Wine Market Investment Report November 2019

by Wine Owners

Posted on 2019-12-09


I have just finished reading the latest threats relating to U.S. trade tariffs. In response to France’s application of a 3% digital services tax on heavyweight U.S. tech companies (you know the ones), DT and his representatives are considering recouping $2.4 billion from France’s premium markets; namely handbags, make up, certain cheeses and sparkling wines made from grapes. These tariffs will not be introduced until the new year if at all, so Christmas is saved at least. These products are possibly facing a 100% tax penalty so it’s out with Vuitton, Chanel, Roquefort and Krug and in with Coach, Maybelline, Monterey Jack and Napa Mumm – maybe Brexit isn’t looking quite so bad for us Brits after all!

How these lists are drawn up I do not know; the cheeses include Edam, Gouda and Parmesan which, as we all know, are not known for their Gallic qualities. Unlike still French wines below 14.1% alcohol, Champagne dodged the tariff bullet in October but may now be hit four times harder. These tariffs are messing up our market and we don’t like it! Tit for tat exchanges cannot be the way forward, and we look and hope for more stable trade agreements globally, but we must live with them for now. We have heard of several ‘swerves’ so far; U.S. buyers storing in Europe in the short term, importers identifying the highest alcohol level of any of a producer’s wine and employing that number universally across the producer’s range and even producers being asked to mark 14.1% on the label!


Index Current Value MTD YTD 1 Year 5 Year 10 Year
WO 150 Index 315.67 -1.95% 1.44% 2.03% 62.62% 91.05%
WO Champagne 60 Index 493.15 0.77% 5.40% 7.02% 73.96% 166.01%
WO Burgundy 80 Index 744.26 -0.61% 6.08% 7.35% 147.25% 239.18%
WO First Growth 75 Index 274.38 -3.16% -2.76% -2.65% 48.45% 64.45%
WO Bordeaux 750 Index 366.5 -2.23% 8.20% 8.98% 69.82% 111.68%
WO California 85 index 679.17 -3.41% -0.14% 0.83% 98.95% 296.39%
WO Piedmont 60 Index 335.87 -1.70% 5.64% 6.32% 81.94% 125.17%
WO Tuscany 80 Index 312.88 -2.43% 6.86% 10.01% 61.16% 86.68%


As predicted last month, the indices are beginning to tell the story of recent headwinds. It is interesting to note that Champagne was bucking the trend - that will not continue now. All the other main indices drifted down; the Italian numbers surprise me as the wines we are currently seeking to accumulate have shown no weakness in price. Italy remains free of any U.S. tariffs although further scrutiny can be expected.

I expect there to be some continued easiness in the market in the short term, but I would not recommend selling now as I think it unlikely the market will retreat by 10% or more. Spreads have widened a little and bids are currently around 10% (or more) below the cheapest market price. There will indubitably be some very interesting buying opportunities in the coming months for those brave (and clever) enough and it is interesting to note rarer stocks already becoming available. Great 1990 Bordeaux is a perfect example; normally very scarce and difficult to buy, there is some volume available and it is a buyer’s market.

If some of the current headwinds, namely Hong Kong politics, U.S. tariffs and uncertainty surrounding GBP stemming from UK elections, and no deal Brexit fears, died down activity would increase, and the wine market would soon shore up. In the world we live in, with low (or negative) interest rates and where investors buy bonds for capital appreciation and equities for income, wine will make a lot of sense again soon. There needs to be a certain amount of unravelling of these issues first, however.


WO 150 Index - Wine Owners - November 2019


Please contact miles.davis@wineowners.com with any questions.


Italian wines - ripe for investment

by Wine Owners

Posted on 2019-11-15


This article is a republished version of one that appeared earlier in the year. Why? Because there’s another reason to sing about the virtues of Italian wines; the Trump administration have recently introduced a 25% tariff on all wines from France, Germany and Spain below a 14.1% alcohol level (Champagne is exempt). This has caused a loss in confidence in the French heavyweights and Bordeaux and Burgundy prices are on the slide. Italy’s cheese industry was the one selected to take the hit in this particular trade war, leaving their wine sector sitting pretty. We’ve been bullish on Italy all year, this adds further grist to the mill.

