by Wine Owners
Posted on 2019-07-08
The highlight in June for the wine world was clearly the Daily Telegraph event ‘Wine; for profit or pleasure?’. A sell out crowd witnessed excellent talks from four leading experts from the wine world, including two of us from Wine Owners (Miles and Nick). Please contact us for a copy of the presentation.
Otherwise June was again tranquil with trade bobbing along just fine but with no particular surges or dips anywhere. Global stock markets enjoyed a rise after Messrs. Trump and Xi found some accord but this doesn’t seem to have inspired the wine market as yet! Wine stock levels are healthy amongst Asian traders so not even a continuing depressed sterling is bringing about much marginal demand from that corner although most indices are in positive territory in June.
The Bordeaux en primeur campaign came to an end with an almighty whimper. En primeur gets under the skin of the wine trade and all involved spend far too much time talking, writing and moaning about it…yet even so, I shall continue! Within the wine market(s) it has represented very poor relative value for a decade, prices are just too high, yet merchants don’t dare turn their back on this once great provider. It was a great system for all involved, including the man on the street. Now only a very few wines ‘work’ each year (whereby they make sense to the supply chain and the end buyer). And now, to compound the problems of high prices, the Chateaux have decided to retain more and more of their own stock. How this comes to market, when and at what price will fuel debate but based on the evidence of the mighty Chateau Latour, the market may just turn its back. The feeling of stock overhang may easily outweigh the feeling of short supply and it’s not as if the world is going to go thirsty, there will always be alternative choices.
If only our Italian friends came together with a synchronised offering, we could have a proper old school primeur market again. All the market players would have to be involved at the same time, jostling for position, scrapping over every six pack and would still be able to sell at a price that would make everyone happy. The hype that the merchants used to create in Bordeaux primeur markets, that we are still hungover from, could be regenerated. We all miss the hype and the excitement which created such fear amongst the white-faced, panic-stricken collectors and consumers who couldn’t possibly stand even the faintest whiff of FOMO (fear of missing out).
As it is, Italian releases come to market in no organised way and importers and merchants release when they feel like it. It’s all very Italian really but it does make buying easier. We have been acquiring some 2015 Barolo new releases from Fratelli Alessandria, whose reputation is markedly on the up. Prices are very reasonable for these high scoring wines, ranging from c.£35 per bottle for their basic Barolo (94 Wine Advocate points) to nearer £60 for their top cru, Monvigliero (96+). Outside of the very top group, Luciano Sandrone is another producer worth mentioning - consistently high scores at affordable prices. Their equivalents in quality in either Bordeaux or Burgundy would be far more expensive.
Piedmont is easily our favourite region at the moment, due to the demand/supply equation and the blue chips remain well bid. Whilst Bordeaux and Burgundy remain lacklustre, Champagne and Rhone have attracted some attention. There is no question we would recommend the brilliant 2008 vintage in Champagne and the recently released Sir Winston Churchill looks a good bet with the ’96 being double the price.
Please see the Blog for more articles about the wine investment market.
Also, any enquiries about my Professional Portfolio Management services are most welcome.
8th July 2019
by Wine Owners
Posted on 2019-06-10
Today we see the release of the 2010 La Rioja Alta Gran Reserva 904. At £195 per six and with years of maturation already in the bank, this wine represents terrific value, especially when compared to some of the recent en primeur releases from further north (Bordeaux). The 2010 has an absolutely massive Wine Owner’s Relative Value Score of 111, (see chart attached). Tim Atkin awards 97 points and comments “Savoury wild herb notes segue into a palate that's focused, balanced and graceful with the concentration and backbone to age. 2019-35”.
Purely from an investment perspective these wines only appreciate in price quite some time after release, when scarcity starts to kick in as demonstrated here with the excellent 2001 vintage (attached).
