by Wine Owners
Posted on 2020-02-13
Miles Davis, 11th February 2020.
January in the wine world is always dominated by the latest Burgundy en primeur campaign. All the major Burgundy traders host tastings and the great and the good of the Burgundy buying world descend on them, hoping to make the latest ‘discovery’. Tastings this year were from the bumper 2018 crop. It was a very warm and sunny vintage with sunlight hours breaking new records. There were a lot of higher than average alcohol levels around and full, fat and juicy wines! There was plenty of merchant hype with generous descriptors in full flow. I found that seasoned pros were less impressed. The single most interesting fact surrounding the campaign, to my mind, was that one of the biggest merchants was only buying to order and would not be taking any wine for stock. Is this a sign of the times (i.e. the market) or the vintage? I think it’s a bit of both.
As previously described here, the wine market has been under the influence of a fare few geopolitical factors of late. That theme continued in January with the outbreak of the coronavirus in China. Given the proximity of Hong Kong to the outbreak, this is a further blow to the territory and the wine trading scene. Residents are working from home; confidence is low, and demand is thin.
Demand from the U.S. continues to be muted as we expect a further announcement from their administration regarding the Airbus related European tariffs on February 18th. Monsieur Macron has agreed a truce with Mr. Trump, for now, on his digital tax, but although that has gone away no one is placing any bets right now - the merest whiff of a tariff is enough to keep importers at bay. Here is a fascinating (and alarming) table of numbers from the American Association of Wine Economists, clearly showing the impact of U.S. tariffs:
I cannot explain the significant increase in New Zealand and South Africa versus the equally surprising declines for Argentina, Australia and Chile but researching the potential in South Africa is very much on my list of things to do!
Back in old London town merchants are discounting in increased margins to move stubborn stock and the traffic of e-mail offers has been on the rise. The market is desperately short of good news (the ‘Boris bounce’ lasted a full five minutes) and the signs are beginning to tell.
We have now seen releases of Giacosa and Sassicaia 2017. The Giacosa releases included the Barolo Classico, Falletto and the Barbaresco Rabaja from the mega 2016 vintage but the big one, Falletto Vigna Le Rocche Riserva, was from the 2014 vintage. Monica Larner of the Wine Advocate awarded 97 points and wrote “This estate is known for taking its biggest chances in the so-called off vintages. Betting on 2014 has turned out to be a brilliantly contemplated move”. I bought the lot, in all formats, in a brilliantly contemplated move!
I also bought some Elio Grasso 2016s (c. £350 per 6) and magnums of the Runcot Riserva 2013s. This is full blown 100 pointer from the Wine Advocate and only c. 5,000 bottles are made in only the very best years. This grower is becoming more popular and now he holds a perfect score is likely to become more so. One for the notebook.
I wrote very recently that if I had to pick one brand for 2020 it would be Sassicaia – the commentator’s curse! Following superb reviews and having won various awards for the ’15 and ’16 vintages, with price performances in the secondary market to match, Sassicaia has gone and done ‘a Bordeaux’! At £850 per six, this is a 22% increase on the 2016 release price, for an inferior vintage with an inferior score in a troubled market. Priced more modestly this could have sold out in seconds and left the crowd baying for more. As it is, it is very easy to buy at £850 – I prefer back vintages.
More generally, the WO platform has seen a lot of really good quality offers recently. There is a lack of confidence in the short term, collectors are trimming but there are buyers about; they just tend to be playing a bit more hardball than before. Spreads have widened in reflection of this and sellers need to be realistic (not over ambitious) if they want to sell.
Miles Davis, Wine Owners February 2020
by Wine Owners
Posted on 2012-06-28
“The consumption of wine throughout the Indian sub-continent and in Persia was common 1,000 to 1,500 years ago,” according to Chris Devonshire-Ellis, principal of Dezan Shira & Associates. “In more moderate Islam it was acceptable – in moderation – and the Sufi poet Rumi is well known for his verses comparing God with the delights of the grape. (Huffington Post).
So there is wine culture deep in the psyche of the Indian sub-continent.
Imported wines in India currently attract a 150 percent tariff, in addition to duty of 4 percent. Taxes – at varying rates – are then imposed by India’s individual states. These vary from between 30 percent to 100 percent depending on the state, and have made India a wasteland for quality imported wines. Low-end brands that would retail elsewhere in Asia for US$12-US$15 typically cost upwards of US$50 a bottle.
Now a proposed deal with the EU would reportedly reduce import duties to 40 percent, boosting the sale of wines in many states.
India is a rapidly growing market and the demand will only get higher with the proposed changes. Like other areas of Asia, wine has grown immensely in popularity in India over the past decade, as a rapidly expanding middle and upper class can increasingly afford high value imported products. Wine imports have doubled over the last two years, and with India’s consumer markets expected to quadruple over the next two decades, the lowering of import duties is expected to have a significant impact.
The current trade negotiations between the EU and the Indian government have been going on for four long years but – finally – a deal looks about to be struck this year. This could have a dramatic impact on the global wine industry.
Any deal would see India slash tariffs on imported alcohol in return for an opening-up of the European market to India.
Don't expect a rerun of the China boom however. The experience with the Bordeaux First Growths boom and bust cycle during the period 2008-2012 should instill due caution into would-be drinkers, collectors and investors wherever they are.