by Wine Owners
Posted on 2020-12-16
Luke Macwilliam, December 2020
At the beginning of December, Mouton Rothschild announced that Chinese artist Xu Bing had been chosen to design the latest installment in their famous long running series. The label itself features the words Mouton Rothschild styled to resemble Chinese characters. Visually it’s attractive enough, it’s certainly quite clever and effective in the way you are compelled to look beyond the characters and see the recognisable letters hidden in the design.
Predictably the price jumped around 12% after the announcement, Mouton Rothschild, Chinese artist, good vintage, it's a banker! Isn’t it?
The last time Mouton entrusted the honour of designing their label to a Chinese artist was a decade ago in 2010, on the release of the 2008 Vintage. Now the market was very different back then, and the Chinese market was the main driver of the wine market as it grew and grew despite the financial crisis of 2008. Upon announcing the label design, prices skyrocketed.
The excitement was short lived, however. The Chinese bubble burst in the summer of 2011 and prices came tumbling down.
If we compare the big five from 2008 (nb. Lafite also included a Chinese Symbol on their 2008 label), you can clearly see the over inflation the hype caused compared to the other 1st growths. Those who bought Mouton and Lafite 2008 between Nov 2010 and June 2012 will have been licking their wounds for some time, destined to never recoup their losses.
If you bought in 2014 however, you will have seen Mouton 2008 perform in a much more sensible manner.
The last 5 years performance is a much healthier representation of the Bordeaux market in general, steady growth between 2015-2018, a flat 2018-19 (read THIS market report from Sept 2019 for the explanation) and finally strong resilience in a really difficult 2020 for markets of any kind. Has Mouton 2008 performed in this way because of it’s label or because it’s a top wine?
All of the 1st growths have tracked steadily, but more recently, Mouton and Lafite 2008 have begun to diverge in price once more showing that continued demand for these special labels does still exist.
In 20 years time when supplies of these vintages become more scarce, will Chinese demand for a label outrun the global demand for the greatest vintages (2010, 2016 etc)? That is the million dollar question.
Let’s look at the example of Mouton 2000, we have a golden combination of a special wine from a special vintage in a special bottle (not just for the Chinese Market, but for the world). The result? Steady increase in value over time as demand remains high and stocks steadily run down. The troubles of 2011 did not affect Mouton 2000 in the way they did affect Lafite and Mouton 2008.
If you buy into a Chinese label, you are buying into the notion that China is, and will continue to be the main driver of the top end of the fine wine market. If you buy into a wine, then the whole world will potentially be after what you have.
Wine is a long game, and snap reactionary decisions based on hype come with great risk. If you are looking to make a quick buck then you are likely to come unstuck. Call me boring, but I find trends more compelling than one-off anomalies. There is a place for special editions in your portfolio, they do tend perform well over time, so long as the wine is up to the task as well.
Oh, and if you fancy picking up a case of Mouton 2008 BID or BUY here.
Luke MacWilliam, December 2020
Banner Image: http://www.domainedechevalier.com
by Wine Owners
Posted on 2020-12-09
Miles Davis, Wine Owners December 2020
As we head into the final phase of this extraordinary year, the world of wine investment is a calm and beautiful little side water, gently ebbing and flowing with that serene feeling it knows where it is going.Traditional assets continue to bounce around, no doubt causing palpitations and stress. More than ever, this year has been about timing in the capital markets, and if you got that wrong, the chances are you got it expensively wrong. Not so for vino! Unlike after the global financial crisis, the wine market has held its nerve, merchants did not mark down prices and the market has been stable. Investors are about, and even Bordeaux prices feel like they are firming up. Collectible assets are in vogue and it is easy to see why given these circumstances. You cannot even hold, let alone drink, a bitcoin, a share, a derivative, an option or a future and a bottle feels good, especially in lockdown!
Demand from Asia has increased and merchants trading the big names have been pleased with activity levels in recent weeks. There is almost a feeling there is an element of restocking going on after a quieter than usual period (in Asia) over the preceding months. This has happened in a period when the currency has gone against dollar buyers, although only marginally. Buying is very specific but certain names have moved up considerably since the middle of the year, Mouton ’09 and ’10, for example, are both up c.10%, the controversial ’03 c.14%. There does not appear to be any thematic buying, however, so it is not possible to call a vintage, or a certain Chateau or producer. Keep looking for the relative value is my suggestion and do not forget to make use of the useful tools we provide. See below for an example (if anyone would like a demo on how to use this, please ask):
In Burgundy, especially in the trophy sector, if it is not in its original packaging it is not going anywhere and vice versa. We have seen big ticket items in Leroy and Cathiard sell well recently. Provenance is key and is proving valuable.
Piedmont, Super Tuscans and Champagne remain firm, as does my conviction as areas for further purchasing.
We have had a lot of demand for Penfolds products; whether that continues given the newly slapped Chinese tax on Aussie wine imports will be interesting to observe but, in the meantime, we have plenty of two-way activity.
Personally, I have never been able to compute the prices of some of the ‘Cult Californian’ wines but, in fairness, I have rarely tasted them. Not so for that wonderful producer that is Ridge; the wines are lovely and the prices reasonable, in normal fine wine language, and a total give away compared to some of the ‘cult’ counterparts. We have offers of the flagship, Monte Bello, on the platform of the ’10, ’13 and ’17 that I would happily recommend, to anyone!
We have been busy at Wine Owners, with a lot more trades going through, spread amongst an ever-increasing group of followers. We are at record levels of new subscribers and have £300k of fresh offers in the last week alone. Notwithstanding the difficulties of some warehouse operations presented, our back office is working well, and our post trade analytics improve all the time.
On that bullish note, the team and I would like to thank everyone for their ongoing support. For those who have not yet fully engaged, we look forward to welcoming you soon.
Have a very happy Christmas, a wonderful new year, and drink as well as you can!
Miles Davis, 8th December 2020
by Wine Owners
Posted on 2020-12-04
Wine Owners is the market-leading collection management platform that provides instant valuations and connects you with a peer to peer trading exchange.
Today, we're very pleased to announce that our collection management platform just got even better - and now includes a fabulous new home cellar management capability.
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