Conclusion: buy with a view to drinking but see what happens!
by Wine Owners
Posted on 2019-06-07
The wine market in May was completely dominated by Bordeaux en primeur. Overall the market is steady but lacklustre, ongoing concerns over U.S. and China trade wars and boring old Brexit rumble on and even a weaker GBP hasn’t managed to inspire substantially more marginal demand from USD based buyers. The secondary blue chip Bordeaux market is solid but a little stodgy. The bids are there but nothing much is moving north. As a result it is little surprise that merchants’ 2018 Bordeaux offers, backed by some exuberant critic’s reports and scores, have been flooding the inbox.
For our Bordeaux 2018 ‘in a nutshell’ report on the 2018 vintage, please click here.
Obviously the more exuberant critic reports and scores, of which there are (too?) many, have been the ones used by merchants and their sales teams. Julia Harding MW, of JancisRobinson.com, provided the reviews most in common with our own team’s appraisal and her scores are more subdued than others. She lends perspective to a vintage that we do not regard as highly as 2016 and one that may turn out to be overblown in some quarters. Antonio Galloni of Vinous Media is another commentator in the less exuberant camp and we look forward to his colleague Neal Martin’s commentary when it arrives (Neal did not taste en primeur this year due to ill health – we wish him a full and speedy recovery).
A very important point regarding the ’18 vintage, largely ignored by the salesmen and one I would like to repeat, is that whilst certain wines are very impressive, incredibly concentrated yet well balanced, they are really, really BIG. Nearly all of the alcohol numbers are between 14 and 15%. The poor unsuspecting punters may get quite a shock when they sit down, sometime from now, to enjoy their excellent claret only to discover they have something they weren’t quite expecting in their glass!
It'll be fascinating to see how the wines from 2018 develop as wines, but also from a market perspective. The Chateaux are holding back more and more wine every year and in some cases, releases are up to 50% lower than last year. Will this drive some scarcity seekers to market or will it have the opposite effect of creating a nervy overhang? It is fair to say that so far, Latour has not exactly flourished since retreating from the age old system. En primeur to my mind, apart from a certain few every year, has not made clear financial sense for years and few releases have come close to our ‘proto-prices’ (where the price needs to be to make clear financial sense to buyers), more here on JancisRobinson.com.
Successful releases so far include: Calon Segur, Canon, Carmes Haut Brion, Lafleur, La Mission Haut Brion, Leoville Las Cases, Pichon Lalande, Pontet Canet and Rauzan Segla. The majority of releases have not sold through.
In other areas there is still plenty of demand for high end Burgundy, it’s just that the prices that are being achieved by sellers are well below advertised levels. Piedmont is in good health but in low supply, a good thing for holders! Champagne holds firm, so do Super Tuscans.
by Wine Owners
Posted on 2019-05-13
This time of year in the wine trade is always dominated by the Bordeaux en primeur circus. Please see our 2018 ‘In a nutshell' report here. It’s strange really, as en primeur has not made commercial sense for the legions of the swirling and spitting wine trade, let alone the man on the street, for very nearly a decade. En primeur business has shrivelled like a drought savaged grape over the years and there are only a handful of opportunities each year that really make sense. At the time of writing only a few releases have made sense according to our ‘proto-pricing’ (please see jancisrobinson.com), Branaire Ducru, Duhart Milon and Quinault L’Enclos. Palmer sold out quickly (at 2,880 per 12), partly due its rarity (see blog), but also because they have built their brand so brilliantly under the guidance of Thomas Duroux. As a result, Palmer has a strong en primeur following.
