by Wine Owners
Posted on 2022-05-20
Just back from the USA where I spent two weeks speaking widely to wine business owners. There are signs of a cooling off in the fine wine market. Even given the buying power a strong dollar confers.
The backdrop is a correcting stock market that’s seen its biggest sell-off since 2020. Unlike 2020, the drivers behind the correction are inflation and the threat of recession. In other words, it’s not driven by a market discontinuity, however persistent Covid proved to be. It’s driven by a fear of market fundamentals turning sour.
As far as blue chip Bordeaux is concerned - as far as collectible fine wine in general is concerned - we don’t yet know the impact of these macro economic factors, nor the impact of a shock to global food security.
But I’d wager there are a fair few highly leveraged buyers, and a lot more feeling considerably poorer than a month or so ago. However immune much of that market may be to cost of living increases, it is not unaffected by sentiment.
The similarities between Spring 2020 and now are striking, albeit the outlook as of early summer 2022 is less positive because it’s harder to look beyond the events that are driving market concerns. Lockdowns drove outsized wine sales. A recession will not have the same effect. A well priced 2019 campaign lit up demand. An overpriced 2021 campaign could douse it.
Meantime arbitrage opportunities in back vintages abound, which is why négoces are busy buying UK stocks and why US fine wine businesses are buyers: but with what intensity and for how long?
by Wine Owners
Posted on 2022-05-18
A long time ago there was a common response to the question "a glass of white wine? What type or style would you like?" That response was "ABC" - anything BUT Chardonnay! Please.
Frequently the affronted sommelier (or smart Alec host) would respond with "how about a nice little Chablis?"
"Oooh, yes please, we love Chablis!"
Oh, how we all laughed!!
The ‘ABC movement’ was brought about by mass market winemakers (and dare I say it, but a hefty percentage from the New World) rather over oaking the pudding. The combination of clumsily used oak, sometimes in floating chip form, a buttery malolactic character and with more residual sugar left in the bottle these heavy, almost sweet, (and obviously oaky) Chardonnays gained mass market popularity. The cognoscenti were appalled and, like anything that becomes over popular, and perhaps regarded as ‘common’, there was an almighty backlash. After all, well made, top class Chardonnays have always been treated to some expensive oak treatment, and when used judiciously, this produces wonderful depth, nuance and flavour.
All of this is very hard to imagine these days and as my colleague Luke argues, ABC should stand for ABSOLUTELY BANGING CHARDONNAY!
I dined with an award winning Australian winemaker last week who makes Chardonnays at every level, represented in, and all the way from, Aldi to Zafferano’s (probably not but I needed a good ‘Z’!). He tells me he simply cannot make enough of the stuff, at every level. Demand is massive. On top of that he runs a wine bar and restaurant in Western Australia for which he bought three pallets of white Burgundy from a local merchant. The same merchant begged him to sell him back some of the Burgundy at a higher price within weeks.
Climate change has led to some well documented problems for Burgundy producers, from frosts to extreme heat, particularly in the most highly prized Cote de Beaune. Winemakers are adapting their skills admirably both in the vines and in the cellars, but there is currently a shortage of fruit and quality wines from this area and obviously prices are rising fast. This is where Chablis comes in! Situated in the north of Burgundy, the slightly cooler climate and without quite the same gamut of superstar names being pursued, other than Dauvissat and Raveneau, wines from here can often be easier to find and possibly represent better value.
by Wine Owners
Posted on 2022-04-28
Chateau Bellegrave, Pauillac
I have just returned from a short three days in Bordeaux, tasting the recently crafted 2021 vintage. My tastings were not extensive, tasting mainly at negociants and the communal tastings with only a few Chateau visits, so this report is not comprehensive, but I aim to give a well balanced impression of my findings.
The weather last year was challenging, in some cases in the extreme. Frosts in the springtime, rains in May and June that led to mildew in July, but then a good late summer into harvest time. Vignerons had to hold their nerve to see if phenolic and alcoholic maturity could be achieved - would the grapes fully ripen? Some did, others did not and in this vintage, it boils down to the microclimates, what the winemaker did, and what luck they had, either good or bad. There are some very nice wines out there but too often we found wines without enough fruit, leading to little joy or charm.
