2009: The Year of the Chinese?
Wednesday 10 March
Last week UK wine trader, Bordeaux Index reported record sales in the Far East, with fine wine sales in excess of £8.1 million, representing a massive increased of 72% on the previous year. Not bad for a month’s work.
With the 2009 vintage tipped to be the greatest of the century, founder of Bordeaux Index, Gary Boom, said: “We fully expect the Asian market to invest heavily in this vintage, which will help continue to drive significant growth in the wine market in 2010.”
But hang on a minute, the Chinese haven’t really bought into en primeur before: buying wine that you can’t receive for another one to two years just doesn’t equate for many Asian buyers (they have a point, it is a bit strange when you think about it).
So I asked Geraint Carter, who also works at Bordeaux Index, why this year was any different to the rest.
“Well it’s certainly fair to say that precedent indicates a preference for physical assets in the Chinese/HK market,” he admitted. “That said we’re optimistic that this year will see a significant jump in participation for the following reasons:
1. They tell us they will – there has been plenty of firm interest expressed from both private and trade clients.
2. Level of familiarity/sophistication with the practices of the wine trade has increased rapidly. Good merchants with proper customer relationship and substantive infrastructure, as well as the efforts of the major Chateaux to raise their profiles.
3. Some of the recent surging demand from China/HK has been driven by investors, and there’s no doubt that the 2009 en primeur campaign will be a big attraction to those looking to speculate.
4. China is enjoying a period of very loose monetary policy. Assets have and will continue to attract capital looking for yields in this type of environment.”
They all sound like sound reasons but I’m just going to hang fire to see whether there’ll really be a massive shift in mentality from Asian buyers this year.
“Pass or play” in the 2009 Bordeaux bun fight?
Wednesday 24 February
The people at The Wine Investment Fund have stuck their necks out and claimed that the fine wine market is going to surge by as much as 18% this year. Of course they would say that wouldn’t they? But they don’t want egg on their face, so perhaps there’s something in it.
After the market plummeted in late ‘08, the fine wine market has indeed started to pick up again. Lafite ‘05 is now back up to £7,995 at Berry Bros and Rudd and sales director Simon Staples believes it’s going to continue rallying this year and should be up to £10,000 a case by the summer. It’s a pretty tempting prospect.
In its monthly newsletter, the gents who run TWIF, say, “in the second half of 2009 the main indices were up 11-14%. We expect this to be the start of a prolonged and rapid upturn which makes today an ideal time to be investing.”
But what to invest in? The much hyped 2009s will be on the market in May/June and it seems the world and his wife wants a case of Lafite and Mouton. London merchants Bordeaux Index reports the waiting list for the 09s is the longest on record (although I’m not sure that records began so long ago but it sounds impressive, doesn’t it?)
Perhaps it is time to get in and buy up lesser vintages. When the last ‘great’ vintage was on the verge of release (the 2005s, in case you’re not a fine wine geek), Liv-ex analysed the market and looked at unfashionable vintages. It reported first growth wines from lesser vintages had been overlooked and were a good investment prospect, particularly the 2001s and 2002s.
Interestingly they did the same thing in December 2009, asking whether we should “pass or play” on the 09s. From the data, it appears the 05s weren’t such great value for money after all…
“It is the comparatively lesser years of 2001 and 2002 that have shown the greatest returns, with both showing a price rise of 89% over the period. Indeed, the average price increase of all other vintages in the chart equals 63%; 18% higher than that shown by 2005,” said the Liv-ex report.
“In essence, the high price of the 2005 vintage sparked price rises among its lower priced peers. If the trend of four years ago is repeated, then 2006 and 2008 are likely to represent the best opportunities for investment.”
Maybe I should go out and get my hands on some first growths from lesser vintages rather than jumping into the 09 frenzy – it would certainly be a lot more civilised than entering the Bordeaux bun fight.
Good news at last!
Thursday 6 August
Good news doesn’t make the headlines; companies going under, buy outs and job cuts do - and there’s been plenty of that to write about in the past six months: Constellation and Diageo (among others) slashing the workforce; Foster’s selling off parts of its estate; Ehrmann’s and Playford Ros swallowed up by bigger outfits…I could go on but I won’t because there has been some good news reported in most of the major wine titles this week: The Sampler in Islington is opening two new branches.