In general, the Chateaux are releasing less than ever this year which makes this game ever more senseless. According to one highly experienced trade legend EP is all about building the client base for merchants and clearly the avalanche of similarly persuasive e-mails work to some extent. Experienced wine players are highly selective in the EP arena and returns in the short to medium term are very far and few between. Real scarcity is where it’s at, if you’re hoping for rising prices, and that doesn’t come from en primeur.
| || Level || Month || YTD || 1 Year || 5 Year || 10 Year |
| WO 150 Index || 303 || -0.6% || -2.0% || 6.4% || 57.4% || 83.3% |
| WO Champagne 60 Index || 462.61 || 0.9% || -1.3% || 5.0% || 68.4% || 154.9% |
| WO Burgundy 80 Index || 691.36 || 3.7% || -2.0% || 25.7% || 142.1% || 233.2% |
| WO First Growth Index 75 Index || 276.71 || -0.5% || -2.0% || 2.6% || 45.5% || 71.2% |
| WO Bordeaux 750 Index || 340.71 || 1.0% || 1.7% || 6.3% || 57.5% || 100.3% |
| WO California 85 index || 669.86 || -0.1% || -0.4% || 15.4% || 106.4% || 309.9% |
| WO Piedmont 60 Index || 318.83 || -0.3% || 0.9% || 9.2% || 75.6% || 126.4% |
There were no new themes detected over the month and scarcity is still the biggest driver. Interest in Piedmont is still firm although the monthly movement of the index would suggest otherwise. The same can be said of Burgundy, which is still active but is trading below advertised offer levels, with buyers negotiating harder.
Brexit concerns seem to have been put on hold for now, more through ennui than anything else, which led to some increased activity from U.K. private clients but overall the market trundles along rather than powering up. It’s a time for gentle accumulation on the bid side of the market.
As an aside; several collectors have approached us about reviewing their cellars, mainly to consider what holdings are investment grade and which are not. This has led to most people making the realisation their collections lack structure. The combination of our expertise and the technological support from the platform is proving to be very valuable.
by Wine Owners
Posted on 2019-04-30
Research does not come any easier than looking at Krug 2004. Vintage Krug is an investment stalwart and the long-term numbers tell us it is a consistent performer. So, you key in the various available vintages into Wine Owners ‘Relative Value Analysis’ and ’04 comes out as THE pick of the bunch:
Then you read the tasting note from Antoni Galloni:
Krug's 2004 Vintage is absolutely mesmerizing. Layers of bright, chiseled fruit open up effortlessly as the wine fleshes out with time in the glass. Persistent and beautifully focused, with a translucent sense of energy, the 2004 captures all the best qualities of the year. Moreover, the 2004 is clearly superior to the consistently underwhelming 2002 and the best Krug Vintage since 1996. Readers who can find it should not hesitate, as it is a magical bottle. 97+
Simples! But, as ever, it is not quite as simple as that; if we compare the returns over the last twelve months, performance across the vintages is far from consistent:
It is difficult to explain the variances, especially the ‘98 but I take heart that the 2004 is yet to perform positively. It was a decent size crop and clearly there are plenty of merchants still holding their allocation but this means there is still time to accumulate before it starts appreciating – and it most certainly will! This is a buy on a long term basis.
by Wine Owners
Posted on 2019-03-25
The basic premise for investing in fine wine is a very simple one; you buy a truly great wine that is produced in a finite quantity and store it, carefully. So, whilst others are enjoying/drinking theirs, thereby reducing the supply of that wine, you enjoy the price appreciation that naturally results from the increased rarity value. The growth in global wealth and newly discovered riches help fuel the desire for these wines for added benefit. For example, Chateau Latour 1982 was released in 1983 at c. £400 per case of 12 bottles. That case could today be sold for £16,000, implying an annual growth rate of a little over 12% per annum over the course of its life (and it will continue to be enjoyable for another 50+ years).
So, it is easy then?
First a bit of background.
The investment market is dominated by the red wines of Bordeaux where production levels of top-quality wine far exceeds any other area of note. Other areas which spark interest include the finest wines of Burgundy, Champagne, Tuscany and Piedmont and to a lesser extent some of the trophy wines from the new world.