Chateau d’Yquem, Sauternes
As is always the case, wines tasted at the Chateau showed more favourably than at the communal tastings. The wines are prepared more carefully and this year, as one representative admitted, the serving temperature was warmer than in recent years. Wines from the trio of ‘hot’ vintages preceding this one were generally presented at a cooler temperature to promote the idea of freshness as much as possible, but this year they were presenting at a slightly warmer temperature to promote the aromatics and give the fruit a chance to show. Some tasting conditions were just too cold and when they were, the wines did not show well.
2021s will offer something quite different from these recent, warmer vintages. Winemakers had to be careful with extraction to avoid bitterness from underripe pips and skins, and many wines will be approachable early. Tannin levels are lower, alcohol levels are down which is great, and acidity levels are higher, some too high. The key question to bear in mind is: will the bottle you open in a few years down the line have enough fruit and concentration? If it has you should be on to a winner.
For me St. Julien was the most consistent commune, and both the Barton sisters did a star turn. I will happily buy Langoa, very sleek, juicy, and moreish with Leoville a bit more serious. I heard Poyferré made a stunner, Las Cases less so. Beychevelle and Branaire Ducru were good and Lagrange and Talbot were both very decent, you could say reliable.
Chateau Giscours, Margaux
Margaux, Pomerol and St. Emilion were all over the shop, except for Canon and Rauzan Segla, surprise surprise, which were both exemplary!
Chateau Canon, St. Emilion
In Margaux, Labegorce Zede, and D’Isaan ran well. In Pomerol, La Conseillante, Certain de May, Hosanna, La Fleur Petrus all performed well and in St. Emilion, Belair Monange, Le Dome and Gaffeliere did a good job.
The powerhouses of Pauillac, I’m thinking the Pichons and Lynch Bages, not the first growths, demonstrated relatively good concentration but there were surprising disappointments too.
I didn’t taste at the very top of the St. Estephe tree, but the Calon stable showed well, as did Ormes de Pez.
Most communes were so varied that it is hard to say one is better than the other. Also difficult are vintage comparisons. There were bits of ‘14 in the good wines, touches of ’17, and I was reminded of ’04 in parts, the greener parts, and the parts that included the dry white wines of Bordeaux. Malartic-Lagravière was a delicious glass of tropical fruit salad and Domaine de Chevalier Blanc just pure class. As is often the case with weaker red vintages, the whites have done well.
The early developing Merlot was the weakest performing grape variety, in quality and quantity terms. More Merlot was lost to frost than the Cabernets, so naturally lower percentages than normal found their way into the final blends.
As ever, pricing will be important and given the economic headwinds this isn’t just about the wine. The secondary wine market is still travelling well, is in good health, but the primary market is a very different beast and it’s not a great vintage. Other than the much reduced 2019s there has been little point in tying up capital by buying en primeur across the board since the 2005 and 2008 vintages. There have been many specific wines that have worked well from other vintages, particularly ’15 and ’16 but en primeur has become a much more selective game and probably none more so than this tricky vintage but there are still some lovely wines out there.
Please look out for our analytics and comment on en primeur releases as they happen on the Jancis Robinson forum.
by Wine Owners
Posted on 2022-03-14
Nebbiolo Day returned to London on 3rd March, showcasing Piedmontese passion and prowess in all things Nebbiolo.
I used it as an opportunity to taste taste taste, side by side a variety of producers, crus and vintages and delve right down into why Nebbiolo is deservedly enjoying more and more attention from collectors. There was not enough time or oral capacity to taste everything on offer, so I focused on Barolo and Barbaresco producers and may have missed some gems from Alto Piemonte and Valtellina.
My main 3 takeaways were as follows:-
1) Langhe Nebbiolo should feature in everyone's home cellar for immediate consumption. Pretty much universally under £20 per bottle and in some cases difficult to separate from regular Barolo. GD Vajra, Diego Morra, Domenic Clerico and of course GB Burlotto 2020’s all stood out as high class efforts, as did Vietti 2019 (possibly because the grapes are all declassified Barolo….)
2) 2016 was something special. The vast majority of wines on show were from 2018, and the quality for the most part was high (exceptional in many cases) but 2016 has that something extra. The 2016’s on show simply just shone! .... do not miss and showed Nebbiolo at its absolute pinnacle. Giovanni Sordo Rocche di Castiglione, Brezza Bricco Sarmassa, Diego Morra Monvigliero were the highlights and still very much in their juvenile state. They are still cheap for what they offer!
3) Flagship wines generally lived up to the hype. It may sound obvious, but when you taste through a range it is always reassuring when the top name (and most expensive) delivers the goods, and in 2018 Piedmont, they do. Tasting notes like “Jackpot” appear in my notes by Paolo Scavnio’s Bric del Fiasc 2018, Brovia Ca Mia and pretty much everything on show by Pio Cesare (increasingly excited with more exclamation marks as you move up the range).
Finally, a special mention to for ArnaldoRivera, the largest cooperative of growers who have been producing consistently high quality wines in recent years, and whose “Undicicomuni” now boasts a selected blend of 21 plots (up from 16 when I last tasted pre pandemic). I like to think of it as NV champagne and a delight to drink. The single vineyard expressions on show were also stunning, both Rocche dell’Annunziata and Villero 2018’s..very exciting times for the group.
Thank you to Hunt and Speller for organising a well attended and vibrant event, I can’t wait for next year.
And Miles would like to add: there are still many 16s available at initial offer price, this vintage was EPIC and should be in everyone's cellar. Covid helped keep prices down… please load up, you will not be disappointed…. promise!
07375 594 196
by Wine Owners
Posted on 2022-03-09
Like traditional asset classes, the appalling events in Eastern Europe have cast a (tiny) bit of a shadow over the wine market. Unlike traditional asset classes this does not mean prices sharply falling, then rallying, and then yo-yoing up and down, repeating again if necessary, but a much more sedate and sanguine sitting back and taking stock approach. There is no wall of stock flooding the market and buyers have not just suddenly disappeared, they may just be exercising a touch more caution than before the outbreak.
The wine market has been enjoying a really good run for eighteen months or so but the exuberance witnessed in the run up to Christmas has calmed. Indices were still positive in February but trading has slowed a little and the gains are not so pronounced.
Major indices over a one year period:
My feeling is that the wine market has developed so much breadth in the last decade or so that it is less affected by global events than previously. Merchants and market makers are slower to mark down prices than before; they have survived Asian currency crises, the bursting of dot com bubbles and global financial disasters etcetera, etcetera and are better capitalised and have a wider audience. The volume and the diversity of the client base continues to grow which at this point in the wine market’s history is bringing more stability to underlying prices. As an asset class it offers probably better diversification than ever before and may even start to challenge Gold as a safe haven trade. The Kremlin’s gold reserves are well documented, and may be up for sale soon - luckily the same cannot be said about their fine wine holdings!
Factor that in with some supply issues (thinking drought affected Burgundy), supply chain issues (thinking Brexit amongst others), and rising inflation and I think wine is still a good place to be. We would definitely recommend looking out for cut priced opportunities if they arise and there’s certainly no reason to panic. Not yet at least!
And here's a look at the major indices over the last fifteen years:
by Wine Owners
Posted on 2022-02-03
As eagerly anticipated as the Sue Gray report, here it is, the annual WO round up and look ahead.
So, what happened?
2021 turned out to be a very good year for the wine market, the owners of wine and therefore for Wine Owners Ltd. also. Turnover on the exchange ramped up by 77% in 2021, producing more buying and selling opportunities than ever before! Our tenth year of trading is set to be an exciting one and has started well.
The broad based WO150 Index returned +15% with the stars of the show being Champagne and Burgundy, posting respectively +30% and +27%. Bordeaux returned a more modest 10% while Italy, having led the charge in 2020 came in with more modest numbers, yielding 6.5%. Tuscany performed better than Piedmont which was flat on the year. The Rhone did well, notching low double figures and the Rest of the World was twice as good as that, all thanks to California.