Jamie Hutchinson and Dawn Mannis opened the store in 2006 and it has gone from strength to strength. Now, three investors have come on board, raising a cool £1 million to open two new stores in Kensington and Notting Hill.
The Sampler is not your average wine merchant. It has become legendary in wine circles for having 80 wines to taste on a charge card system. Buy some credit and away you go. The wines change daily and the last time I looked, they were sampling 1982 Penfolds Grange, 1942 Marqués de Murrietta Castillo Ygay and 1998 Ch. Latour.
Speaking to the pair for an article in decanter.com, they were both really excited about the prospects and hope to open the Kensington store before Christmas (for obvious reasons). They haven’t yet found a site in Notting Hill so it’s more likely the opening will come a little later. If things go well, they’d like to expand further.
It shows that if you do things right and think outside of the box, then you can succeed in hard times. As my dad always tells me, and reminded me when I decided to go freelance just as the markets crashed, ‘In adversity, comes opportunity’. He talks rubbish most of the time, but sometimes dads can be right.
Lanson, ‘99 claret and a pint of beer
Tuesday 23 June
I’m having a couple of days off after a 14-day working marathon but there’s still time to update my blog…
Champagne Lanson launched its new Extra Age Brut at Vinexpo and Wimbledon this week
The new blend has been release ahead of the company’s 250th anniversary in 2010 and, in keeping with the house style, hasn’t undergone any malolactic fermentation. It’s a blend of 60% Pinot Noir and 40% Chardonnay from Grand Cru and Premier Cru vineyards, and takes parcels from the 1999, 2002 and 2003 vintages. All the wines in the blend have undergone at least five years on lees and it’s incredibly yeasty, almost mushroomy.
My tasting notes said: “Round and developed. Baked apple, Christmas cake fruit, and almonds on the nose. Lovely concentration and definition in the mouth with fresh acidity.”
It’ll set you back fifty of your finest English pounds but I think that’s fair. I’ve been watching Lanson closely for the past year and they’ve been steadily upping their profile and have just launched a major consumer campaign. We’ll see if that translates into sales.
On a completely different theme…Here’s a quick update from the 1999 Bordeaux tasting on my last post. All participants were asked to mark their favourites with Ch. Latour, Lafite, Palmer and Lafleur coming out victorious with Ausone and Vieux Chateau Certan runners up.
Interestingly, two wines that were, in my opinion, spoiled by brettanomyces made it into the best value category (Gruaud-Larose and Haut Bailly). It seems that other people like that farmyardy aroma it gives off but it was way too overpowering for me. Perhaps I’m getting too pernickety – I blame this darn Master of Wine course.
Now, back to wee break: mostly getting sunburnt in Greenwich Park and drinking Deuchar’s IPA. Life is good.
.
Wine revolution
Tuesday 9 June
The world of fine wine is undergoing an internet revolution.
Fine wine trader Bordeaux Index launched Live Trade, a two way trading service for 60 of the world’s top wines two months ago, giving the public the power to bid and sell wine directly without a broker. The company claims it has recorded around £4m worth of trade in its first two months.
Now wine broker Fine+ Rare has launched a new web tool allowing users to value their fine wine collections and sell them at the click of a mouse. Users of the site can type in their portfolio to find out current market prices. It takes a 10-15% fee for brokering the wine if you wish to sell.
Hot on their heels is Berry Bros & Rudd. The London-based fine wine merchant is set to launch a new service that will allow customers to trade their reserves on the BBR site and set their own bid prices. Berrys takes a 10% fee from the sale.
So what does this all mean? The customer ultimately benefits from greater transparency of prices and gains greater control over buying and selling their own wines. The public have greater information than ever before about the quality of the wines on the market and their value.
However, this doesn’t mean the merchant is becoming obsolete. The public still need reliable advice and trusted avenues to buy and sell. Established names like Berrys, and Fine + Rare will continue to profit amid the proliferation of (sometimes untrustworthy) internet traders.
Let me know what you think about the changing face of fine wine investment.
Check out my Fine + Rare story and BBR article on decanter.com.