For decades, centuries even, ‘gentlemen’ have been investing in wine, maybe unintentionally, but certainly filling their cellars with good Bordeaux and Burgundy, Port and Madeira and the like. Auction houses commenced wine sales in England in the middle of the last century and now there are all manner of brokers, merchants, exchanges and on-line auctions in existence. The internet has lent transparency to what was an opaque market, brought an endless flow of information and with it various offerings from a wide range of ‘investment specialists’. Investing in wine has become a more commonplace activity. Very few of these specialists, however, are authorised by the FCA or an equivalent and, thanks to the great bull market of 2005-2011 a proliferation of new companies designed to take advantage of this phenomenon were formed.
Like all markets the wine market continues to evolve although the last decade has proved to be probably the most turbulent period in its history. Previously, wine price performance was generally very steady with long term returns going back to the seventies averaging just over double figures. Once a decade or so, a global crisis would cause a healthy reality check (the oil crisis of ’73, the stock market crash of ’87, the Asian currency crisis of ’97 and the Lehman debacle of ’08, although the latter turned out to be very short lived) and then things would revert to normal.
The great bull run that begun in 2005 was created by exceedingly high and new demand emanating from mainland China. The fast expanding Chinese economy created easy money that flowed through the hands of the relatively experienced Hong Kong based merchants all the way to London, the global centre of secondary market wine trading (the primary markets being located at the point of production). Prices were pushed higher and higher, no one wanted to sell as the value kept on going up, until one day it all stopped.
What had not been appreciated at the time, by either the market or its participants was that this money was not just coming from the newly wealthy and aspirational individual but mainly from officials and employees of state owned enterprises.
Their ostentatious extravagance was legendary – lavish dining in top class restaurants and hotels accompanied by lashings of fine first growth wines, the corporate gifting of wine that oiled the wheels of business and the need to be seen only drinking the very best.
The government had lost control – and that was not going to wash with the incoming new President, Xi Jinping. In mid-2011 all luxury items and their markets were knocked back as the new environment of anti-graft measures were introduced and these measures remain firmly in place today. Having risen c. 260% from ’05 to mid-2011, the Liv-ex 100 index, the leading market indicator, then fell by 36% between mid-2011 and mid-2014. Since then the market has stabilised and in recent weeks has started to appreciate once again. The natural order is returning, and the madness of this extraordinary period has receded, the river of cash from China has dried up and a lot of the new, often dubious, players have been washed up on that river’s banks.
Another major factor that came into play during this period of flux was the stratospheric pricing of two Bordeaux vintages of outstanding quality, 2009 and 2010. Not wishing to miss the party the Bordelais lost their heads; 2009 sold but the market just couldn’t stomach the prices from 2010. Subsequent vintages were not reduced to commercial levels and have also failed to sell.
Some readers will be familiar with en primeur, meaning the first release, which is the first opportunity to purchase wine from the new vintage. In the good old days this was the opportunity to get in on the ground floor and the majority of investors and consumers benefitted. That game is long gone and arguably the market has split between the recent vintages where the release price still influences and the older vintages where the secondary market controls pricing. The market for older wines is, in any case, more compelling as pricing is more logical, there is greater assurance of quality and the dwindling of supply has begun.
Opportunities abound, especially now we are ‘ex-China’. Pricing has never been more competitive and the information available have never been so sophisticated. So, yes, it is easy – if you know what you are doing!
Miles Davis, February 2015
by Wine Owners
Posted on 2019-03-14
2007 £1,300 per 6 WO Score 96
2010 £2,100 per 6 WO Score 100
Bartolo Mascarello is one of the true legends of Barolo, think Rousseau or Roumier in Burgundy terms, in case you’re not familiar with the ‘Knights of Nebbiolo’. And if that’s still confusing, think Liverpool (Football Club), but I would say that, wouldn’t I? In fact, to be drawn against Juve tomorrow morning could easily inspire a trip to Piedmont, with a bit more than hazelnuts to look forward to! I digress…
Maria-Teresa Mascarello took over from Bartolo, her father, in 1993, the estate having been founded in 1918. Beautifully simple in its creation, the wine is a blend of four of the top crus, or vineyards and has been consistently and spectacularly successful for decades.