The Italians are not only the largest wine producing country in the world, they have been making wine for over four thousand years and cultivate over two thousand grape varieties on a multitude of different soils in twenty different regions! They are not bad at food either. Their climate seems to suit most of the finer things in life.

Italian wine being recommended is nothing new, but having it recommended as a collectable asset bearing an investment case is another matter. Ten years or so ago, a few canny collectors realised some of the ‘Super Tuscans’ (red wines typically made of a Bordeaux blend in Tuscany) such as Masseto, Ornellaia, Sassicaia (recent blog) and Solaia were ripe for decent returns. Traditionalists were a bit put out by these glossy new pretenders turning up on the Italian wine scene with their fancy French grape varieties and lots of marketing but it is fair to say they have helped the overall attention given to Italy and, as a result, the ‘Bs’ are blossoming – namely, Barolo, Barbaresco and, to a lesser extent, Brunello.

Wines from the best producers of Italy’s most venerable regions have been collected by the cognoscenti for years but now their appeal is becoming more widespread. The problems of Bordeaux, following an explosive China-driven period, have been well documented in the last decade and in its place, the smaller top-quality regions have been profiting. The indices for the last five years show Burgundy +120%, California +79%, Piedmont +76%, Tuscany +62% and First Growth Bordeaux +47%, the broad base WO 150 is +55% (all nice numbers!).



The reason for Burgundy’s performance is that old tried and tested wine world fundamental of genuine demand outstripping supply - who knew!? I think it is fair to say prices in Burgundy have been coming off the top for nearly a year now. Californian prices were a little more ‘forced’ and are in retreat now, but both these regions produce tiny quantities in comparison to the number of people looking to access these markets and gain exposure. Very widely held Bordeaux has been steady but is beginning to slide in this difficult environment. Piedmont and Tuscany are holding firm to gently positive.

The complex nature of Burgundy, California and Piedmont with their tiny (compared to Bordeaux) vineyards is attractive. This adds to the aesthetics, spurring on both the well-seasoned and newcomers alike, keen to learn more and invest time and money accordingly. More of the written word is more easily accessible to interested folk, and with platforms such as Wine Owners to trade on, the visibility of the product and the liquidity of the commodity has increased.

Grand Nebbiolo from Piedmont is yet to hit the big time, apart from a special few producers, but the word is spreading and there are ‘new’ names coming through; dedicated collectors and the inquisitive are homing in. It is a Burgundian-like network of vineyards, producers, families and reputations and you need to know what you are doing. Famous names like Conterno, for example, have six listings in my favourite reference book: Aldo, Diego, Fantino, Franco, Giacomo (the big one) and Paolo.


Some of the bigger names like Giacomo Conterno famed for his Montfortino vineyard, Giuseppe Rinaldi, Bartolo Mascarello, Bruno Giacosa and Gaja are already highly sought after superstars, with prices to match, but there are a host of others with reputations and demand beginning to swell; Brovia, Cappellano, Fratelli Alessandria, Sandrone, Voerzio and Vietti to name a few.

The ‘Super Tuscans’ of Bolgheri are much simpler to understand, like Bordeaux versus Burgundy, and are produced in larger numbers. The names mentioned earlier are virtually household names (in wine terms!), are less exciting right now overall but tend to deliver very steady returns.

Brunello di Montalcino, made from Sangiovese, is also comparatively easy to piece together in relation to Piedmont. Biondi Santi, Poggio di Sotto, Salvioni and Soldera are the big names with the fancy price tags. The secondary market for Brunello has not yet developed so, for now at least, it is a case of keeping a watchful eye although Soldera has been added to several portfolios already. There are many other less well-known names that have been attracting huge plaudits from the top critics that remain under the radar. This group haven’t matured into the darlings of the market, so far, and back vintages are cheap and well worth consideration.

There have been some excellent vintages in Italy in the last decade or so, attracting fantastic media coverage and now the battle-weary Bordeaux buyers and profit takers of Burgundy are moving in. Another reason for favouring Italian wines in the current climate is that the U.S. and Germany are the biggest export markets, so the market unlikely to be affected by any potential fallout from Brexit.

Most of all, however, these wines are barely scratching the Asian surface as yet and we all know what happens when that changes!

Miles Davis 15th November 2019



Wine Market Investment Report October 2019

by Wine Owners

Posted on 2019-11-07


I wrote at the end of September that the market mood is sombre, it is a bit darker now. It is too early to be reflected in the monthly indices, but blue-chip Bordeaux prices are beginning to slide a little. The ongoing factors that have been keeping a lid on any sort of optimism, namely International trade wars, the Hong Kong political situation and Brexit have now been compounded by upcoming UK elections, in December, and therefore huge concerns over sterling, and US trade tariffs imposed by Donald Trump’s administration in retaliation on behalf of the airline industry (for Pete’s sake!). These tariffs are to the tune of 25%, added to the value of French, German and Spanish wines at 14.1% alcohol or below. Champagne is exempt - god knows why! One could argue that thanks to global warming there’s barely an investible wine made under that alcohol level these days but news like this tends to affect the market as a whole; people will not seek to differentiate one wine from another.



Current Value MTD YTD 1 Year 5 Year 10 Year
WO 150 Index 321.96 0.02% 3.46% 3.67% 67.21% 101.28%
WO Champagne 60 Index 489.4 0.07% 4.60% 6.22% 70.83% 170.94%
WO Burgundy 80 Index 748.85 0.20% 6.73% 9.37% 152.68% 254.40%
WO First Growth 75 Index 283.32 0.02% 0.41% 0.80% 54.59% 76.29%
WO Bordeaux 750 Index 374.87 0.10% 10.68% 12.29% 74.33% 123.98%
WO California 85 index 703.15 -0.55% 3.39% 6.44% 108.22% 326.72%


London based merchants have had little reason to be properly confident in the last few months and these latest two factors are enough to have toppled the balance. The same applies to private clients, be they drinkers or investors, but all players need the feel-good factor to make the wine market tick up. That is simply not around - UK consumer confidence is at its lowest point for six years, according to a recent YouGov poll. So, with the core of the market, in the form of London based merchants, cowering under their desks, the good folk of Hong Kong donning tear gas masks and fighting in the streets and with Uncle Sam’s citizens being asked for a further 25% in tax, there aren’t any hot spots of demand right now. These are all conditions that can, and will, change but for now it is tin hat time.

I have been arguing for a while that recent vintage (anything since 2005), highly expensive (albeit highly rated) wines from Bordeaux are still in huge supply. No one is drinking them as they are either far too young or just too expensive, fit only for the ‘money no object brigade’. Also, with the glut of ‘investment companies’ that existed during the glory days of the Bordeaux market, there are warehouses stuffed full of overpriced claret all over the land. Even the good guys of the wine investment world largely focus on very highly rated claret from good years, quite often without stopping to consider the price.

2009 and 10 First Growths have been my biggest sell recommendations so far this year, but I have expanded those thoughts and now, I would suggest that Bordeaux First Growths and equivalents since and including 2000 are a SELL; also, a lot of next tier down, Montrose and Pontet Canet ‘09 and ’10 for example, notwithstanding their incredible ratings. I would keep anything from 1990 and beyond due to rarity and would sit on the fence for anything in between, although I am sure that prices there will ease a little too.

I do not think the rest of the wine market will suffer to the same extent as Bordeaux, mainly because it’s not nearly so tradeable and doesn’t suffer from the over supply problem; Bordeaux is unique in this and with another great vintage around the corner (early reports suggest 2019 is going to be very good, but isn’t it always thus!) there’s another wall of stock on its way, probably much of it at the wrong price again.

Don’t get me wrong, I love Bordeaux and am very happy to accumulate and drink older vintages. For investing, I just prefer other regions right now, particularly Piedmont, Tuscany and vintage Champagne. Even in these tough trading conditions it’s actually quite difficult accumulating really good stocks of Piedmont at decent prices at the moment.

Below is a quick comparison between some great vintages of Mouton Rothschild versus Bartolo Mascarello, one of the best Barolo producers. Mascarello is not the household name that Mouton is but it is the qualitative equivalent, is produced in tiny quantities (easily less than a tenth of Mouton) and is held almost entirely by the cognoscenti who are likely to drink it themselves. Mouton, on the other hand, can be found in cellars from the cognoscenti to the cretini! The message is clear, and the relative bet to my mind is absolutely nailed on (as they say on the racetrack).

