by Wine Owners
Posted on 2020-11-23
Krug is, surely, a Champagne that needs no introduction.
In all likelihood it is the first name to enter one’s head when considering the top names in the prestige Champagne bracket. It was the first thing I sought out on receipt of my first proper bonus! There are others obviously but Krug has carved itself a special niche of its own.
Krug, founded in 1843 produce a range of different cuvées ranging from the Grande Cuvée for everyday drinking (!) to the Clos d’Ambonnay for that very, very special occasion (at £2k+ per bottle it should be at least a very good excuse!). Here we are looking at Krug’s Vintage Champagne over some of the best vintages of the last two decades.
First, the market prices and scores:
And now the relative value score:
The mega vintage that is 2008 has not yet been released, so in the meantime I have no hesitation in recommending both the ’04 and the ’06 as very solid buys for the long term.
Banner Image: www.krug.com/the-house-krug
by Wine Owners
Posted on 2020-11-12
Miles Davis, Wine Owners November 2020
There is not much to report on for October. The market continues to be very steady, gently rising in fact, and lacking in volatility – we are leaving that for the traditional asset classes and for those with a strong constitution!
The Covid related news had been sending shivers down the spines of stock markets as we here in the UK were heading into our second full lockdown of the year, only for that to turn around swiftly on the good news on vaccines.
The platform was busy in October, however, with good demand from Asia. Bordeaux indices have even been positive although overall market share remains weak. Sterling had been a little weaker during the month and this normally speedily converts into demand for Bordeaux blue chips from Asia. We have seen continued demand for Italian wines and Champagne with red Burgundy more mixed. Top end white Burgundy priced sensibly soon disappears from the platform and liquidity in this sector is perhaps stronger than it has ever been.
Champagne is the focus of the month and there could even be unprecedented Christmas demand this year if lockdowns ease and families and friends are once again allowed to socialise!
The recent release of Taittinger’s Comtes de Champagne 2008, which receives a fabulous write up from William Kelley of the Wine Advocate and 98 points, was met with great interest. There’s plenty of supply right now but given time there is plenty of room for price upside given the level of the ’02 now. Here is the relative value chart:
Obviously ’06 is the cheapest here but that, nor the ’04 vintage, quite carries the same stature of the fabulous ’02 and ’08 vintages. Having said that and given the quality of the juice we are talking about, Relative Value Scores at 30 or above look good in any book!
Generally speaking, I like the lower production levels of Pol Roger’s Winston Churchill Cuvée. In fine wine terms, Dom Perignon and Cristal produce vast quantities but are truly international brands and therefore trade at premiums to other names. Comtes falls somewhere in between.
Here are some price and point comparisons of the names discussed here, from really good to excellent vintages.
Overall, I would not put anybody off buying these wonderful wines for the medium to long term, they have years of life ahead and plenty of upside potential as they become rarer and rarer – and more golden!
| || Vintage || Price || WA Score || Price/Point (WA) || VINOUS Score || Price/Point (VINOUS)|
| Dom Perignon Champagne || 2002 || £127 || 96 || 1.32 || 97 || 1.31|
| Dom Perignon Champagne || 2004 || £107 || 92 || 1.16 || 95 || 1.13|
| Dom Perignon Champagne || 2006 || £108 || 96 || 1.13 || 95 || 1.14|
| Dom Perignon Champagne || 2008 || £110 || 95.5 || 1.15 || 98 || 1.12|
| || || || || || || |
| Louis Roederer Cristal Brut || 2002 || £213 || 98 || 2.17 || 94 || 2.27|
| Louis Roederer Cristal Brut || 2004 || £160 || 97 || 1.65 || 96 || 1.67|
| Louis Roederer Cristal Brut || 2006 || £130 || 95 || 1.37 || 95 || 1.37|
| Louis Roederer Cristal Brut || 2008 || £158 || 97 || 1.63 || 98 || 1.61|
| || || || || || || |
| Pol Roger Cuvee Sir Winston Churchill || 2002 || £167 || 96 || 1.74 || 96 || 1.74|
| Pol Roger Cuvee Sir Winston Churchill || 2004 || £127 || 95.5 || 1.33 || 93 || 1.37|
| Pol Roger Cuvee Sir Winston Churchill || 2006 || £117 || 95 || 1.23 || 96 || 1.22|
| Pol Roger Cuvee Sir Winston Churchill || 2008 || £140 || 97 || 1.44 || 95.5 || 1.47|
| || || || || || || |
| Taittinger Comtes Champagne Blanc de Blancs || 2002 || £166 || 98 || 1.7 || 97 || 1.71|
| Taittinger Comtes Champagne Blanc de Blancs || 2004 || £96 || 96 || 1 || 96 || 1|
| Taittinger Comtes Champagne Blanc de Blancs || 2006 || £73 || 96 || 0.76 || 95 || 0.77|
| Taittinger Comtes Champagne Blanc de Blancs || 2008 || £117 || 98 || 1.19 || 96 || 1.22|
by Wine Owners
Posted on 2020-10-06
Miles Davis, October 2020.