In the charts above and below we have compared various well-regarded vintages of a similar era. These vintages are very good and very scarce, two of the most important factors for investors as they are squirreled away by the canniest collectors and prices have been rising. They are still a fraction of their Burgundian cousins however and we have no issue with recommending a buy, particularly the ’07 and the ’10, the cheapest relative value bets here:
Tasting notes, courtesy of Vinous Media:
2007: Mascarello’s 2007 Barolo shows just how compelling this vintage can be, even now. Sensual, layered and totally voluptuous in the glass, the 2007 shows the more flamboyant side of Barolo. I find the wine’s voluptuous, engaging personality impossible to resist. Sure, 2007 is not a classic vintage, but when a wine is this good, I say: Who cares?
2010: The 2010 Barolo is one of the most striking, hauntingly beautiful wines I have ever tasted here. Mysterious and slow to show its cards, the 2010 impresses for its inner perfume, sweetness and exceptional overall balance. Today the striking fruit and classic, austere elements of the vintage take turns in dominating the wine's balance. The 2010 was always magnificent in barrel. It is equally spectacular from bottle. Readers who can find the 2010 should not hesitate. Ideally I wouldn't dream of touching a bottle until age 15 or so, although I doubt I will personally have the discipline to follow my own advice!
The 2007 is the cheaper option from a classic vintage and the 2010 is the turbo charge version from the all-conquering 2010 vintage. Both are recommended.
by Wine Owners
Posted on 2019-03-07
February was a relatively quiet month for the wine market. The month started with the Chinese New Year celebrations which meant Asia was quiet and it also contained a European half term break. Sentiment towards Brexit turned, meaning GBP strengthened towards the end of the month, which is never good for the wine market as US$ based bids (U.S. and Asia) automatically adjust downwards. The broad base WO 150 index fell by 2.4%, as did our Blue Chip Burgundy index. In fact, all the indices for the major wine producing regions came off by c.3%.
If recent discussions with the finance and new venture folk surrounding wine as an alternative asset class were anything to go by, this is beginning to look like a good time to buy. Following the Brexit inspired rise of USD and Euro against GBP in 2016, the Bordeaux market has done nothing for almost a decade. ‘Bordeaux bashing’ peaked years ago too - just resentful shrugging goes on these days! En primeur looms but is largely a dead duck, so that is unlikely to provide stimulus to the market but a wall of money certainly might do the trick… watch this space!
We were busy trading 2009 red Bordeaux following various reports published after ‘ten year on tastings’. We blogged about these in general and focussed on one wine separately, Cos d’Estournel. We concluded that, as it continues to split opinion, and received some pretty low scores (93 from Jane Anson of Decanter for example), coupled with challenging price levels why take the risk when there are so many less controversial and comparatively cheaper wines available? There are many names still available on the exchange, from the excellent Cantemerle at c.£300 to Haut Brion and Mouton Rothschild at the cheapest in the market prices.
If you’re looking for decent ‘drinking’ claret buying en primeur made very little sense even back in 2009 which blew apart every previous record ever held for wine sales, anywhere on the planet. Factoring in the cost of storage and capital and the effect of inflation, the very respectable names of Cantemerle, Capbern Gasqueton, Haut Bergey, Lafon Rochet, Ormes de Pez and Potensac are all better value today than they were then! All these names are available on the platform today.
Sassicaia was in focus with the release of the much admired 2016 vintage, Monica Larner of the Wine Advocate awarding the full 100 points and meaning Armit, the UK agent sold out in seconds.
Screaming Eagle ’16 was released and is now offered at £7,250 per 3 bottles in the U.K. market. Not altogether surprisingly, this is making some older vintages looking relatively cheap! The ’17 will not be sold under the usual label due to smoke taint from the Californian wildfires.