Wine Owners November wine market investment report

Even taking into account trading spreads and expenses I would happily recommend selling Bordeaux blue chips and reinvesting in other areas. The difference between the per bottle prices of equivalents elsewhere suggest there’s plenty of upside in the trade.

Miles Davis 7th November 2019


Is it time to hit the bottle?

by Wine Owners

Posted on 2019-10-08


At the risk of sounding like a stuck record, the market mood is sombre. It does, however, remain reasonably steady amidst a turbulent sea of macro factors.

Hong Kong is an important market for wine and the ongoing protests are a concern. The original cause of complaint, an extradition agreement between the territory and the Chinese mainland, has long since been retracted but the protests continue, becoming ever more violent. This is about democracy and freedom and the eyes of the world are watching. It is an uncomfortable position for China who cannot afford to handle the situation as perhaps it might in its own provinces but in the long term, remains a very powerful parent. Already the economic effects are being felt; officially occupancy rates in Hong Kong hotels are currently running at about 20%, unofficially they are in single digits. A quick internet search found a room in the territory for US$9 a night, including breakfast!

As we know, Hong Kong, apart from having its own burgeoning wine scene, is currently the gateway to the wine market of China, legally or otherwise. We expect China will open new free ports in time, but the current troubles may just accelerate that process. We think this is a short term problem but in the meantime, trade form that corner of the world is quiet.

U.S./China trade negotiations and Brexit shenanigans continue, and emerging markets are threatened by contagion emanating from Argentina. Thrown in the unrest in various parts of the Middle East and various other more localised scenarios, it’s a right old mess. And what does well in right old messes – physical assets! Here is the Gold price performance so far this year against the WO 150 index.

WO 150 - Gold price performance

We’re not saying there is any correlation, delayed or otherwise, between wine and gold but recent financial history (since the last global financial crisis) has made physical and alternative assets increasingly popular.

We live in an era of negative real interest rates, where buyers of roughly a third of the world’s outstanding bonds will lose money if held to maturity and where even high yielding equities with strong balance sheets are not performing – all very sobering! With all this going on, is it time to hit the bottle?

Within the wine world, my investment themes remain the same; focus on regional allocation, combined with scarcity and relative value is the game.

Please contact miles.davis@wineowners.com with any questions.


Wine Market Investment Report August 2019

by Wine Owners

Posted on 2019-09-09


August was much like July with summer holidays being the prime concern for most people. The wider market has felt quiet, maybe because the Bordeaux market is still largely flat, but there are definitely pockets of excitement about and the broad-based Wine Owners Index was up 0.9%. Trade was brisk with Piedmont, Tuscany and Champagne dominating turnover at Wine Owners.

The solid, relative value investment case for the wines of Piedmont has created demand which, in turn, has led to us step up our sourcing efforts. Liquidity is tight, obviously one of the plus points in the investment case, but we have managed to unearth some lovely parcels, particularly some legendary Bartolo Mascarello vintages.

Sterling has remained weak due to the Brexit shenanigans, and this has finally translated into some positive moves for various wine indices. As we know, a weaker pound generally leads to increased demand in the sterling denominated secondary fine wine market, especially from U.S.$ based buyers. Little has come out of Asia, however, as continuing rhetoric surrounding the U.S./China trade wars rumble on and Hong Kong is still suffering from the most vocal political protests in its modern history. They (the people of Honk Kong) have even appealed to Mr. Trump to help!

The largest region within the wine market will always be Bordeaux and it is business in the wines of Bordeaux that is suffering the most from these continuing issues. Many of the other top wine regions are less affected by these global events and market conditions as the wines are less traded, and the supply and demand ratio in a different place. Bordeaux has been looking cheap versus its peers for some time now, and there’s a lot of bad news in the price but the stars need to start aligning. This can and will happen, but when is the big question!


Wine Market Investment Report July 2019

by Wine Owners

Posted on 2019-08-20


A brief and holiday interrupted report for activity in July

The wine market continues to hold its breath. Boris fulfils (what somehow now feels like) his destiny and moves into Number 10 and the pound plummets. It has since recovered a bit but even so, the wine market didn't flinch. As we know, a weaker pound generally leads to increased demand in the sterling denominated secondary fine wine market, especially from U.S.$ based buyers, but maybe not during the hot days of summer? Certainly not when the U.S./China trade wars rumble on, the rhetoric becoming ever stronger, and most definitely not when Hong Kong explodes into the most violent scenes of pro-democracy protest in its modern history. The Brexit backdrop adds to the confusion, so no wonder little happens.

The largest market within wine will always be Bordeaux and it is business in the wines of Bordeaux that is suffering the most from this continued malaise. Many of the other top wine regions are less affected by these global events and market conditions as the wines are more scarce, with the supply and demand ratio is in a different place. Bordeaux has been looking cheap versus its peers for some time now, but the stars need to start aligning. This can and will happen, but when is the big question!

Despite these almost stagnant overtones, trade has never been brisker with July setting a record level of turnover. Numbers of users, bids and offers forever grow. Collectors looking to trim positions have been well accommodated by others adding and reorganising their cellars, something we are seeing a lot more of.

Burgundy continues to look for its feet, Champagne and Super Tuscans gently hum along nicely, and we’ve seen a little demand for some of the new world too.

Here at Wine Owners, Barolo dominated trading in July. Many vintages of Bartolo Mascarello changed hands, also many Bruno Giacosas, Riservas and otherwise. Fratelli Alessandria becomes ever more popular, as does Luciano Sandrone. And there were some big-ticket trades in Monfortino and Ca d’Morissio.


Miles Davis, 20th August 2019
miles.davis@wineowners.com


Focus on: Luciano Sandrone, Le Vigne - Barolo

by Wine Owners

Posted on 2019-07-09


The reputation of Luciano Sandrone continues to grow and grow, in keeping with the popularity of Barolo. Not as famous as the very top tier of Bruno Giacosa, Giacomo Conterno or Giuseppe Rinaldi but nestling just in behind, at a far more attractive price point.

Here we consider Le Vigne cru although the story is much the same for the slightly more expensive Cannubi Boschis (renamed Aleste in 2013 – in classic, designed to confuse, Piemonte style!).The consistency of the scores is incredible - through a mixture of very varied vintages from ’06-’15 the average is 95.3 points (Wine Advocate). Very significantly, the estate releases a small amount of the exact wines (under the labels Le Vigne Sibi et Paucis and Cannubi Boschis Sibi et Paucis) after ten years of age and they consistently achieve greater acclaim at that point, the ’07 going from 96 to 99 points (WA) for example. The range of points scored would indicate these are very fine wines indeed and given the rarity, must be only affordable to only the mega rich. Not so, prices start at c. £60 a bottle, rising to c. £170 for the stonking 2010 vintage.

For comparison sake I looked at some other fine wines from Burgundy and Bordeaux over the same ten year time period. Obviously these comparisons will never be exactly like for like but the differentials are not that great either; brilliant producers from the top tier of their respective regions, producing internationally acclaimed wines from the best local grape varieties designed to take advantage of their particular terroirs and climates to the full. We have a decent premier cru Burgundy, Domaine Dujac Aux Combottes, a sensational Pomerol on top of its game, Vieux Chateau Certan, and the king, Chateau Petrus (just for fun):


Comparisons between ‘06-‘15 vintages:

Av. points

Av. Price

Highest price


Luciano Sandrone Le Vigne Barolo DOCG

95.3

£98

£170

Domaine Dujac Gevrey Chambertin Aux Combottes Premier Cru

91.6

£170

£234

Vieux Chateau Certan

94.1

£134

£220

Petrus

96.1

£2,200

£3,250


I suggest there is room for significant upside for this Barolo. And I am going to start selling the Combottes I own, the differential is absurd and further illuminates how crazy Burgundy prices have become. Production of fine wine in Barolo (and Barbaresco) is tiny compared to even Burgundy and completely miniscule in what we could consider the ‘investable’ candidates.

Please see charts for Market Price and Relative Value Scores for available vintage comparison.

Le Vigne Sandrone RVS

Le Vigne Sandrone MPS

Miles Davis

9th July 2019


The Wine Market Investment Report - June 2019

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.

Miles Davis

8th July 2019

miles.davis@wineowners.com


The May 2019 Wine Investment Market Report

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.


The April 2019 Wine Investment Market Report

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.


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