Given the lack of relatively significant news in the wine market, this is the first report since early in the second quarter of the year.
In fact, it is fair to say that the world of fine wine has been relatively boring, and in this world, boring is good! The lack of volatility has been impressive. The WO 150 index has (rather surprisingly) posted a gain of c.%5 this year but that should come with the caveat that the constituents are older vintages and not the most liquid.
In the aftermath of the 2008 financial crisis, the major wine indices (predominantly Bordeaux led) fell sharply (c.25%) as market players and stockholders marked down prices, desperately trying to reduce inventory. The relative newcomer, China, was busy buying all the Bordeaux it could at the time and was presumably a little surprised by this sudden easing of prices – after all, what did wine have to do with the financial markets??
Anyway, Bordeaux prices rebounded quickly and from early 2009 to mid- 2011 witnessed one of the biggest rises in prices this market has ever seen, followed by a sustained bull run for, the recently discovered by China, red Burgundy. Unlike 2008, the Covid-19 infested world of 2020 is yet to lead to a global banking crisis, but the economic effects will surely be felt for some time and some easing of prices would not be surprising; yet in the world of fine wine prices are not being marked down, and the indices are largely flat. There is no panic and this is good. As you would expect, liquidity isn’t great, spreads are wider, and there aren’t many merchants buying for stock. Overall, the volume of wine (number of bottles) traded has increased although there are widespread reports of the value being lower – hardly surprising.
Here’s the WO 150 vs. the FTSE in the last ten years:
Other than a reasonably successful 2019 en primeur campaign, of which more later, Bordeaux has maintained its trend of recent years - its market share continues to slide. In August it hit a new all-time low of 35%, according to our friends at Liv-ex. Ten years ago that number was 95%! It is still easily the most liquid market, however, and that should not be forgotten in times of stress. Lafite and Mouton Rothschild still dominate Asian demand but long gone are the days when the prices just kept on rising; they are flat.
The 2019 Bordeaux en primeur campaign was highly unusual, in many respects. Not only did it happen in lockdown, it happened, apart from the locals, without any but the top wine journalists tasting any of the wines – unheard of! We decided to listen more to Jane Anson (Decanter) and James Lawther (jancisrobinson.com), both based locally, than other international critics after reports of samples being abandoned on melting driveways and being flown around the world in a rush; it just seemed more prudent. The consensus, however, or whatever, was that it was another fabulous vintage and even came out with the highest average scores in fifteen years – no mean feat. The other strange thing that happened was that some Chateaux priced the wine attractively. Prices needed to be 20-30% below 2018 prices to sell through and some were. The leading names for relative value and quality were the Lafite (including L’Evangile) and Mouton stables, Pontet Canet, Palmer, Canon and Rauzan Segla. The campaign came as a much-needed boost to Bordeaux’s flailing reputation, but it took some extreme circumstances to bring it about. In terms of wine, Bordeaux is doing nothing wrong, it is the pricing that is the issue.
The super-fabulous-amazing 2016 Piedmont vintage has been dribbling into the market, some via the grey market European trade and some from agent releases. Given the general mood, these have been easier to accumulate than in a non-virus savaged world and without an organised primeur release. Who knows how well these wines would sell if you had all the merchants shouting their virtues from the rooftops at the same time? Three wines, all with 98 points from Monica Larner that make sense and that I have bought are: Cavallotto Bricco Boschis (£260 per 6), Elio Grasso Gavarini Chiniera (£375) and G.D. Vajra Bricco delle Viole (£360). Luciano Sandrone’s Le Vigne 2016 was awarded the magical three-digit score (ML also) which sent the price from c. £550 to £1,250 before settling at around £1,100 now. From the same estate, Aleste (formerly Cannubi Boschis), with a mere 98 points, makes sense at £650. The official U.K. release from Roberto Conterno will be in October and although they are not yet scored, I have been accumulating in the grey market. They have decided not to make Monfortino in ’16 as it’s not the right style (!!??), which can only leave Cascina Francia as one of the buys of the decade, but what do I know?
As readers know, I am a keen fan of Italian wines for the portfolio, particularly Piedmont and Tuscany and wines from here can easily take greater supporting roles. The lead roles of Bordeaux and Burgundy have never felt more questioned. Super Tuscans are well developed in terms of the market and continue to do well, other Tuscan wines to a lesser degree. 2015 and 2016 were epic years in Tuscany, as we already know, but the ‘16 releases of Brunello are still to come and there will be opportunities ahead.
This interplays with the theme of new areas becoming more accessible and more interesting. The rise of the new world continues gradually as the depth of this market grows. Wine knowledge is on the up, price transparency and trading channels are ever more abundant, so competition from other areas is bound to increase. Quality from everywhere is on the up and the international market is flourishing.
The Champagne market deserves more on the limelight too. Here is the ten-year chart of the WO Champagne 60 index, a smooth 9% annualised, with barely a bump in the road:
Burgundy is in a funny place right now. The froth has definitely been blown off the top end of the market, even before the pandemic struck and the usual suspects do not just fly out of the door anymore. There is still demand for DRC, but it needs to be in OWC. Buying is to order, not for stock, and prices need to be sharp to attain a sale. The performance of collectable white Burgundies has been greater than their red counterparts recently and this is a very interesting area. Buy top quality producers at an early stage and do not hold on too long – the fear of premox has not disappeared entirely!
Keep an eye out for South African wines, mainly for the drinking cellar at the moment, but quality and media coverage are on the rise.
Any questions, please let me know.
by Wine Owners
Posted on 2020-06-04
Chevalier is out this morning at £247 per 6, a perennial favourite and on the back of a seemingly great success in 2018. Hopefully in 2019 they’ll have tamed the merlot alcohols which hit 15 degrees in 2018. Bordeaux being blends saved the day and early pickings of Cabernet brought the assemblage down to under 14 degrees. Still, that kind of inherent excessiveness does make you wonder. Chevalier does age with unusually consistent grace no matter the kind of vintage.
Relative value analysis points to 2014 as being a rather decent pick of an excellent run of recent vintages. 2019 is fairly priced for collectors of this lovely estate but not to attract the short term profiteers.
Banner Image: http://www.domainedechevalier.com
by Wine Owners
Posted on 2020-06-03
Cos d’Estournel is out £684 per 6. -23% down on 2018. Great wine they say but is the price reduction enough?
The magisterial 2016 is hovering 10% above this release price, which is among the greatest young Bordeaux Lisa Perotti-Brown has ever tasted, it’s in bottle and widely available, so we think they needed to do a little more to make this really attractive. However good the 2019 proves to be, it does not prompt the same compulsion to buy this year as Pontet Canet and Palmer.
Prices and points (we have allocated 98 points)
Banner Image: www.estournel.com
by Wine Owners
Posted on 2020-06-02
Palmer was released this morning at £999 per 6, a 31% reduction from the (pumped-up) pricing levels of 2016 and 2018. We are back into rational release pricing territory.
Does it work? Absolutely. Note we have put in a placeholder of 18 points but it works at 17 points too.
At this rate, if the whole of Bordeaux rallies around the reduction level of -30% to -35% set by Pontet Canet and now Palmer (and rumoured to be the level of reduction that Lafite will apply), this’ll be the first en primeur campaign since 2014 where it would make sense to buy more broadly than the very specific, narrow range that we’ve suggested makes any sense at all in the last 3 campaigns.
Here’s the analysis of Palmer.
First pricing and scores:
And the relative value calculation. Note how much longer, and therefore better value, the 2019 bar is than any of the comparative vintages used for the analysis:
Banner Image: www.chateau-palmer.com
by Wine Owners
Posted on 2020-05-27
So Latour 2012 is out today at £350 a bottle. What’s that got to do with 2019 EP I hear you ask? Well coming as it does just before the releases of the 2019 big boys, and because it’s the first release from Latour that wasn’t previously released EP, it’s seen as a test of the market and what the consumer’s appetite is for laying out hard earned spondoolies in The Time of Covid.
I’ve seen emails from merchants this morning gushing that this is the cheapest Latour in the market today, and how they’ve got the pricing right.
The retail channel needs to see the 2019 releases come out minus 30% v 2018. That would put Lafite et al at around £2,000/ 6 and at that price it would sell. Plus it might just re-energise the Bordeaux secondary market with a dollop of positive sentiment.
However If we compare 2012 Latour to other comparable vintages of Latour, so say 2008, 2006 and 2004, which I think is rather realistic, we see a very different picture.
Here’s the market price and JR points plotted for 2012 and those benchmark vintages selected:
And here’s the weighted effect of that taking into account scores:
The longer the bar the better the value, the bigger the gap between the longest and the next, the more compelling the buy. Not much in it is there? Which says that Ch. Latour, far from doing their 2019 EP peers a massive favour, have given absolutely nothing away. There’s no Covid discount baked into this price. The best you can say is that there’s no guff about ex Chateau premium.
So, as a curtain raiser, it's a damp squib. But that’s their release model now and who’s to say they are wrong? At least we know what we’re drinking. The reply to this question, answerable only by Lafite et al, will come soon enough.
by Wine Owners
Posted on 2020-05-20
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” Charles Dickens.
18th May 2020 kicks off the Bordeaux 2019 en primeur campaign with the release of Chateau Angludet. They’ve partially gone down the amphora route to gain purity. It’s a great success, a very great Angludet, according to a number of merchant emails received today. Those same emails belie one small issue - that the wine has yet to be tasted. A reminder of the impact of Covid-19, the anxieties and emotions over this year’s releases dominated by hope and despair. So we have to take the Bordelais at their word that it’s a great vintage, fresher than 2018, in the same mould as 2016 or 2010. I’m sure producers are excited by what they have in cask or tank or whatever receptacle the juice is in these days. But it’s not unjustified to say that local opinion isn’t always entirely objective. So bring on those Chronopost and UPS samples and let us all taste...
We have to be honest, we’d have much preferred a deferral of the campaign to October after the harvest. We don’t agree that would have caused any issues with other regions’ releases. There is something very strange about releasing a futures campaign whilst so much of our economy is in deep purdah. But the die has been cast and June it is (for the 60-odd releases that the market chooses to focus on).
The choice of timing of the releases is significant. It is quite obvious that, just like the 2008 vintage release, there will have to be a very significant reduction in release prices for 2019 to find a market. Those properties who have tended to use en primeur more as a marketing opportunity than a selling one will have to think about what it means to them: the prospect of a marketing campaign has more or less evaporated. For those properties who expect or need to sell a sizeable percentage of the harvest, only one one of the four marketing ‘P’s matter. It can be the best vintage in the world, it can garner (in the fullness of time) more 100 pointers than any of the last 40 years, but success will boil down to one thing and one thing only: price.
That decision will have ramifications on the whole of the Bordeaux global secondary market. A significant reduction of 30%-40% can ignite interest in the region’s great wines. It can draw in a new generation that has largely ignored the region, or doesn’t see the point of purchasing new releases two years before shipping. It can reward buyers of the last vintages who are under water and likely to remain so. A compromise that shows intent but brings us back to the levels of 2015 will consign Bordeaux to another year in the shallow quicksands of a secondary market lacking direction, fearful of the future, unwilling to commit cash, failing to see the point anymore.
Ah, I hear you say, but the world is awash with cash desperately looking for a home, just as it was post-Lehmann - when the fine wine market benefitted royally. I disagree. We are entering uncharted waters and cash in the bank trumps FOMO, the fear of missing out. Warren Buffet can be wrong sometimes, but not all the time, and moving to an underinvested position does not seem completely crazy.
So let’s say that 2019 is the equal of 2016, increasingly recognised as the greatest classic Bordeaux vintage in a generation. 2019 is likely not its older sibling’s equal (probably, but who knows) but let’s pretend it is for a second. Even on this most optimistic reading of the new vintage, would you rather buy into a vintage that has been tasted, re-tasted, evaluated ad infinitum and has withstood the scrutiny of the entire market, or roll the dice with a vintage that will be narrowly evaluated based on posted samples? Add to that 2016 prices that have barely moved or drifted down, and the comparative case for 2016 is about as strong as it gets.
Bring on June, and a prediction: either the most successful en primeur campaign since 2016 (notwithstanding Covid-19) or a non-event, determined purely by one variable - price.
20th May 2020
by Wine Owners
Posted on 2020-05-19
Miles Davis, 18th May 2020.
Activity in the wine market in April was, pretty much, a repeat of what we saw in March. Numbers of alcohol and wine sales have been higher across the board since the pandemic struck, with people apparently drinking more, just less publicly! Closer examination would suggest quantity is winning out over quality, as volumes are up but values are lower. This comes as little surprise and this trend has been replicated on the Wine Owners platform. Plenty of gluggers being bought with little activity in the investment grade.
One interesting area of note amongst London’s fine wine traders, who have generally been quieter than in more normal times, has been a few very high value trades purchased by drinkers not investors. High value cases of DRC, Le Pin and other very top end names have been changing hands in piece meal fashion. Otherwise trade stumbles along with consumers rather than investors calling the shots.
The trends that existed pre the virus seem to be continuing and there is no question Italy continues to steal the limelight away from France. There is no doubt the lack of U.S. tariffs on Italian wines will be assisting here but Italy is on fire anyway. Some superb vintages from their finest wine regions, namely Piedmont (2016) and Tuscany (2015 and 2016) are proving popular amongst wine lovers who are accustomed to paying far more for their French equivalents. These wines are coming to the market now as the Italians release their wines much later than the French. The extra ageing that occurs helps enormously as the reputation of the vintage is not speculative; the wines will have been tasted and re-tasted, so that significant element of risk is eliminated. They don’t ‘do’ en primeur like the French either, so there is far less hype and less FOMO (fear of missing out), so all in all it’s better for the purchaser (the two countries really could learn quite a lot from each other!). Chateau Angludet released their 2019 yesterday, even though only a handful of people have tasted it, as the whole Bordeaux en primeur system challenges itself yet further. June is the current plan for the pricing up of Bordeaux primeurs and unless there are substantial price reductions, we must surely be looking more at a case of double amputation rather than simply shooting one’s own foot off!
Whatever happens with Bordeaux en primeur I strongly believe Italy and the rest of the world will continue to eat into the French gateau. The fine wine market continues to broaden, there has never been so much good wine coming out of other regions and other countries, with journalist’s coverage to match, and with points awarded to even outstrip that! The economic effects of Covid-19 are going to be felt far and wide and the quest for relative vinous value will be evermore sought after.
by Wine Owners
Posted on 2020-04-08
Miles Davis, 2nd April 2020.
If we look at the performance of the wine market relative to the major asset classes, wine has, once again, demonstrated some fine defensive qualities. The wider wine market has traded in a narrow range in the last couple of years, but the WO 150 is still up 57% over a five-year period. So far this year the WO150 is -1.3%. The WO First Growth 75 Index is down 6.6% - not bad compared to the FTSE slide of over 26% (peaking at -34%). There is a correlation in that the Covid 19 crisis has brought both classes down but the difference in magnitude and the speed in which it happens is significant:
Perhaps there will be a time lag response to the wine market as liquidity is so relatively small and because professional investors will not even stop to think about wine in times such as these (a good thing!). Following the Global Financial Crisis in 2008, The Fine Wine Fund, which I was co-managing and invested entirely in blue chip Bordeaux, lost an average 5.5% a month between September and December.
|| Current Value
|| 1 Year
|| 5 Year
|| 10 Year
| WO 150 Index
| WO Champagne 60 Index
| WO Burgundy 80 Index
| WO First Growth 75 Index
| WO Bordeaux 750 Index
| WO California 85 index
| WO Piedmont 60 Index
| WO Tuscany 80 Index
So far, the current market does not feel like it is going to react in quite the same way as either back then or like the major asset classes. To start with Hong Kong (and therefore China) has been inactive for the last nine months, first with the political troubles and now the virus and inventory must have reduced but, more importantly, the strength of the US dollar versus sterling is in play. At the start of the year GBP/USD was 1.33, falling to 1.15 on the 20th March and now at c. 1.24. The depreciation of GBP has protected sterling holders of wine and encouraged dollar buyers back into the market – indeed, we have seen this as a noticeable trading pattern, one which will probably continue.
Our own experience is that we have seen buyers of first growth Bordeaux, village and premier cru Burgundy, 2016 Piedmont and some of the super Tuscans. Most of the sub-indices are in good shape but there are two points to note here; one is that merchants rarely mark stock down unless they have to and the other is that these are calculated using the only readily available price – the offer price. Bids may well tell a different story.
Overall, the wine market is going to struggle this year and I would predict mainline prices, i.e. liquid Bordeaux and expensive Burgundy will be up against it. There will be lots of opportunities however and I do not expect a sudden crash, as we would have seen that by now. In a normal market 2016 Piedmont would have been extremely difficult to buy but, as it is, it is proving a joy. This will not be the case when the dust settles and as there’s very little to go around, I repeat my buy recommendation.
N.B. Our Burgundy index needs reworking as it has too many older, illiquid vintages contained within it.