And finally, we learnt the sad news that Gianfranco Soldera passed away in the middle of the month. We are planning to honour the magician of Montalcino with a memorial dinner later in the year, possibly in May.
by Wine Owners
Posted on 2019-03-07
In terms of reputation Screaming Eagle is the ne plus ultra of American wines, the equivalent of Petrus on the Right Bank, Romanee-Conti on the Cote de Nuits and Conterno Monfortino in Piedmont.
The prices of the wine varies from £2240 per bottles up to £2600 per bottle for the vintages of 2009, 2011, 2012, 2013 and 2014, but over the last two years it has been the 2009 and 2011 that have made the greatest gains, with 37.9% and 42.7% respectively. Double digt growth seems to be the norm on a CAGR basis.
The 100 point vintages of 2010 and 2007 are roughly £3600 per bottle, and have gown at a slower rate in the last two years, suggesting again that there is better vakue to be had in the 97 to 99 point bracket currently.
Current market levels puts the 97 point ’09 at £2602 a bottle and the 94 point ‘11 at £2461 per bottle. These prices are at a premium of £350 and £200 respectively to the 97 point 2013 and 98 point 2014, which would seem a little illogical. Hard to see a justification for a discount for equivalently scored wines. As the chart below shows, the 2011 in particular seems over-priced and the more recent vintages would seem to offer greater upside potential.
Trying to compare Screaming Eagles with other US wines is a rather thankless task as it operates on a different pricing level entirely to every other wine in California. There are several things you can say about it in isolation, however:
- There is no vintage values at less than £2000 a bottle, and many tip the scales at over £3500 per bottle
- Three pack OWCs are the norm – almost all stock available comes in this format
- It has the highest average Parker score over the last twenty years of any wine in the world except Conterno Monfortino
- No more than 700 cases (12 pack equivalent) are made in any vintage.
It would seem logical to suggest for the medium to long term that younger, higher point scoring vintages offer the greatest potential for capital growth. Not for the faint hearted, of course, but the fundamentals of extremely small production, a style that will see each vintage improve for a minimum of 25 years form bottling and a brand that has cemented itself as the epitome of great modern Californian wine making make this a wine that needs to be considered very seriously as an unavoidable component in any top drawer cellar…
by Wine Owners
Posted on 2019-02-19
Price: £32,000 per 12
WO average score: 97
Robert Parker: 98
Neal Martin: 98+
There is a compelling case to be made for Petrus ’98. Petrus is Petrus and trades in a rarefied right bank bracket, with the only other occupant being Le Pin. Their following is immense, with prices to match yet these have now been sustained for decades. These are properly premium wines.
’98 was very much a right bank vintage and only 2,400 cases of Petrus were produced compared the normal 4,000. The wine is now approaching its prime and satisfies the most important of current investment criteria, namely scarcity, in spades.
Some of Neal Martin’s (admittedly more exuberant) notes:
"The 1998 Petrus is the best Right Bank of the decade and here, against the 2000 and 2001, there is no contest. The aromatics are a masterclass of control and precision, yet it is also one of the most intense bouquets that has ever been produced at the estate. This is a "complete" Petrus that is magnificent in every department."
It makes one wonder why it has not been accredited the full 100 points but maybe Neal has reverted to being more conservative in his scoring having left WA? Parker and Robinson are equally effusive about the wine at various points over the course of its development, but Martin’s notes are by far the most recent. The slightly ridiculous premium that the 2000 vintage enjoys means that Petrus ’00 currently trades at £45,000 per 12. It is interesting to note that since the summer of last year the ’98 has begun to outperform the ’00 and both the WO150 Index and the WO Bordeaux Index. We think this is set to continue.
The tasting notes and the scarcity together with the more regular analysis of MPS (market price versus score) and RVS (relative value score), as viewed in the charts above and below, further the investment case.