The reasons for the strength in the market were various; probably the biggest two were continued liquidity being pumped into the system in a low interest environment pushing more buyers into real assets, and the very real fear of inflation. Savings derived from staying at home more seems to have pushed up the spend on what people have been consuming at home – a quality driven drowning of sorrows in yet another lockdown!? The lifting of U.S. tariffs on some European wines brought a weight of new buying activity from across the pond, as did a lot of ‘new wave’ investment dollars - this should not be underestimated.
The market pre Covid had been largely stifled by various different factors but once demand started to outstrip supply, the market started to motor. Hong Kong and China were not responsible (for once) and collectively have been less of a force in recent times. Stringent lockdowns and border controls have meant very few visitors, especially of Mainland Chinese to Hong Kong, and an exodus of wealthy residents seeking a more liberated culture – some of the demand is moving elsewhere. Current thinking is that will last for some time (not just until after the Winter Olympics!), so be warned. I would expect Singapore to take up some of the slack and become a more prominent player.
I cannot remember Champagne ever being the star turn in the wine market before but given the cyclical nature of the market and the fact that the different regions are much more equal than they used to be, it is not surprising. It has also consistently delivered steady returns, see my report from last July, just before the market really accelerated. Reports of supply shortages coming out of the region and a slew of really good quality releases added further weight to the concept of Champagne as an investment proposition which led to some voracious buying activity. The Champagne Index is dominated by the biggest names and/or the tête de cuvée of noble producers. As ever, fine wine collectors and investors focus in on the most prized assets driving the gap between the seriously good and the seriously a little bit better than that ever wider. Here’s a good example, vintage Pol Roger ’06 versus the Sir Winston Churchill cuvée from the same year:
The ‘simple’ vintage Champagnes from good producers offer extremely good value to drinkers and is a segment of the market that has been left behind.
Where Champagne goes from here is one of the big questions as some of the recent returns have been enormous. Various vintages of Krug, Dom Perignon, Taittinger’s Comtes de Champagne, Pol Roger’s Winston Churchill have added more 50-100% in the last year and rosé Champagne has been bought in a way not seen before. I am tempted to take some profit from some of the biggest risers and look for some laggards.
The polarisation of the wine market and the premiums attached to the most desirable names have continued to grow and probably make less sense than ever before. Names such as Leroy, DRC and Rousseau in Burgundy have outperformed their neighbours and as highlighted in some of our recent offers, often trade at multiples of equally high scoring wines from the same vineyards but from less famous producers. Obviously, this creates opportunity and I feel more comfortable making bets at the prices that are a fraction of the big guys. Here is a comparison between Armand Rousseau’s Clos St. Jacques (light blue) versus Bruno Clair’s. This sort of chart can be repeated numerous times - premiums have become too large for my liking, but if Rousseau is your man and you have the cash….
The current shortage of 2020 red Burgundy and the general short supply frost hit ’21 vintage, see report from last November, will push prices and demand ever higher and whilst some price performances seem overly vertiginous, I anticipate they will continue their path – for now at least. High rollers love spending big on Burgundy and the small production levels really adds the glitter dust to this famous region. And there are always the producers that are beginning to make a name for themselves.
Bordeaux had a decent year, posting +10%. Apart from a brief flirtation with the 2019 en primeur release, Bordeaux has not been sexy for a very long time now. Market share continues to fall as other regions eat into the Bordelais’ gateau. It is still, and always will be, the largest slice of the market and those who buy into the general wine argument and need liquidity are best allocating here. It has become the steady Eddie. As a massive generalisation you know what you’re getting in your glass with a Bordeaux; a lot of that infuriating yet bewitching and beguiling wonder of what to expect from your wine just doesn’t exist in the same way that it does with Burgundian Pinot or Piedmont’s Nebbiolo and passionate collectors are just not quite so aroused by its charms (as I said, a generalisation!). I expect it to remain firm however.
Italy has had a mixed year. Super Tuscany has done well, the massive names of Sassicaia, Tignanello and Masseto have continued to shine posting average gains in the region of 25%, 35% and 25% respectively, and Solaia and Ornellaia also, but not so brightly. Lots of smaller Brunelli have fared quite well and this sector continues to build – hardly surprising given the price to quality ratio. Piedmont has had a mixed time, Monfortino in general is up a little in most vintages but lots of big names across the region have remained unchanged. I would not be surprised to see interest return to this area once Burgundy’s current run has blown through. There are still numerous 2016s looking very interesting for the longer term.
The Rhone valley is more appreciated than ever before. There are numerous cult producers all over Cote Rotie, Hermitage, Cornas with St. Joseph coming to the party nowadays. Prices of Rayas product from down south have travelled to the far north as collectors chase these rare treasures. White Rhone is still very much a speciality interest but one to keep an eye on. I have bought a lot of red Rhone for drinking from the WO platform in the last year or so as the combination of maturity, quality and price is virtually impossible to beat. There are plenty of names delivering superior returns too.
The Rest of the World
California has dominated the remaining regions with some ease, posting over 20%. Screaming Eagle has led the pack, followed by Ridge and Dominus. Australia has suffered at the hands of China’s tariffs.
I am confident the market will continue to perform well this year. Sentiment is strong, and supply in some key areas is shorter than usual, especially Burgundy. The inflation fear mentioned earlier is real and wine has been seen as a good hedge against this for a long time now. Interest rates are likely to rise but remain historically low and the real asset argument holds sway but will lessen as QE reverses – something to keep an eye on. Access to the fine wine market is greater than ever before, particularly in the U.S., and continues to grow.
As ever, I would be delighted to hear from you to discuss any of this, or anything else wine related. I am happy to help and advise on your portfolio or cellar, for investment or drinking purposes. And now we can go out again I would be delighted to share a bottle!
Miles Davis 02/02/2022
by Wine Owners
Posted on 2021-11-22
For a couple of days at least the world felt normal again as the English wine trade returned en masse to Burgundy for the first time in two years. How wonderful it was to be back was the most prevalent sentiment and ‘ooh, aren’t the wines good’ the most repeated phrase. The Burgundians are a little more patient than their counterparts from Bordeaux and wait for a little over a year, as opposed to a few months, after harvest to show their wines to the world, making en primeur tastings that much more informative, and pleasant, so here’s a quick review of Burgundy 2020.
2020 was another very warm and dry year but the range in temperatures between night and day and the ongoing improvement and knowledge of how to handle the heat meant the vintage is a good one, a very good one. The whole winemaking process is more scientific and exacting than ever before and the attention to detail demonstrated by some winemakers is incredible. Whether it is more work in the vineyard, including the lighting of candles in the vineyards at four o’clock in the morning to stave off potential frost (or not as it turned out for Cyprien Arlaud of the eponymous domain in spring this year), harvesting earlier, new technology and/or machinery including a million-euro bottle washer machine (at Domaine Lorenzon in Mercurey), or organic or even bio dynamic farming these guys are giving themselves every chance of making great wine whatever mother nature throws their way. It was noticeable that bio dynamic farmers reported less loss of crop due to frost than others as their plants are healthier – at least that is what they say! Another technique favoured by some to avoid frost damage is to prune closer to springtime whereas traditionally pruning of the vines took place in November. This means they can control budding more closely and not leave the new buds exposed for longer. This has helped some growers enormously.
The devastating frosts of earlier this year (2021), particularly for Chardonnay, will be discussed repeatedly during the impending 2020 campaign in January, as growers will be factoring their lack of supply for next year into prices for this. Apart from the odd pause for breath Burgundy prices have been on the rise significantly for well over a decade now and there is no reason to suggest this will cease anytime soon.
There is just something very special about Burgundy; it appears there are just more aficionados plugged into this region than any other. Perhaps it is because it offers so many world class wines in both red and white, from two of the world’s favourite grape varieties, that no other region can compete with it in quite the same way. Release prices are going up and wines in the secondary market will continue to rise. Demand for all top end Burgundy is insane but the supply shortages of white coming up are going to impact prices heavily.
In brief, the whites from 2020 were picked early and characterised by mineral driven intensity and focus, not quite as fleshy as ‘17s, but fresh and zippy and generous too. Red berries were smaller than usual, with thick skins producing wines of good concentration and structure, bursting with fruit flavour and with early picking acidity was maintained.
Producers visited: Domaine Sauzet, Domaine Lorenzon, Domaine Chavy-Chouet, Domaine Ballot-Millot, Domaine Launay-Horiot, Domaine Duroché, Domaine Henri Magnien, Domaine Georges Noellat, Domaine Thibault Liger-Belair, Domaine Arlaud Pere et Fils, Domaine Marchand Tawse
For me the standouts were Sauzet, Duroché and Arlaud.
Bottle of the trip: Chambolle Musigny, Domaine G. Roumier 2017
Take aways from the trip: The quality of Thibault Ligier-Belair’s Morgon and how few people in the wine trade have ever been to Beaujolais!
The epic combination of Epoisses and red Burgundy (apparently, it’s ‘a thing’ but we didn’t know).
Many thanks to Flint Wines for organising the itinerary and to Cuchet and Co. for driving. Nice to see Albany Vintners, Brunswick, Decorum Vintners, FMV, IG Wines and Uncorked.
by Wine Owners
Posted on 2021-10-25
On Wednesday Luke and I attended the Bordeaux Grands Crus Classés tasting, a group of Bordeaux Châteaux showing their 2017-2020 vintages in Dean’s Yard in sunny Westminster. Like most tastings there were more wines than I could do justice to, so I decided to taste the much hyped 2019 vintage from each Château rather than covering a range of vintages. Also I had tasted the 18s in situ and found them (massive generalisation coming...) too over blown and/or hot for my taste.
For those who need a quick reminder, 2019 was released in Lockdown 1 when fear was gripping the globe and the end of the world was nigh! It took a global pandemic for the Bordelais to offer us their wine en primeur at an attractive price and some discounts were in the region of 20-30% compared to the 2018 release prices. This brought about one of the busiest campaigns in a decade. The 2020 campaign was far less interesting as prices were largely back to normal and made it difficult to justify an en primeur purchase, especially when compared to 2019.
Samples were dispatched in little bottles to critics in all corners, some didn’t arrive and there were even reports of wines sitting on tarmac in the sunshine as delivery men kept their distance. Although there were issues that Covid had brought us, the resounding message was clear: it was a very good vintage.
And I am very pleased to report that it is indeed a very good vintage, in my opinion. Canon, Pontet Canet and Montrose all received ‘very well polished’ notes in my book. Mondotte was extremely good too, as was Branaire Ducru, Canon La Gaffeliere less so. Pavillon de Leoville Poyferre is a tidy second wine as is L’Hospitalet de Gazin.
Luke was more diligent than me, tasting across the vintages and he reported that 19s shone out in this peer group. More research is required but there must be some really good value 2019s out there and becoming physical in the next few months.
Side note: Montrose ‘05 disappointed, not for the first time. My views were supported by a prominent Bordelais character as we tasted side by side a couple of years ago.
Smith Haut Lafitte Blanc 2017 - very refreshing!
We are looking forward to tasting a wider range of 2019s at the larger Union des Grands Crus de Bordeaux 2019 Vintage Tasting in a couple of weeks time, and shall report back with our findings.
Miles 07798 732 543
Full list of Châteaux
Château Canon La Gaffeliere
Château Le Crock
Château Leoville Poyferre
Château Moulin Riche
Château Pontet Canet
Château Rauzan Segla
Château Smith Haut Lafitte
Clos de L’Oratoire
by Wine Owners
Posted on 2021-10-13
By Miles Davis
Welcome back, I hope you all had a lovely summer. I did not; being confined to UK holidays this year, I was devoid of any real sunshine, so thank the heavens for the wine market! The climate in the wine market is just about perfect at the moment; not too hot, but nice and warm with the odd blistering day. No storms around too, it’s just lovely, so we wonder how long this can last?
For this question, we turn to our history books; the major corrections in the wine market have come on the back of macro events. In the 70s it was the oil crisis (when the brewer Bass Charrington dumped hundreds of cases (of 12) of Mouton Rothschild at sub £100 a case, apparently), in the 80s it was the ’87 stock market crash, the 90s the Asian currency crisis in ’97, and in the noughties of course it was the ‘Credit crunch’, as we call it in the UK, the global financial crisis in other quarters. When these events happened, obviously long before screen prices were commonplace, panic selling ensued, and prices were marked down. In reverse order:
Some may notice I haven’t included the great sell off that commenced in 2011, lasting until 2016, the market falling c.30% in the meantime. That is because it was not a market wide phenomenon, it only applied to the red wines of Bordeaux, which admittedly, had been over 90% of the market back then. It is now 35-40%. Neither had it been caused by a macro event, but by the anti-graft campaign led by the new Chinese President Xi Jinping. This was also why it was a very long and drawn-out correction which, in my view, we are only coming out of now, a decade later. The ‘Red Obsession’ (did anyone see the film? A most enjoyable trailer can be enjoyed here. It could have been called ‘Top of the market’!) became the ‘Red Depression’ and Bordeaux was left languishing, casting a long shadow over the industry.
That depression had been caused by hyper price inflation (c.2005-2011), and a massive imbalance of supply over genuine demand. The explosion of one-tracked dodgy ‘investment specialists’ compounded this problem also. I am pleased to report that this market is not burdened with either of these same elements today.
There is a new wave of investor about, however, but a far more sophisticated breed. The type that conducts research, employs science, looks further afield than just the obvious and is making more and more of the market investible by helping to create a sturdier secondary market. The greater breadth and depth of the market is to be welcomed as this lends itself to a greater number of opportunities with a more diversified risk profile.
So, without the over-inflated price levels, except for Burgundy perhaps (but that is another story), without the cold calling clan, and with a more diversified market it will take a global crisis to slow this tanker down.
The old-fashioned tenet prevalent in the world of fine wine of limited supply set against ever increasing demand is back, and it is working well.
It is also worth noting that recent negative events, particularly the outbreak of Covid 19, only caused the market to draw breath rather than correct. I read this as another pointer to the market maturing; overpriced wines still go down but there is no need for sharp mark downs.
The Knight Frank Luxury Investment Index* received a lot of media coverage recently, reaching the national press; Decanter covered it here. Fine wine (+13%) outperformed other luxury assets such as watches (+5%), cars (+4%), art and jewellery but none of these numbers are overly demanding.
On a less macro level, Burgundy and Champagne are currently leading the charge but the Rhone, Bordeaux, most of Italy and the Rest of the World are all travelling nicely.
If you would like to discuss this, your own portfolio or anything else related, please feel free to call me.
Miles Davis, 07798 732 543
*Wine price data supplied by Wine Owners
by Wine Owners
Posted on 2021-10-06
By Miles Davis
Our Super Tuscan 80 index is up 8.4% over the last year and has proved to be a lovely warm place to be over the last five years, +67%. Before that it was largely flat as the graph below demonstrates. This is yet further evidence of how the wine market has broadened out as consumers and investors become more savvy.
In the last few years Sassicaia and Tignanello have been bomb proof. As discussed in our report at the beginning of 2020, they are brands that just ‘work’; they have a huge following in the U.S. and just about everywhere these days, the wines are investable, collectible and downright drinkable. They appear on a lot of restaurant wine lists too. Immediately recognisable, not too cheap (importantly) and not too expensive, they are very high scoring and offer sumptuous early drinking pleasure but can mature magnificently also.
Masseto too, ‘the Petrus’ of Italy, being 100% Merlot, has performed brilliantly, the 2015 and ’16 both up c.20% over the last year despite its £500+ a bottle price.
Ornellaia, Solaia and Guado al Tasso have been no slouches either, but the crown currently belongs to the aforementioned Sass and Tig, as they are known to their friends!
These names are the royalty of the Super Tuscan landscape, but some attention needs to be turned to the likes of Cepparello, Galatrona, Grattamacco, Redigaffi, Testamatta, and Tua Rita, amongst others… to be continued….
As always, please feel free to call to discuss.
Miles Davis, 07798 732 543