Vin-X Fine Wine Investment | Expert Advice for Fine Wine Investors
Vin-X is recognised as a market-leading specialist broker of fine wine, offering a bespoke portfolio management service to investors. Our goal is to maximise investment potential by ensuring access to the most promising Bordeaux vintages available, and providing essential information to monitor the performance of their investment over time.
In 2012 Chateau Latour created a stir in Bordeaux, and the global wine trade, with its withdrawl from the en primeur system, with the 2011 vintage the last to be released in this fashion. The strategic decision behind this was that the chateau management would determine when the wine was ready to drink and release accordingly.
Since then, