground and so far this year have accounted for 7% of all activity to Burgundy’s 6.7%.

Read on: The Drinks Business

Is Now the Time to Buy a Case of Château Lafite?

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LafiteIn 2011, Château Lafite Rothschild’s wines were riding high, the darlings of Chinese buyers and the auction market.

The futures price in London for the great 2010 vintage, released in July 2011, created shock waves. But it was priced at £12,000 a case (then $19,400) … and the wine hadn’t even been bottled yet. Almost immediately that price began to slip, and it’s been declining ever since. Last month, Liv-ex reported that a case of the 2010 had traded for £5,390 ($8,350), nearly 55 percent less than it cost four years ago.

The tale of 2010 Lafite shows what happens when a wine achieves cult status and then dips in fashion.

Lafite has always had a distinct mystique. In the now famous 1855 classification that ranked Bordeaux châteaux from fifth to first growths, it was named the first of the first growths. It’s Bordeaux’s most famous property, its wines the most elegant, with more finesse than power.

But that didn’t translate into astronomical prices until Chinese millionaires and billionaires caught the fever in about 2006, amassing huge stashes in their cellars.

Read on: Bloomberg Business

Vieux Chateau Certan 2010 Climbs to 18-Month Liv-Ex High

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Vieux Chateau Certan Pomerol A 12-bottle case of 2010 wine from Vieux Chateau Certan, an estate in the Pomerol region of Bordeaux, sold for 2,111 pounds ($3,300) on the Liv-ex wine market in the past week, the vintage’s highest level in 18 months.

The transaction came as investor and collector attention has switched from some of the Medoc first-growth labels in recent months in search of value elsewhere in Bordeaux or other regions. The sale is the most that the wine has garnered since two six-bottle cases went for 2,200 pounds in January 2014.

Wine buyers are still looking for signs of stability in the market after a turbulent seven years, sparked first by the 2008 financial crisis, then a bull market led by Asian demand for Chateau Lafite Rothschild, and more recently a selloff driven by China’s crackdown on lavish gift-giving. High prices for 2010 Bordeaux wine discouraged buyers in the U.S. and U.K. while lesser 2011 to 2013 vintages proved hard to sell.

Bordeaux’s “average monthly share is 74.2 percent so far this year compared to 79 percent in 2014,” Liv-ex’s latest monthly Cellar Watch report said of trading on the exchange. “Back in 2010 it took 95.2 percent.”

Continue reading: Bloomberg Business

Liv-ex Updates Indices

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6a00e55150c0be883401bb0862ed6f970dLiv-ex the fine wine marketplace has announced a number of updates to its various indices that track the world’s fine wine labels.

The majority of the changes affect the Fine Wine 100 which tracks the 100 most widely traded wines on the secondary market.

Its components are revised annually to reflect trends in the market, two years ago it was broadened to include more non-Bordeaux wines for example.

Wines that have been removed from the index as of last month are: 2008 Haut-Brion, 2003 Mouton Rothschild, 2002 Cristal, 2010 Armand Rousseau, Chambertin Clos de Beze, 2011 Ponsot, Clos Roche Vieilles Vignes and 2009 Jaboulet, Hermitage Chapelle.

Continue Reading: The Drinks Business | Liv-ex Blog

Lafite 2010 Falls to Lowest This year on Liv-ex Market

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LafiteSix bottles of Chateau Lafite Rothschild 2010 wine sold for 2,550 pounds ($3,990) on the London-based Liv-ex wine market this week, taking the vintage to its lowest level this year as demand remained weak for top Bordeaux labels.

The sale, equal to 425 pounds a bottle, took the wine closer to the record low touched last December, when six bottles sold for 2,300 pounds, or 383 pounds a bottle, according to data on Liv-ex’s Cellar Watch website.

Lafite reached 12,500 pounds a case when it was first sold on Liv-ex in June 2011, tumbled below 8,000 pounds in September 2012 and hasn’t traded above 6,000 pounds since June last year. A two percent drop from current levels would take it below 5,000 pounds.

The 2010 vintage was given a 98-point rating by U.S. critic Robert Parker in February 2013, putting it among the top five of the past 15 years on his 100-point scale, according to the eRobertParker.com website.

Continue Reading: Bloomberg Business

Bordeaux Liv-Ex Wine Market Trade Share Drops From 2014

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Liv-ex_FWM_LBordeaux’s share of trade on the Liv-ex online wine market has fallen to a monthly average of 74 percent so far this year from 79 percent in 2014, according to the London-based exchange’s latest Cellar Watch market report.

In 2010, as Chinese demand was driving a bull market in top wines from the region, the share was as high as 95 percent.

The wine market has come through a turbulent seven years, sparked by the 2008 financial crisis and then a selloff driven in part by China’s crackdown on lavish gift-giving. High prices for the critically acclaimed 2009 and 2010 Bordeaux vintages discouraged buyers in the U.S. and U.K., while lesser vintages between 2011 and 2013 proved hard to sell.

 “After its trade share plummeted to an all time low of 65.5 percent in June, Bordeaux accounted for 75.2 percent in July,” Liv-ex said. “First growth share held steady,” with the five top left-bank wine estates representing 31 percent of Bordeaux activity and Chateau Mouton Rothschild trading the most.

Within Bordeaux, trading in the 2005 vintage dropped back in July after peaking in June amid a surge of investor interest, as U.S. critic Robert Parker published revised scores for those wines. Trading volume shifted more towards the 2010 vintage during July, according to the Cellar Watch report.

Continue reading: Bloomberg Business

China Finally Agrees to Give Bordeaux Respect

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corks3There is cause for celebration among the top wine producers in the prestigious Bordeaux region of France, a tract that many collectors, investors and oenophiles agree produces the finest, most exquisite and certainly the most desired wines among all its competitors.  Why?  China, a huge player in the all-important, tremendously influential Asian wine market, has, after many years of discussion (plus a few more laden with pressure from the Bordelais) agreed to grant Bordeaux the status of a registered Geographical Indication, or GI.  The decision finally came after months of analysis by the Chinese  General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).  Officials from the AQSIQ are expected to recognize 45 Bordeaux appellations within the next two months, inspiring a strong sigh of relief among the Bordelais.

To many, this may sound like a lot of legalese mumbo-jumbo with little to no importance to the consumer; however, if you are connected to a chateau in this globally revered Gallic region, or are involved in the sale of these fine wines to China, the decision carries exactly the kind of protection needed to prevent counterfeit or fraudulent products from being sold under the distinguished Bordeaux name.

So what exactly is Geographical Indication status?  No, it has nothing to do with maps, apps or GPSs. The short answer is that it’s a sign used on a product from a specific geographic origin to define its unique region-of-origin-related qualities and / or reputation.  (Think Roquefort Cheese or Nepalese Tea.)  It also stops the sale of products which don’t meet the quality standards the region requires to be sold under its brand or moniker. While lots of items qualify for GI status, i.e. agricultural goods, foods, handcrafted wares and even industrial products, fine, investment grade wine has been particularly vulnerable without it.  Forgery in the Chinese market has concerned the Bordelais for years – fraudulent, locally- made “Bordeaux” have easily infiltrated and tainted the market due to the lack of wine knowledge of the average customs inspector.  This welcomed decision by China to grant Bordeaux GI status, a mission for the French since 2011, will hopefully give the region’s esteemed chateaux a legal leg to stand on should such activity continue.

Unlike Hong Kong, where tight regulations and a proactive anti-fraud initiative within the customs offices are alive and well, speculation suggests widespread fraud exists in the People’s Republic, particularly within Changli County, ironically nicknamed the Bordeaux of China. Clever and confusing labels such as “Château Margot” and “Chatreal Latour, Bordeaux” have run rampant, sparking monumental migraines among the Bordelais; these inferior fakes – which, surprisingly, couldn’t even be called counterfeit before the Bordeaux GI status designation was approved – compromised a respected reputation for quality wine production that has been carefully and painstakingly cultivated for centuries. As one would expect, it was only a matter of time before Bordeaux suffered a financial hit as well.

Aside from the win for the Bordelais, the decision to grant Bordeaux GI status will also benefit China-based wine investors and consumers. Before the designation, under-informed buyers ran the risk of being taken for the proverbial ride, which could easily translate into poor investments and major financial losses. Now, earnest buyers and investors can purchase Bordeaux with an elevated sense of security, knowing that what’s on the label is also in the bottle.

In tandem with these developments, it’s important to note that China is kicking up its own wine production capabilities. The Xinjian region is especially prolific, and may soon be lobbying for its own registered appellations. Fasten your seatbelts, as an East vs. West vinicultural showdown may very well be on the horizon.

Interest in Bordeaux 2010 Vintage Growing

Posted by & filed under Latest from Westgarth.

Haut-BrionIn the build-up to and immediately after Robert Parker’s 10-year retrospective, the 2005s were all the rage, prices rose, trade went up but, like cherry blossom, the attention was brief.

After a week those highly-rated wines had traded as much as they were going to and those tipped for success that fell short quickly saw interest drop away as well. Over the course of the month when it was in the eye of the storm trade in the vintage dropped from a high of 23.4% share of trade to just 9.2%.

Liv-ex reports that trade in the 2009s has remained steady but the space left by declining interest in the 2005s has given the 2010s room to manoeuvre.

In July the vintage took 18.2% of the share of the trade in Bordeaux with Pontet-Canet and La Mission Haut-Brion in particular seeing “high activity”. The five most traded 2010s last month were: Pontet-Canet, Duhart Milon, Palmer, La Mission and Margaux.

The 2010s represented a new peak for Bordeaux release prices when they came out in 2011 but they appeared in a market that was already beginning to falter and prices immediately suffered in the secondary market.

Prices have been declining steadily for the last four years – as has the wider market – but the signs are now that most of the wines have found their bottom.

 

Continue reading: The Drinks Business

Half Of 100-Point Wines Under £5,000…Time To Buy?

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100-point-BordeauxOver half of the 49 Bordeaux wines given a “perfect” 100-point score by Robert Parker since 2000 are currently trading below £5,000 a case ($7811).

A stark reminder of far off its peak the Bordeaux market currently is, 29 100-point wines from both banks of the Gironde are currently below £5,000 p/cs of 12, in fact all are below £4,500 p/cs and 12 of them below £2,000 p/cs.

As compiled by Liv-ex, the list has slightly more Right Bank wines on it than Left Banks with 17 to the latter’s 12. However all of the vintages are 2005, 2009 and 2010 – with the exception of the 2000 vintages from La Mission Haut-Brion and Pavie.

This chimes well with Liv-ex’s previous reports that several of La Mission’s vintages are currently at a level well below what their scores suggest they should or could be and that Pavie – which like La Mission has three wines on the list – is more of a “second growth” price-wise and not quite on the level of fellow Saint Emilion cru classé “A” Angélus (which has just one wine on the list, the 2005).

Bellevue Mondotte, Beauséjour Duffau, Ponet-Canet and Montrose all have two wines on the list, usually their 2009/2010 vintages but also the 2005/2009 in the case of Bellevue Mondotte.

As to why the wines on the list are all from just three vintages the answer is simple.

Continue reading: The Drinks Business

‘Landmark’ Château Margaux Auction To Be Held In New York

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margauxSotheby’s is set to hold a ‘landmark’ auction of wines from Château Margaux in New York, the first significant sale of wines from the property’s own cellars.

239 lots, worth an estimated US$1-1.4m will be offered at the auction on October 17th. Included in the auction are single bottles from the celebrated 1900 and 1945 vintages, as well as vertical lots marking the ownership of the Mentzelopoulos family since 1978.

Highlights of the sale include:
• One bottle of Margaux 1900 (estimate $10,000-15,000)
• One bottle of Margaux 1945 (est $3,000-4,000)
• One bottle of Margaux 1953 (est $2,000-2,800)
• Vertical 10-bottle and -magnum lots covering the 2000s, 1990s and 1980s
• Vertical 35-bottle and -magnum lots covering the Mentzelopoulos era (1978-2012)

Related Link: Decanter

Robert Parker Gives 10 Year Retrospective Of 2005 Bordeaux Vintage

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Robert ParkerTwelve wines have been given “perfect” 100-point ratings in Robert Parker’s 10-year retrospective of the 2005 Bordeaux vintage. The vintage now has the second largest number of 100 point wines, behind the 2009s which have 19 in total.

None of the wines are from the Médoc, eight are from Saint Emilion, two from Pomerol and two from Pessac Léognan.

“This vintage looks strong and impressive at age 10. I do believe it is eclipsed in quality and consistency by both the 2009s and 2010s, but only by a relatively minor margin,” said Parker.

As well as Bordeaux, Parker also re-tasted the 2005 Napas and he recommended that these “stunning” wines now be “included with the other great vintages of the first decade of the 21st century, 2001, 2002 and 2007 – it is that special.”

Related Link: The Drinks Business

Understanding the Bordeaux 1855 Classifications

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photo: Chateau Margaux

photo: Chateau Margaux

The 1855 classification identified the top 61 chateaux in the Medoc region. The only chateau that was included in the classification but was not in the Medoc was Chateau Haut-Brion in Graves

First Growths

Chateau Lafite-Rothschild (Pauillac)
Chateau Margaux (Margaux)
Chateau Latour (Pauillac)
Chateau Haut-Brion Pessac ( Graves)
Chateau Mouton-Rothschild (Pauillac)

Second Growths
Chateau Rauson-Seglo (Margaux)
Chateau Rauzan-Gassies (Margaux)
Chateau Leoville-Las Cases (Saint-Julien)
Chateau Leoville-Poyferre (Saint-Julien)
Chateau Leoville-Barton (Saint-Julien)
Chateau Durfort-Vivens (Margaux)
Chateau Gruaud-Larose (Saint-Julien)
Chateau Lascombes (Margaux)
Chateau Brane-Cantenac Cantenac (Margaux)
Chateau Pichon-Longueville-Baron (Pauillac)
Chateau Pichon-Longueville, Comtesse de Lalande (Pauillac)
Chateau Ducru-Beaucaillou (Saint-Julien)
Chateau Cos d’Estournel (Saint-Estephe)
Chateau Montrose (Saint-Estephe)

Third Growths
Chateau Kirwan Cantenac (Margaux)
Chateau d’Issan Cantenac (Margaux)
Chateau Lagrange (Saint-Julien)
Chateau Langoa-Barton (Saint-Julien)
Chateau Giscours Labarde (Margaux)
Chateau Malescot Saint-Exupery (Margaux)
Chateau Boyd-Cantenac Cantenac (Margaux)
Chateau Cantenac-Brown Cantenac (Margaux)
Chateau Palmer Cantenac (Margaux)
Chateau La Lagune Ludon (Haut-Medoc)
Chateau Desmirail (Margaux)
Chateau Calon-Segur (Saint-Estephe)
Chateau Ferriere (Margaux)
Chateau Marquis d’Alesme-Becker (Margaux)

Fourth Growths
Chateau Saint-Pierre (Saint-Julien)
Chateau Talbot (Saint-Julien)
Chateau Branaire-Ducru (Saint-Julien)
Chateau Duhart-Milon-Rothschild (Pauillac)
Chateau Pouget Cantenac (Margaux)
Chateau La Tour-Carnet Saint-Laurent (Haut Medoc)
Chateau Lafon-Rochet (Saint-Estephe)
Chateau Beychevelle (Saint-Julien)
Chateau Prieure-Lichine Cantenac (Margaux)
Chateau Marquis-de-Terme (Margaux)

Fifth Growths
Chateau Pontet-Canet (Pauillac)
Chateau Batailley (Pauillac)
Chateau Haut-Batailley (Pauillac)
Chateau Grand-Puy-Lacoste (Pauillac)
Chateau Grand-Puy-Ducasse (Pauillac)
Chateau Lynch-Bages (Pauillac)
Chateau Lynch-Moussas (Pauillac)
Chateau Dauzac Labarde (Margaux)
Chateau Mouton-Baronne-Philippe (Pauillac)
Chateau du Tertre Arsac (Margaux)
Chateau Haut-Bages-Liberal (Pauillac)
Chateau Pedesclaux (Pauillac)
Chateau Belgrave Saint-Laurent (Haut-Medoc)
Chateau de Camensac Saint-Laurent (Haut-Medoc)
Chateau Cos-Labory (Saint-Estephe)
Chateau Clerc-Milon (Pauillac)
Chateau Croizet-Bages (Pauillac)
Chateau Cantemerle Macau (Haut-Medoc)

Related Link: Decanter

Liv-ex Fine Wine 100 Index Grows In June

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6a00e55150c0be883401bb084bd329970d-580wiThe Liv-ex Fine Wine 100 gained 0.9% in June to close on 244.08. This puts it up 3.4% on the level of June 2014, bringing it back into positive territory over a one year period for the first time since November 2013.

The Liv-ex Fine Wine 50 also gained for the fourth consecutive month. It closed on 272.04, up 0.7% on May’s close.

Related Link: Decanter / Liv-Ex

Is The Bordeaux 2015 Vintage Showing Early Signs Of Greatness?

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wwslider3Chateau owners in Medoc say the Bordeaux 2015 vintage has got off to a good start following excellent flowering conditions in the vineyard, despite some concerns over recent rain, putting chateaux owners in an optimistic mood, with several describing conditions as ‘perfect’.

‘There is still a long way to go, but we have nice, big bunches and that means there is good potential for quantity,’ said Philippe Dhalluin, of first growth Chateau Mouton Rothschild in Pauillac.

The character and quality of the Bordeaux 2015 vintage can still be determined in the next three months.

Related Link: Decanter

2014 Bordeaux Sales Being Driven By American Buyers

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Mouton 2014 North American collectors bought 70 percent of Bordeaux 2014 wine futures transacted this year through Sotheby’s Wine as the amount sold rebounded from the previous two vintages to climb back close to volumes achieved in 2011.

Bordeaux 2014 sales were 90 percent higher than the 2013 vintage and 80 percent above the 2012 campaign, according to Sotheby’s. Sales were still 10 percent below those for the 2011 vintage.

The 2014 vintage followed two difficult years of weather in the region and marked a return to more normal conditions both in the vineyards and in the global wine market. While 2014 prices in Bordeaux were generally above those predicted by merchants, according to Liv-ex, growers said improved quality relative to 2013 and 2012 helped make 2014 wines more expensive.

Related Link: Bloomberg Business

2014 En Primeur Campaign Effectively Over With Château Montrose Release

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MontroseOne of the last wines to be released is from Château Montrose. Universally acknowledged as one of the best wines of the vintage, the question is if Montrose is worth a 54% price hike. At a little over $1300 (£850) a case on average it’s certainly at a substantial premium to the majority of its back vintages from the last 10 years and almost as expensive as the current price of the 2005.

Neal Martin gave it 95-97 points. “Dare I say, this is one grand vin that comes perilously close to matching the heights of the 2009 and 2010. This is a brilliant Montrose, one of the best you will find on the Left Bank this vintage.”

The 2014 campaign is effectively over with Petrus and Le Pin two of the last to be offered.

Related link: The Drinks Business

Liv-ex May Recap

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Liv-ex MayMay kept most of the industry’s focus on the En Primeur campaigns, but trading continued on the Liv-ex Fine Wine 100 and the Liv-ex Fine Wine 50. Both ran mostly flat for the month with the Fine Wine 100 drifting down 0.06% and the Fine Wine 50 gaining only 0.08%.

Lafite Rothschild 2003 and Haut Brion 2010 topped the table, gaining 6.6% and 5.4% respectively. Both are scored 100 points from Robert Parker. Margaux 2005 also performed well ahead of Parker’s retrospective of the vintage due at the end of June.

Related Link: Liv-ex Blog

Back Vintages Stealing Spotlight From Bordeaux 2014?

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Haut-BrionAs prices are announced for the 2014 Bordeaux vintage, older vintages are taking some of the spotlight away. Back vintages are standing out as a real value, particularly those predating the high-quality 2009 and 2010 crops. Many industry veterans feel the more mature vintages are where the greater value is to be found, and as for Bordeaux 2014, the general consensus is that it has become noticeable for how unnoticeable it is.

Most top Bordeaux 2014 releases tracked by the Liv-ex market have shown increases in price relative to the 2013 vintage, reflecting higher critical ratings for the more-recent crop. Merchants for Bordeaux estates currently have a large stock overhang of the 2011-2013 vintages.

Related Link: Bloomberg Business

Bordeaux Prices Drop, But Are U.S. Buyers Buying?

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BordeauxThe strong U.S. dollar means 2014 Bordeaux futures cost less which is one of the reasons that many Bordeaux wineries had hoped this year’s en primeurs campaign would be successful in drawing Americans back. Unfortunately, most consumers aren’t buying, even with the 2014 vintage being considered the best in four years.

Until recently, the en primeur campaigns offered wine lovers the best option for getting allocations of top Bordeauxs at decent pricing with the idea that passing on the futures might make it difficult to secure the wine later. That is no longer the situation of the market.

So who does buy first-growth futures in the U.S. these days? Click here to read more at Wine Spectator.

Sotheby’s NY ‘Greatest Burgundy Collection Ever’ Auction Fetches Over $8.4 Million

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drcBurgundy was the guest of honor at Sotheby’s most lucrative New York wine auction in 15 years. The sale of the Don Stott Cellar brought in collectors from Hong Kong, Brazil, Mexico, Canada and from all across the US helping to push the total of proceeds from the auction to over $8.4 million, some 22% above the high estimate projections.

Highest price of the sale was $58,188, paid by an Asian private collector for a case of DRC Montrachet 1973.

Further recap of the auction can be found here: Decanter

Bordeaux 2014 Releases Continue

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chateau-margaux-640x480

There is clearly an appetite for Bordeaux. But, customers are much savvier as to what everything is worth these days. Over the past few years Bordeaux has alienated their client base in the UK. This vintage is an opportunity to re-engage. Drinkers want Bordeaux in their cellars. They want to fall back in love with Bordeaux. – Joss Fowler, Fine & Rare

Another 1855 First Growth Bordeaux was released, this time by Chateau Margaux. This year’s en primeur campaign has failed to capitalize on the early momentum from Mouton Rothschild and Lynch Bages. As such, the overall reaction to releases for Bordeaux 2014 vintages has been relatively subdued.

Margaux has chosen to release at the same price as Mouton Rothschild and Haut-Brion, its 2014 price is exactly the same as its 2012 price – it cut 10% for the 2013 vintage.

More releases are expected this week.

Related links: The Drinks Business, Liv-ex Blog & Decanter

Liv-ex April Recap

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6a00e55150c0be883401b8d10ca555970c-640wiTwo months of dips in the Liv-ex Fine Wine 100 Index came to an end with a 0.4% increase over March’s level. April, while dominated by Bordeaux 2014 discussions, was a relatively good month for Bordeaux with the region’s trade share rising over last month. Bordeaux should continue to remain a focus in the coming months with the anticipation of Robert Parker’s retrospective of the 2005 Bordeaux vintages due at the end of June.

Related link: Liv-ex Blog

Chateau Mouton Rothschild Begins First Growth Releases

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ImageA slow start to the Bordeaux 2014 en primeur campaign got a much needed boost this week as Chateau Mouton Rothschild released their first growth 2014 vintage at a price that merchants feel will be viewed as favorable by consumers at €240 ex-négociant, or $263.

With the 2014 vintage priced at €240, it matches the release price of the 2012 and is 11 percent higher than the 2013 vintage. While the 2014 is priced higher than 2013, the current value of the euro versus the dollar means that this year’s vintage is nearly 12 percent cheaper in dollars.

Related Link: Decanter

Vieux Chateau Certan Emerges As Top Wine of 2014 En Primeur

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vieux_chateau_certanEach year, Live-ex surveys the international wine trade after the en primeur campaigns to get industry opinions of the vintage and other key indicators. The trade’s general view is that 2014 is not exceptional, but a good to very good vintage. Industry members, using the Parker scoring model, gave the 2014 vintage an overall score of 92 points (average out of 100).

Comparisons with the 2008 were overwhelming, although several respondents clarified that 2014 was a “better” 2008 “with more flesh”

The top ten wines from Bordeaux 2014 were:

1. Vieux Chateau Certan
2. Latour
3. Cheval Blanc
T4. Haut Brion
T4. Margaux
6. Montrose
7. Mouton Rothschild
T8. Lafite Rothschild
T8. Le Pin
10. Ausone

For more on this years survey, click here.

Sotheby’s New York to Auction Their ‘Greatest Burgundy Collection Ever’

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drcDubbed as ‘the greatest Burgundy collection ever offered by Sotheby’s New York’, The Don Stott Cellar: 50 Years of Collecting is estimated to bring in up to $6.2 million next month.

The top lot a case of Bonnes Mares Domaine Georges Roumier 1971, estimated to fetch 32,500-42,500 US dollars. Also up for auction is 120 lots from Domaine de la Romanee-Conti, 96 lots from Domaine Armand Rousseau, 128 lots from Domaine Georges Roumier and a range of top German wines.

DRC wines span the years 1929-1991, including Richebourg, Grands Echezeaux, Romanee-St-Vivant, La Tache and Romanee-Conti.

The collection belongs to Don Stott, Wall Street financier and philanthropist.

Related Link: Decanter

Pricing Expected In Coming Days For Bordeaux 2014

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etiquette_1Jean-Philippe Delmas, deputy managing director at Domaine Clarence Dillon (owners of Château Haut-Brion, Quintus and La Mission Haut-Brion) has indicated that prices for the 2014 vintages should be released by the middle of April.

Paul Pontallier, managing director at Château Margaux believes that the en primeur releases would be over by the end of May.

Delmas also addressed the lack of interest in recent en primeur campaigns and said that if demand is low for 2014 Bordeaux, it could very well be the final draw for en primeur, even though they still believe in the system.

Related Links: The Drinks Business

Liv-ex March Recap

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March RecapThe Liv-ex 100 index dipped slightly in March, dropping 0.4%, matching February’s decline. The Liv-ex Fine Wine 50 held relatively steady until the last week of the month when it drifted, eventually closing March on 268.17, down 0.6%.

While the Liv-ex 100 and Liv-ex 50 indices both declined in March, the Liv-ex Fine Wine 1000 index – the broadest measure of the market – held steady.

Bordeaux’s share of trade on the index was 72.9%, a little way under its monthly average in 2014 of 79.1%.

Related Links:  Liv-ex Blog | The Drinks Business

Are Bordeaux Primeurs Dead?

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Parker-1Citing overpriced poor vintages, Robert Parker believes that Bordeaux has destroyed its futures market and that buying en primeur has lost all appeal for collectors. Parker believes classed growth chateau owners have set release prices at such a high level, no advantage was to be had by purchasing the wine before bottling.

Parker has not written off en primeur campaigns completely, but he believes that buyers’ interest of Bordeaux en primeur would only happen in the future if prices were dropped 20-30% across the board.
Related Link: The Drinks Business

Lower Prices Unlikely For 2014 Bordeaux

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Despite pleas from Bordeaux customers to keep 2014 prices down, producers have indicated that the request is highly unlikely.

Citing quality of the 2014 vintage, chateau owners have indicated will be higher than recent vintages. Dissatisfied buyers of previous vintages will likely see a “goodwill gesture” to try and win them back, but aside from commenting that lower prices would not happen, the goodwill gesture remains to be seen.

Prices for the 2014 vintage should be announced by mid-May.

Related Link: Wine Searcher

Bordeaux 2014: U.S. Buyers Back on Track?

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DSC-0732After four years of not buying, U.S. Bordeaux buyers appear to be back on track according to Philippe Larche, sales director for Bordeaux negociant Vintex. The growing reputation of the 2014 vintage is helping fuel the return, along with a stronger U.S. dollar.

With growers feeling the pressure from past seasons, a lot is riding on the new 2014 vintages. The prospect of increased demand from U.S. consumers is welcome news as many wines from the past five vintages now cost less now than when released en primeur.  This year is also the first year that Robert Parker will not be scoring Bordeaux en primeur wines, so it remains to be seen what impact that will have.

Related Link: Decanter

Burgundy Leading Auctions Ahead Of En Primeur Campaigns

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Photo: Zachys Wine Auctions

As collectors’ attention begins turning towards the end of the month when the 2014 vintages take the spotlight through the en primeur campaigns, burgundy wines are dominating global auctions.

A recent Zachys auction in New York saw lots well exceed original estimates, including two three-liter jeroboams of La Tache 1971 Domaine de la Romanee-Conti Burgundy selling for $44,100 each. Other notable lots in the auction included a 12-bottle assortment case of Domaine de la Romanee Conti 1990, which sold for $67,375, six bottles of La Tache 2005 DRC, selling for $31,850 and a 6-liter methuselah of Richebourg 1971 DRC, which sold for $46,550.

Wally’s Auctions in New York recently held a two-day February sale where one of the top lots was a case each of 1996 Bonnes Mares Domaine d’Auvenay and Bonnes Mares Domaine G. Roumier. Both sold for the identical price of $19,520.

Coming up on March 25th, Southeby’s London has a sale where on of the top items is a six-bottle lot of Romanee-Conti 1993 DRC, which is estimated to sale for 44,000 pounds($64,875).

Related Link: Bloomberg Business

Château Latour Announces Next Releases

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Château Latour2012 was the last time Château Latour participated in the en primeur system and has since moved to an annual re-release of recent vintages ahead of the en primeur campaigns, as well as a small release of older vintages in September. Latour’s pullout of the en primeur system was to allow them to release wines when it considered them “ready”.

In keeping with their new schedule, Château Latour plans to release its 2003 grand vin and the 2008 vintage of Les Forts de Latour later this month, both carrying a premium price. The first set of releases were in 2013 with the 1995 grand vin and 2005 Forts, both met with criticism that the price was too high. Again in 2014 when Latour released the 2004 grand vin and 2006 Forts, the market barely took notice.

The annual re-release will takes place around March 20th.

Related Link: The Drinks Business

Robert Parker Will No Longer Taste Bordeaux en primeur

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Robert ParkerAfter more than three decades of reviewing en primeur, Robert Parker has announced that he is handing over en primeur tasting responsibilities to British reviewer, Neal Martin. While Parker has stated it is not a retirement, he will still cover the region’s wines from bottle.

Parker, widely regarded as the world’s most powerful wine critic, will travel to Bordeaux to taste and rate the 2012 wines in bottle and will also conduct a retrospective tasting on the 2005 vintage.

Related Link:
The Wall Street Journal

Optimism Grows From Positive Momentum of Liv-ex Bordeaux 500

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If you bought Château Haut Bailly 2009 six months ago, your investment would have already grown 62.4% in value. Robert Parker’s decision to upgrade his score to 100 points has helped fuel the massive rise in value, but beyond Château Haut Bailly 2009, the top twenty performers on the Liv-ex Bordeaux 500 are up 15% or more since July 2014.

As the 2014 campaign approaches, the industry needs a bit of positive momentum as the past four years have been a rough ride with the en primeur campaigns.

Bordeaux 500

Related Link:
The Drinks Business

Investor Revival for Bordeaux?

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live ex 50After three years of declining Bordeaux prices, signs are emerging that point to a revival of interest among investors.

The Liv-ex Fine Wine 50 Index tracking 10 recent vintages from the five Bordeaux first growths had its first back-to-back monthly gains since March 2013, rising 0.8 percent in December and 1.8 percent in January.

The five Bordeaux first growths tracked by the index are Chateau Haut Brion, Chateau Lafite Rothschild, Chateau Latour, Chateau Margaux and Chateau Mouton Rothschild.

Related link:
Bloomberg

Chateau Mouton Rothschild auction brings in HK$32 million

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The first ever ex-chateau auction of Mouton Rothschild last week at Sotheby’s Hong Kong gallery brought in HK$32 million (US$4.1 million), more than double the pre-sale estimate of HK$13 – 20 million / US$1.6 – 2.5 million.

The auction saw impressive results with 93% of the 263 lots selling above their estimates, including the world auction record for a 66-bottle lot. The lot included vintages from 1945-2012, with the exception of the 1958 and 1963 vintages. The lot beat the pre-sale estimate of HK$2 million and sold for HK$2.94 million.

The only other time Mouton Rothschild has sold wines at auction shipped directly from its properties was at Sotheby’s in New York in 2007.

Related link:
South China Morning Post

 

Sotheby’s To Hold Major Auction Of Ex-Cellar Collection Of Mouton Rothschild

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Mouton Rothschild 2008

Image: http://www.chateau-mouton-rothschild.com/label-art/discover-the-artwork/xu-lei

To mark the Chinese Year of the Ram, Mouton Rothschild will be auctioning off a collection of its top wines on January 30th in Hong Kong. Sotheby’s is projecting the sale to bring in up to $2.5 million with top selling lots expected to include several old vintages, including 1870, 1878 and 1901.

A similar auction in 2010 brought in sales that, in some cases, were nearly 300% over normal trading prices. According to the auction recap from Decanter, the high yields were due to the lots being directly from Lafite’s own cellars, reminding everyone about the importance of status, history and provenance in Chinese culture. Provenance is as much about the people that owned the stock, as it is the storage conditions.

“People are willing to pay for well stored wine,” says Alexander Westgarth, founder and president of Westgarth Wines.

As in previous notable auctions, the lots for the upcoming auction are coming directly from the château, which could again yield significant sale prices.

Related links:
Decanter China
The Drinks Business

Interesting Year Awaits Fine Wine Market

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With the first full week of trading in the books, 2015 looks like it might be the year that breaks the unprecedented four year decline of the fine wine market.

 

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Liv-ex Fine Wine 50

 

What to watch in 2015:

Bordeaux 2005, once hailed as possibly the greatest vintage ever, took a hit once Robert Parker’s in bottle scores were released. The scores, which many say were underrated initially, are being upgraded. The 2005 Mouton Rothschild was upgraded from 96 to 99+ points. This upgrade puts it above the 2000, 2009 and 2010, making the vintage one to keep your eye on in 2015.

Related link:
Liv-ex

Bordeaux Growers Urged to Cut Prices of 2014 Vintage

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Simon Berry, seventh generation wine merchant and Chairman of London’s Berry Bros. & Rudd, has called on Bordeaux growers to cut their 2014 prices after challenges have emerged for finding buyers for the past three Bordeaux vintages.

According to Berry, the pricing for the 2013 vintage was set at too high of a level to be attractive to investors.

The 2014 vintage, according to Berry, is the last vintage for Bordeaux growers to get it right, citing the fact that people have moved on from the famed region and they have almost reached a point of no return for those buyers.

Related link:
Bloomberg

Silver Lining to Bordeaux 2014 Harvest

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Jacques Palut/Shutterstock

Coming off low volume of the 2013 harvest, which was 3.8 trillion hectolitres, 2014 proved to be another poor harvest for the Bordeaux area. Multiple hailstorms during the 2013 growing season contributed to the weak harvest

The 2014 harvest is projected to be between 5.2 and 5.4 million hectoliters.

The silver lining to the 2014 Bordeaux harvest comes from the abundance of autumn sun which helped to create a “rare” vintage. This vintage is helping to create excitement within the Bordeaux community, something much needed after the catastrophic 2013 season.

Related link:
New York Daily News

Gold May Glitter, But Wine Is Doing Just Fine

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One has a history of being steadfast and dependable, and known for setting an historic, globally respected economic standard. The other is an epicure’s delight: a sophisticated, delicious and always sumptuous indulgence. Still, in spite of their obvious differences, gold and wine, two of the savvy luxury investor’s most sought-after properties, have kept a closer pace with one another over the last ten years than with other luxury assets such as silver, jewelry or fine art. That is, until now.

For the first time in more than a decade, gold and wine prices are diverging. Fine wine has begun to take center stage in the luxury investment arena, showing signs of outperforming gold and thus edging its main competitor – and most enduring luxury asset – out of the spotlight. Taking their cue from market trends, particularly those set by status-conscious Asian markets where fine wine is in unprecedented demand, serious investors are becoming increasingly intrigued with the potential Return-on-Investment this hot commodity offers. No longer trepidacious about buying up case after case of the most exclusive grape, they are smartly diversifying their portfolios while gaining a cachet of elegance in the process.

2013 showed a surprising drop of 17% in gold prices, putting an end to twelve straight years of consistent gains. This has been a tremendous blow to investors, as gold has long held the reputation of being the primary foolproof investment in even a compromised economy. This recent blow has substantially weakened gold’s status as the premier go-to, safe haven asset for preserving and even advancing wealth.

As gold prices continued to drop, fine wine, conversely, enjoyed a marked bump of nearly 8% in 2013, with all indicators pointing to that number rising even further in 2014. A fundamental case of supply versus demand, the pursuit of trophy wines is especially prominent in Asia where China, with its strength in numbers, expectedly leads the pack. Asia’s nearly insatiable taste for fine wine has had an exceptional impact on the market, driving prices exponentially higher and sparking a trend among the financial elite for investing in this glamorous commodity. Furthering its appeal is the fact that, unlike gold, wine is a consumable commodity. With each bottle popped, the value of top-tier vintages spike due to the dwindling availability of a finite supply of product. While gold is mined and stored, each vintage of fine wine is unique unto itself, rendering it genuinely irreplaceable once it’s gone. But the question remains: is investing in fine wine truly viable, or even advisable?

In a word, absolutely.

Glamour aside, there are several financially sound reasons for smart investors to consider adding fine wine alongside more traditional investments such as gold and stocks. First, in spite of its more frivolous reputation, wine has proven itself to be an incredibly stable investment. This is primarily attributable to its detachment from economic fluctuations. The vast majority of gold is held purely as an investment and is therefore subject to economic influences; however, asset class wine is mostly owned by wine drinkers and oenophiles. What often generates their purchases – the desire to enjoy wine – is significantly less volatile and sensitive. Consequently, unlike more traditional acquisitions in stock or real estate markets, wine can rise above inflationary downturns and ride out the storm, making it attractively low risk. This difference also colors fine wine with a palette that includes a substantial Return-on-Investment – as much as 5% to 10% per annum, with higher percentages expected in the coming months.

Another inviting reason to consider fine wine investment is its tax free status. Not subject to capital gains, income tax or even inheritance tax, wine escapes these trappings scot-free, saving investors major financial outlays even as their bottles show a profit.

Because fine wine stock is finite, the supply and demand dynamic takes on a special significance. Top prestige investments, such as Bordeaux vintages, are subject to imposed production limitations, keeping availability down and prices up. Others are impacted by consumption. Whatever the reason, the rarity factor gives fine wine investing a definite economic advantage over more traditional assets, making it the perfect hedge in a comprehensive, balanced portfolio.

And finally, fine wine holdings give an investor an asset that carries a more personal touch. Much like fine art, it appeals to the senses on a romantic, almost visceral level, and can therefore closely reflect the investor’s own individuality. Again like art, it is also tangible; however, unlike a Pollack or Picasso, it is easily transportable, verifiable and, if desired, ultimately consumable. In other words, as long as there are corkscrews within reach, no wine investment will ever truly go to waste.

As a leading fine wines brokerage service, Westgarth Wines will set you on course for an exciting ride investing in superior quality wines. Our team of specialists can educate you in the low risk-high return nature of this booming investment arena, assist you in developing a smart, diversified portfolio, and usher you into the cultivated and always fascinating world of wine.

The Year of the Horse Brings a Galloping Rise in Red

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The Chinese have a popular saying that “a good horse never turns its head to eat the grass behind.”  So perhaps it’s befitting that on January 31st, 2014, millions of people across the globe will ring in Chinese New Year’s Year of the Horse, lending them the opportunity to shake off the tired remnants of 2013’s Year of the Snake and make a fresh start inspired by the horse’s blend of confidence, grace and a touch of adventure.

One of Chinese culture’s two major holidays, Chinese New Year, also known as the Spring Festival, is celebrated through a variety of traditions and activities, many involving the enjoyment of fine food.  Courses laden with enticing edibles rooted in history and signifying specific wishes for health, happiness and prosperity in the upcoming year are shared among family and friends to commemorate these highly respected bonds.  And, with the color red symbolizing the wealth, power, and greatest of good luck among Chinese populations, celebratory meals and delicacies will more often than not be accompanied by fine red wines.  While those of more modest means can explore the market’s affordable varietals, Chinese New Year allows the serious wine consumer – and investor – a convenient excuse to indulge his or her penchant for superior vintages of their most favored reds.

Due to the elevated position the color red holds in Chinese culture, it comes as no surprise that China has recently become the world’s largest consumer of red wine, ousting longstanding France in the process.  According to a new survey conducted by Vinexpo, 2013 brought a 136% rise in red wine consumption in China since 2008.  Chinese consumers enjoyed over 155 million cases of red, forging ahead of both France’s 150 million cases and the 141 million cases uncorked by Italy, formerly the second largest consumer.  With a drop in consumption among French and Italian aficionados, this rise in the Asian market is good news to wine producers, particularly those in France.  France’s domestic sales are expected to decline by nearly 18% by 2017, so the surge in exports to China is a most welcomed one.

Currently the world’s fifth largest overall wine-consuming country, China is poised to become number one by the year 2016.  Additionally, according to the 2013 Shanghai Free Trade Zone and Wine Investment and Transaction Summit, the city of Shanghai is rapidly evolving into the world’s next greatest international wine hub and one of the most influential wine investment markets.  In short, China’s growing consumption – the world’s fastest, in fact – is propelling its position as a major force in the wine community in terms of both taste and investment, and is forecasted to drive the market over the next five years if not longer.

China’s luxury oenophiles initially fell in love with France’s renowned Bordeaux wines, with first growth Lafite Rothchild being the top jewel in the crown.  Moreover, reaching beyond mere consumption, 2013 showed a steady increase in Chinese domain acquisitions in the region, with a rate of approximately one chateau a month.  Although most of these domains have been on a smaller scale, the pattern wields considerable impact on the global market as a whole. It’s likely to be only a matter of time before Chinese prestige investors seek out and conquer the more widely known chateaus and establish a market stronghold as they become more comfortable in their skin.

While European products, especially those of French and even Tuscan origins, are still favored, Chinese consumers have recently shifted their interest towards the United States, with California wines – notably cabernet sauvignons – gaining momentum not only for their unique and inspired quality but for the Hollywood-style glamour associated with the state.  The Chinese have a well-known affinity for razzle-dazzle, and California, with its history of social, cultural and media influence on the global landscape, easily satisfies this predilection.  And once again, the interest doesn’t stop at the bottle; on the contrary, much like the aforementioned French acquisitions, China’s uber-wealthy are being seduced by opportunities to invest in stateside vineyards, particularly in California’s Napa Valley.  Chinese demand has driven prices for California’s cult classics significantly, and at a fairly rapid pace.  2012 alone showed a 20% leap in the state’s exports, a jump directly attributable to the Chinese rush which has, in turn, sparked new interest in the Golden State’s products among competitive international wine investors.

So what’s in store for the Year of the Horse?  Obviously, red will continue to reign supreme among Chinese consumers.  Moreover, it’s expected that China will continue to lead the way in somewhat impulsive but always interesting wine consumption trends.  And, like their beloved and beautiful equine mascot of 2014, they will do it with a flourish and in a style all their own.  Just as the horse is regarded as one of the most romantic stars in the Chinese zodiac, so China’s romance with fine wine will be a dynamic and captivating mainstay.

Investments of Passion Still Reign Supreme

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In the face of a compromised global economy, made even more fragile by a problematic credit crunch that has plagued the financial arena for nearly a decade, the number of the world’s High Net Worth Individuals, or HNWIs, has, surprisingly, seen a solid and impressive surge.    Wealth-X, one of the world’s most definitive and accurate wealth intelligence firms, reported that 2012 showed a 5% increase in the number of people who met the firm’s definition of true “ultra-wealth,” that being, the possession of net assets meeting or exceeding $30M.  Further, the report predicts that the next ten years will yield an even greater growth of HNWIs, reflecting a 50% cumulative increase in people reaching and crossing this $30M wealth barometer.  Still, the capricious economic problems which continue to impact the financial landscape have prompted even the super-rich to seek investment channels that pose less risk but nonetheless meet their appetite for glamour and diversity.  Despite its reputation for being a potentially volatile “investment of passion,” fine wine continues to perform exceptionally well among the elite investor.

The Wealth Report 2013, Knight Frank’s flagship research publication on luxury investment trends, presents an optimistic view of fine wine as a consistently appealing and popular investment among HNWIs.  Wine offers the savvy HNWI a way to satisfy the desire for a sound financial investment as well as the penchant for seductive indulgence, and trails behind only collectable art and fine time pieces as passion investments.  And, unlike the more traditional, mainstream investment arenas favored by HNWIs, such as finance-oriented stocks and bonds, this special category of assets has the unique ability to reflect an investor’s own tastes, style, and even personality – an attractive perk for this high income niche.  In response, the last several years have shown significant growth in investment and boutique funds which specialize in such emotionally-driven investments, offering HNWIs the opportunity to build a more diversified portfolio that is both personally gratifying and less vulnerable to dramatic fluctuations.  Investments of passion have historically maintained their value amidst a variety of economic climates, including inflationary conditions, which speaks to the HNWI client’s more rational side.

The art of investing in things you love certainly seems attractive, but are there complications?  As with any investment, regardless of how seemingly fail proof or appealing, the answer is yes.

Morgan Stanley, the global financial services firm and a market leader in securities, asset management and credit services, recently delivered a sobering report on the global availability of fine wines.  According to the report, 2012 showed a shortage of nearly 300 million cases of quality wines, the most notable decline in nearly five decades.  These numbers can be directly attributed to multiple events, the most obvious being the decline in wine production Spain, Italy and France – the world’s three top wine-producing countries – due to unexpected climate changes.  Producing 60% of the globe’s wine supply, these countries have all experienced a drop in the range of land used to grow and develop vineyards after a 2004 peak.  Meanwhile, worldwide wine consumption has steadily and incrementally increased since 2000.  Only European consumption has gone against the trend and has conversely shown a minor wane, but even this decline has been countered with a heightened consumption increase in countries such as the United States and China, the latter enjoying a dramatic 150% increase in fine wine consumption over the last five years.  In short, the scenario represents the fundamental equation of supply not meeting demand, which, while frustrating for the neophyte buyer, can be great indicators for the assertive, proactive and experienced investor.

Morgan Stanley’s somewhat grim statistics were soon met with more positive results from the International Organization of Wine and Vine (OIV).  In its own October 2013 report, the OIV stated that the year ushered in an exciting and significantly improved global harvest, signaling good news for future acquisitions.  Investors could take a deep breath and put their worries about the vine on the shelf; however, they might have to practice patience and wait a few years for their dream investment.

The OIV’s update was a welcomed one, but what about the current investment climate?  For those lucky enough to be in a position to buy, there are still prestige wines available, but the overall shortage begs for action.  Smart HNWI investors, and especially those for whom fine wine is a top-tier investment preference, should capture their wines of choice sooner rather than later.  And, along with providing sound portfolio diversification, investments of passion will surely bring a special kind of return which surpasses almost any financial reward – the thrill of owning a prized, elegant and cherished possession.

Still in Love with Lafite

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It’s no secret that Lafite and China’s wine collectors have been locked in a fairly intense love affair for the last several years. This relationship created an almost unprecedented demand – and skyrocketing price tag – for the wine that Baron Eric de Rothschild, owner of Château Lafite Rothschild, calls “the girl you want to marry and spend your life with.”  Although there are certainly other Bordeaux First Growths which are as desirable, not one has come close to the power of the enchanting Lafite in capturing the imagination of the Asian oenophile.

What ignited this relationship is complex.  Many theorize that the wine’s impressive lineage speaks to China’s cultural respect for history.  Subtle and elegant, Lafite initially attained its celebrity status when it was ranked first in quality by the 1855 brokers’ classification ordered by Napoleon III for the Exposition Universelle de Paris.  Also keeping in line with this classical tradition, the wine’s distinctive label has remained unchanged throughout its production, further underlining its superior standing.  On the opposite end of the spectrum, other experts point to more modern factors, such as the insatiable penchant for international luxury items that runs rampant among Asia’s nouveau-riche, with fine wine ranking high on their list.  The Chinese have wholeheartedly embraced fine wine consumption at a fever pitch, and it has become the chic beverage of choice among the economic elite. Aside from the obvious delight to the palate, Chinese oenophiles consider indulging in fine wine – particularly red wine, and especially the alluring Lafite – as a heart-healthy practice, noting its added perk of being high in rich antioxidants such as resveratrol.  This benefit is yet another major draw for China’s notoriously health-conscious society.  Adding to the attraction is the color red itself, which has always represented blessings and prosperity in Chinese culture.  Combine all these elements and you have market which is ripe and willing to spend whatever it takes to own the very best.

Hong Kong’s 2008 abolishment of import duty and taxes also augmented fine wine’s rise in popularity among Asia’s affluent, allowing for increased access, consumption and appeal. The change heightened wine imports by a phenomenal 88% in Hong Kong, and made the hub the first free wine port among major global economies.  Important auction houses including Sotheby’s, Christie’s and Bonham’s have all begun holding sales in Hong Kong, garnering astronomically prices for their featured star; in 2010, Sotheby’s watched as three bottles of 1869 Lafite became the most expensive wine ever sold, with each one reaching USD $233,972.  At this same auction, all 284 lots, with 190 of them being Lafites, went to Asian buyers.

China’s obsession has hardly gone unnoticed by the Rothschilds.  In response, Château Lafite Rothschild announced in 2010 that its Lafite 2008 would feature the Chinese symbol for the figure eight, which holds special significance for the Chinese with regards to luck and fortune.  (It also commemorated the partnership between Domaines Barons de Rothschild Lafite and the local CITIC East China Group, Inc., on their first Chinese winery, a 4.3 acre spread in the eastern Shandong province, also affectionately called “China’s Bordeaux.”)  This one strategic, solely cosmetic move drove prices up by 20% virtually overnight, catapulting investor profits through the roof once again.  A case of 2008 became worth $16,275 on Liv-ex; two days later, the same case reached $33,325, and continued upward with no end in sight.

Fast forward to 2012.  Everything that rises must converge, and so it was for Lafite. With a market unable to sustain the figures of the previous 24 months, cases of the beloved wine began to decline. A case of 1982 Château Lafite that commanded $62,000 or more in 2010 was being auctioned for less than $38,750 – an almost 50% drop.  Moreover, as Asian buyers became more knowledgeable and confident, they began indulging a growing curiosity about other top-tier fruits of the vine.

But true infatuation runs deep, and Lafite is hard to forget.  By November 2012, the jewel in the Rothschild’s crown was starting to reclaim her place and position among besotted Asian fans, and Liv-ex reported a notable increase in its index.  And, while what are considered “off” vintages were initially the more popular investment, both “on” and “off” vintages are now moving up in favor and value at a similar pace. The import of Bordeaux wines into China has increased by 55% over the last year or so, and with Asian aficionados now buying on average one Bordeaux château per month, it’s clear that their appreciation for fine wine is not a passing fancy.

So what does this mean for the serious, savvy wine investor?  With Lafite’s classic delicacy, unwavering reputation, and nearly impeccable history, it remains a smart investment.  Lafite is also consistent, regularly earning ratings of 98+ by critics and experts, with an amazing five vintages doing so between 2000 and 2010.  Finally, the recent April 2013 Liv-ex figures show that Lafite 2008 enjoyed the strongest monthly movement of all high-end luxury wines, pointing to an encouraging trend that may inspire a market to rival that of several years ago.  Simply put, there is no time like the present to add Lafite to your investment portfolio.

Maximize your Wine Investment’s Value

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Smart investors looking for a reliable way to diversify their portfolios are increasingly turning to fine wine. With annual returns averaging 10-15% over an impressive sixty-year period, this luxurious item offers strong reassurance of a great return on your capital.

Fine wine is considered a stable, low-risk choice for investors, and a major reason for this is its physical nature. Because wine is a tangible asset, its price—in common with other commodities that can be seen, measured and touched—tends to rise with inflation. However, because wine is fragile, it cannot simply be placed in any old room after purchase and forgotten about. Fine wine is one of the few commodities that can improve with age, but in the wrong environment it can also deteriorate. If you want to reap the rewards of your wine’s full investment potential, it is absolutely critical to ensure that it’s scrupulously stored and maintained.

Just how much value the wine-trading community places on high-quality storage was brought into the spotlight by Chateau Latour’s recent withdrawal from the en-primeur (wine futures) market. Latour’s decision to step away from en-primeur selling was largely motivated by a wish to secure the very best possible provenance for their brand. Latour’s Premier Cru will now only be released for sale once bottled, and at the ideal time for drinking. By retaining control of the entire production and maturation process, the chateau will be able to guarantee that their already celebrated wine has been nurtured in optimum conditions throughout its development, allowing it to reach a state of perfection.

Latour’s bold move reveals their complete confidence in the ability of perfect provenance to sell. The message for investors is clear: to gain maximum resale value for your wine, store it in a facility renowned for its expertise—a name that will inspire buyers with confidence.

So what are the best storage options for wine investors? Well firstly, choosing to store your wines in the UK gives you the credibility of the government-regulated ‘in-bond’ system. In a nutshell, it is possible to buy wine in the UK before it has officially ‘landed’ in the country and had VAT tax paid on it. To remain ‘in bond’ a wine must be stored in one of a very few specialist facilities. The audit trail that accompanies in-bond wine (ensuring that VAT will eventually be paid) provides solid proof that a wine has been stored in quality-preserving conditions since the beginning of its life.

In contrast, in the US you may only buy wine once all the import taxes have been paid. There is no equivalent system of documentation to UK in-bond, meaning you have to rely solely on the reputation of a storage establishment as evidence that a wine has been properly maintained. Another drawback of storing wines in the US is the vast distance a wine will have travelled from its chateau of origin, risking damage in the process. The much shorter distance between European wine producers and the UK minimizes this risk.

So where precisely should you store wine in England? There are two superior options, which will also give you access to the renowned international trading platform Liv-ex, as well as the highly liquid UK market—the largest secondary market for fine wine in the world. London City Bond is the oldest bonded warehouse, dating back to before 1870. But the facility with an unparalleled reputation, considered to be the greatest wine storehouse in existence, is Corsham Cellars in Wiltshire. Unlike LCB, Corsham’s storage is located 100 feet below the ground, safe from the potentially damaging vibration of delivery trucks and general traffic. Corsham’s reputation for excellence is so strong that investors have entrusted $1.5 billion worth of stock to their care.

As well as eliminating the adverse effects of vibration and light, storage at Corsham Cellars controls temperature and humidity levels to create the ideal conditions for wine preservation. Housing your investment in these highly-sought after conditions is surely the best way to assure the world that your wine remains in pristine condition.

For more information on the benefits of Corsham Cellars and UK wine investment, visit www.octavianvaults.co.uk

Why Bordeaux’s First Growths should be the First Port of Call for Investors

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Back in 2005, a case of the legendary Château Lafite Rothschild 1982 vintage would have set you back $9,400. In 2012, you could have sold that same case for just over $68,000.

There’s money to be made in wine investment, and though few vintages can command the colossal price tag of 1982 Lafite, returns on fine wines can be considerable. To invest successfully, however, it’s essential that you do your homework. Only a tiny percentage of wines on the market make suitable investments, and of these, a select group has proven consistently reliable—generating double-digit returns, year on year, for decades.

So which wines should you invest in? The overwhelming majority of investors choose Bordeaux, and for sound reasons. Wines from this region make up 90% of the secondary market—a testament to their effectiveness as assets. But the pinnacle of all Bordeaux investment wines, the group famed for their reliability, are the so-called First Growths’. Traditionally considered the ‘blue chips’ of the wine world, First Growth vintages never fail to be exceptional. The superb output of the First Growth châteaux has earned them a global renown that’s enough on its own to guarantee continuing demand. First categorized by Emperor Napoleon III back in 1855 as the finest wines of Bordeaux, the original First Growths were Château Lafite-Rothschild, Château Latour, Château Margaux and Château Haut Brion. The celebrated Château Mouton-Rothschild took up its rightful place among these giants in 1973, following a 50-year campaign by the Mouton-Rothschild estate.

The selling price of 1982 Château Lafite may be an extreme example, but it’s common nevertheless for First Growths to command exceptionally high prices—with thousands of dollars paid for individual bottles. Although First Growths can be a relatively expensive investment initially, their high price is one of the reasons why they make such great assets. Expensive wines tend to have the greatest potential for value growth. Added to this, the exclusivity of the wines—which only an extremely wealthy demographic can afford to drink—makes them resilient to wider economic downturn. The kind of end consumer that typically buys First Growth wines tends to be relatively unaffected by the health of the economy at large.

The good news for First Growth investment is that the number of people with serious purchasing clout is growing. Young aspirational consumers from the BRIC nations are leading a growing demand for top-quality wines, as they increasingly look to the illustrious history of Bordeaux as inspiration for their lifestyles. Spiros Malandrakis, researcher at the global information publisher Euromonitor, predicts that over the next five years, sales of wine in these emerging countries will grow by as much as 80%.

Another reason why First Growths make great investments is their complex make-up. These Cabernet Sauvignon blends are rich in tannins, which need a period of years to develop before the wine becomes drinkable. First Growths also tend to improve as they age, until they reach their peak. This creates a favorable situation for investors, who can hold the wines for long enough for substantial value growth to occur.

The impeccable reputation of First Growth wines relies heavily on the strict regulations required for them to be AOC (Appellation d’Origine Controlle) certified. These regulations control the winemaking process, ensuring that exacting standards are always adhered to. The AOC also restricts the size of the vineyards, resulting in another boon for wine investors—a very limited supply. With demand constantly rising, a supply–demand imbalance is created, pushing up the First Growths’ value. What’s so special about wine investment is that unlike other commodity markets that are governed by an imbalance between supply and demand—precious metals for example—every vintage of a particular wine is completely unique, and once gone can never be replicated. Over time, as consumers drink wines from a given vintage, their supply is reduced more and more. This situation creates a perfectly inverse relationship between supply and demand that’s exclusive to fine wine. It’s a major reason why prices for Bordeaux’s First Growths have risen so consistently over the last few decades.

You can learn more about the history and character of the First Growth wines, including their price movements over time, on our Invest in Wine page.

Why You Should be Watching Liv-ex and London

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A short plane ride from the vine-covered plains of Bordeaux lies the vital center of fine wine trading: London. Bordeaux may be the winemaking industry’s capital, but if you’re an investor seeking the best opportunities to profit from fine wine, it’s London you need to keep your eye on.

London is the powerhouse of the market. It’s home to world-class auction houses Christies and Sotheby’s, and scores of wine merchants trading on a global scale. Internationally renowned wine authors and critics like Jancis Robinson and Hugh Johnson influence drinkers the world over from their bases in or around the UK’s capital city. The UK fine wine commodity market is quite simply the largest and most developed there is—the legacy of a centuries-old British passion for Bordeaux red.

A major draw for wine traders is the London International Vintners’ Exchange—or ‘Liv-ex’, as it’s better known. Liv-ex offers established wine merchants an online trading platform, from which they can reach an immense pool of professional buyers and sellers from all corners of the globe. Former bankers Justin Gibbs and James Miles founded the exchange in 1999. From its modest beginnings, hidden away in a rented office above a takeaway pizza joint, Gibbs and Miles have grown Liv-ex to a global membership of more than 400 trading professionals in 33 countries. Collectively, these members are thought to be responsible for a colossal 80 percent of the world’s fine wine turnover.

Liv-ex is also responsible for the Fine Wine 100 index—the wine investment industry’s leading price benchmark. LVX 100 works in a similar way to the DJ30. Calculated monthly, it represents the price movement of 100 of the most sought-after wines on the market.

As a private investor, you may not be in a position to buy wines at Liv-ex’s wholesale prices, but you can still make good use of their comprehensive online database. If you want to know how much you’d stand to make by selling your wines to a wholesaler, a quick search of the Liv-ex database will give you a good indication.

Even better news for wine investors and enthusiasts is that Liv-ex has developed a handy set of online tools specifically tailored to your needs. Cellar Watch (www.cellar-watch.com) gives you professional-level access to Liv-ex data, including past and present fine wine market prices, and information on recent Liv-ex bids and transactions. The Cellar Watch Valuation Tool lets you create virtual cellars containing your wines, then monitor and analyze their real-life performance. You can divide your wines up into different cellars if, for example, you want to separate your investment wines from the ones you’ve earmarked for drinking.

Also invaluable is the famous Liv-ex blog. This is well worth following if you want to be kept up to date with all the latest happenings in the global fine wine market. The blog is an excellent resource to inform the decisions you take on your wine investments, bringing you authoritative content such as interviews with industry experts, auction reports and data summaries.

If you lack the time to digest all the latest news from Liv-ex properly, then never fear. At Westgarth we keep a constant eye on what’s happening at the exchange, so we can pass on the information that’s most relevant to your investment.

A Halloween History: Romanée-Conti and the Grape-Vine Assassin

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’Tis the season for devilish deeds and dark tales… and we’ve got a ripping Halloween yarn to tell that might have been written for wine-lovers.

It’s a story packed with all the gruesome elements of a classic murder mystery—poison injections, a death threat inscribed on parchment, a cemetery appointment in the dark of the night and a hanging. But though this might sound like something dreamed up by Conan Doyle circa 1900, it’s no work of fiction. It’s a true story. It happened in 2010. And the victims of the poisoning? Well they weren’t human at all, but the magnificent vines of Burgundy’s Domaine de la Romanée-Conti—producer of one of the most desirable and expensive wines on the planet.

The Domaine de la Romanée-Conti is Burgundy’s premier wine-producer, responsible for a Pinot Noir of formidable repute. Like its awe-inspiring history, Romanée-Conti’s renown is centuries old. Back in 1780, the Archbishop of Paris called this glorious red, “velvet and satin in bottles.” And you’d be hard-pushed to find more lavish praise than the words of Roald Dahl, who likened drinking Romanée-Conti to “experiencing an orgasm at once in the mouth and the nose.

To illustrate just how devastating the 2010 attack on the Romanée-Conti domaine could have been—financially, as well as culturally—consider that a single, large-format bottle of the 1999 vintage recently sold for more than $100,000. So you can imagine the fear of estate-owner Aubert de Villaine, when in January 2010 he received an anonymous note threatening the destruction of his priceless heritage.

Chapter one: In which de Villaine receives the first two anonymous letters

Aubert de Villaine received three malicious mailings in total from an unnamed sender. The first, sent in early January, contained a rolled up parchment in a cylindrical tube. On it was sketched a detailed and impressively accurate drawing of the 4.46-acre Romanée-Conti vineyard, with a mysterious circle in the middle of it. An accompanying note warned that de Villaine’s prized yard would be destroyed—unless he complied with the ransom demands which were to follow.

Aubert dismissed the letter as the sick joke of a prankster. But then, a couple of weeks later, a second package arrived on his doorstep. It contained the same kind of cylindrical tube and parchment as before. This time though, the diagram of the vineyard was marked with two circles—an additional one in the top-left corner of the vineyard, much smaller than the first.

The second letter demanded that De Villaine leave one million euros in a suitcase, close to the spot where the small circle was marked on the drawing. To show that the blackmailer meant business, he or she informed the horrified estate-owner that two vines in the area enclosed by the small circle had already been killed by poison. A further 80 vines, located within the large circle, had also been poisoned, but could be saved by an antidote. Provided, that was, that de Villaine paid the extortionate ransom sum.

Chapter two: Crime scene investigation

This time, de Villaine did not hesitate. He immediately called the police, and a team of investigators soon arrived and set to work on the vines. They found that two had indeed been poisoned by herbicide. The assassin had drilled a hole in the foot of each vine, then used a syringe to administer a lethal injection. When the other eighty vines were examined, the police found the same drill holes, but no evidence of poison. The blackmailer’s story was at least in part a bluff.

The police’s discovery not only gave a glimmer of hope for the vineyard—it also revealed a vital clue about the assassin’s identity. The syringe technique used to administer the poison smacked of a traditional method used to protect vines from the phylloxera insect, where liquid carbon disulfide was injected into the soil. It seemed that whoever had sabotaged the vines knew a great deal about winemaking, a suspicion backed up by the appearance of some highly specialized winemaking terminology in the second letter.

Chapter three: The heroic acts of Jean-Charles Cuvelier

On the advice of the police, de Villaine sent his trusted employee Jean-Charles Cuvelier down to the vineyard to set a trap for the grape-vine slaughterer. Instead of the case of money, Cuvelier left a note promising that the ransom would be paid after a period of time needed to gather together such a large sum. A few days later, de Villaine received his third and final anonymous mailing. Please, asked the assassin, with uncharacteristic politeness, deliver the money, in a suitcase, to the cemetery in the nearby town of Chambolle-Musigny, at 11pm on February 12, 2010.

Re-enter Cuvelier, de Villaine’s right-hand man. Here’s where the story gains all the spookiness of a Halloween fireside yarn. Picture the scene in which Cuvelier enters the cemetery in the pitch black, pushing his way through a great, arching, wrought-iron gate, which grates eerily on its hinges. He carries a suitcase carrying one million fake euros—and something else, a tracking device that would activate itself when the bag passed back through the gateway. Cuvelier, with trembling hands, drops the case just inside the fence and flees like a bat out of hell to his car. Half an hour later he receives a phone call from the police. Mission accomplished! The assassin had been captured.

Chapter Four: In which the grape-vine murderer meets the grim reaper

And we can now reveal the identity of the criminal: one Jacques Soltys, a previous offender in his late 50s who’d attended the Lycée Viticole de Beaune wine-making school as an adolescent. Five months after his arrest our tale reaches its grizzly conclusion. Overcome perhaps by remorse in the face of his life of crime, Soltys hung himself in a Dijon prison.

Soltys’ dastardly scheme to poison de Villaine’s precious vineyard was unprecedented. And though it makes for excellent Halloween storytelling, we hope—for the sake of connoisseurs and wine investors everywhere—that Burgundy’s foremost domaine never sees such a crime repeated.

Love of Fine Wine in China Continues, Auction Proves

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As auction season enters full swing, another record-setting event in Hong Kong shows us just how vigorous the Chinese appetite is for investment in fine wine. At Sotheby’s auction, 9 out of 10 lots went to private Asian collectors, and 12-bottle cases of Lafite and Petrus smashed their already high estimates. This is excellent news for Bordeaux investors, which comes on the back of last month’s reports that during the last year Bordeaux exports to China have risen dramatically.

Over the two days of Sotheby’s auction, ninety-six percent of wine lots were sold, bringing in a total of around $9.5 million. One Methuselah (6 liter) bottle of Romanee Conti sold for $110,000 alone. The high sale prices of Burgundies such as this may mean that investors will increasingly turn to Bordeaux in search of better value. The second day of the auction saw Petrus under the hammer again, with a case of their 2000 vintage selling for $57,000.

Next month’s major auction in Hong Kong begins on November 23rd, and promises to be yet another fascinating chapter in a record-breaking season. It’s also clear that the love of Petrus, Romanee Conti, and Chateau Lafite in China continues unabated. Sotheby’s Hong Kong event was another great auction, with stellar results, and represents a fantastic start to the quarter.

 

Record-Setting Auction Season Shows Bordeaux is Back

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Acker Merrall & Condit Companies, one the world’s most prominent wine auctioneers, broke wine sale records in Hong Kong recently with the results of their auction on September 21st and 22nd. This fall’s auction season has kicked off to an exciting start, with eight auctions already netting over $30 million in the month of September alone.

At this latest $8 million auction at the Grand Hyatt Hong Kong, ninety-eight percent of the lots were sold, with a third selling above their estimate price. However, it was the Champagne of famous collector Robert Rosania that stole the limelight by setting forty-seven new world records. One bottle of Blanc de Blancs’ legendary 1966 vintage—considered by many to be one of the finest years ever—pulled in an incredible $14,000, as did the 1947 Krug.

The Bordeaux highlights included a 67-bottle vertical Mouton collection that fetched $69,000, twelve bottles of ’82 Lafite which brought in $44,000, and a case of ’82 Petrus that sold for $50,000. Burgundies have remained in high demand over the last few months, but this is a clear indication that the Bordeaux Market is beginning its return to dominance.

Acker Merral’s CEO John Kapon noted, “Fine and rare Bordeaux and Burgundy wines still dominated the Top Ten lots, showing the intense demand that still remains for those wines in the marketplace… Bordeaux regained a bit of bounce in the salesroom, another good sign.” One telling fact, according to wine-searcher.com, is that over the last twelve months, Bordeaux sales to China have increased by an astonishing fifty-five percent—driving overall exports up by seventeen percent.

The eagerly-anticipated Sotheby’s Hong Kong auction, coming up on October 5th, is also expected to set world wine sales records, reflecting the growing global demand for fine wines. Sotheby’s considers this their greatest single-owner wine auction to date. The huge collection offered for sale focuses on Bordeaux, with vintages spanning the last century, including many famous years. Clearly this will be another milestone for the wine market, with indications of many more to come.

 

Saint-Émilion Re-Classification Rocks the Right Bank

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After eighteen months of work supervised by the Institut National des Appellations d’Origine, or INAO, the re-classification of the Bordeaux wine region Saint-Émilion has been approved. For wine investors, the most interesting change is the promotion of Château Pavie and Château Angélus to the highest possible rank. According to an INAO statement, the upgrade was granted in recognition of “their consistency in quality and their quest for excellence.” The Saint-Émilion appellation previously only held two Premier grand cru classé A wines: Château Ausone and Château Cheval Blanc. The addition of two more wines to the highest Saint-Émilion grading is surely the result of improvements in viticulture , which have led to an increase in the frequency of great vintages in recent years.

Gerald Perse, the owner of Château Pavie, has had a significant impact on the success of the estate. He purchased Pavie in 1998 for $30.8 million, a figure dwarfed by last year’s valuation by the London International Vintner’s Exchange, which put it on a par with Château Angélus at just over $200 million. Perse’s efforts have been particularly noted by influential wine critic Robert Parker, Jr., who rated ten of the last twelve physical vintages at above 95 points, and described the Pavie 2000 as, “unquestionably one of the most monumental wines Bordeaux has ever produced.”

Fine wine investors will be aware that last year the case prices of Saint-Émilion’s Cheval Blanc and Ausone averaged $8,500 and $17,500 respectively, while Pavie and Angélus were valued at only $2,700 and $2,880 per case. The reclassification announcement on September 6th has already begun to change things, as the quality and consistency of Pavie and Angélus is officially recognized to be on a par with the other two appellation leaders. The two labels are sure to become more highly sought-after at their current, relatively undervalued price. Collectors and investors both know that now is the time to buy Pavie and Angélus. And for you, the resulting supply and demand imbalance means fantastic potential in terms of capital growth.

 

SWAG

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As money-printing and inflation threaten to devalue the US dollar, diversifying your investment portfolio with Silver, Wine, Art or Gold—a collection of alternative investments that author Joe Roseman has dubbed “SWAG”—may be a very wise decision. SWAG has been described by Reuters as “real assets that just might outperform if official policy causes the money supply to surge.

While the country’s deficit continues to rise, investors frustrated by the performance of traditional markets in the last decade are turning to tangible assets. Physical assets like fine wine work on the simplest of economic principles: a limited supply and increasing demand, which has the effect of driving up prices. Unlike some traditional assets, these alternative investments come with no incumbent debt attached.

Alternative assets include coins, stamps and other collectables, which due to their detachment from mainstream financial markets have been used to diversify investors’ portfolios for centuries. A critical factor in the success of fine wines as assets is that their end consumer typically comes from the world’s wealthiest demographic. Unlike the majority of us, these consumers don’t depend on the success of the wider economy for their spending power. So-called “prestige asset” demand from China, still only in its infancy, is adding to the effect of super-rich consumers, and already the resulting supply imbalance has caused the case prices of certain châteaux to skyrocket.

Of all the alternative assets, wine has earned the greatest reputation for stability and low risk. This is largely due to the longevity, brand reputation, and strictly controlled production methods of First Growth (Premier Cru) Bordeaux, which have contributed to its history of consistent economic performance.

Why would a US investor—new to the fine wine commodity market—consider investing in wines held in the UK? The simplest answer is the liquidity of the UK market, which gives greater opportunity for high resale value. It’s also important to note that England has over five centuries of experience in fine wine storage, beginning in the time of Eleanor of Aquitaine (French wife of the English king Henry II) and continuing to this day with advocates like Baroness Philippine de Rothschild, owner of the Mouton-Rothschild Premier Cru. The Baroness Philippine believes British-stored wines taste even better than those stored in their place of origin in Bordeaux. The Queen agrees, and as a Westgarth customer your wine could sit alongside hers in Corsham Cellars, Wiltshire.

To assure ourselves of the viability and consistency of fine wine as an investment, we can only look to the past. A review of fine wine’s performance history reveals that this tangible asset has outperformed traditional markets, and so represents a valuable addition to your portfolio. But why invest in fine wine today? Joe Roseman predicts that financial uncertainty lies ahead of us, and in these challenging conditions, wine may just be your ticket to success.

No More En-Primeur for Latour

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Château Latour, one of only five Bordeaux estates to be ranked ‘Premier Cru’, announced a radical decision earlier this year to pull out of en-primeur (wine future) selling. This will make 2011 the last vintage ever to be released by Latour while still in the barrel.

A letter to the negociants explained that the owner, François Pinault—who also holds one of the largest contemporary art collections in the world—had taken the decision to retain Latour’s wines at the château until they were ready to drink.

Prompted by the need to address provenance (the history of a wine, including its origin and maintenance) in the world marketplace, Latour will not now release vintages until at least ten years have passed—thereby ensuring that they are ready to be consumed and can be sold at an attractive price.

Latour have pointed out the importance of minimizing or eliminating the travel time endured by their wines as they mature. Trading and transferring wines between different locations carries the risk that their quality will degrade, which could in turn damage the reputation of the Latour brand itself.

While Latour’s decision may well have been motivated by a wish to preserve quality, it could simply be that François Penault knows how to set up a great investment. Although some critics argue that being out of the en-primeur campaign will result in a lack of publicity and momentum that will damage the Latour business, many in-the-know investors—already aware of the value of SWAG to their portfolio—can see the shrewdness of Pinault’s decision.

There’s no doubt that some traditionalists—and investors—will feel a certain sadness at the loss of one of the world’s great en-primeur opportunities. However, Latour’s historic move underscores the extreme importance of provenance in today’s marketplace, as well as the wisdom of obtaining wines young and releasing them at their peak value.

 

 

Introducing the Westgarth Blog

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Latest news, information and insight into the world of wine investment.

The fine wine investment market never stands still, and luckily for you neither do we.

We spend a good deal of our time pouring over news articles, and keeping tabs on financial institutions and the most influential wine authorities.  This essential research keeps us up to speed with what is happening in the ever-changing marketplace, so that we in turn can give our clients accurate and effective advice.

We would like to share the fruits of our labor with you, in a format that is accessible and easily digestible.  Enter the Westgarth blog—a blog designed to empower you with the knowledge you need to invest in fine wine successfully.

Because the aim of this blog is to aid understanding, you won’t find unnecessary wordiness or jargon here. What you will find is the latest news, opinion and insight into the fine wine market, explained in a way that’s straightforward, informative and always engaging.

Stay tuned to this blog, and whenever there is a new market development relevant to fine wine investors, you’ll be one of the first to know.  We will also publish reports on the market every quarter, to give you a more detailed overview of current conditions.

Don’t forget that this blog isn’t the only way to stay up to date with Westgarth and wine investment news.  You can also follow us on Twitter, Facebook and LinkedIn.

To all new readers and followers, we’d like to say a big hello and a very warm welcome to the Westgarth blog.

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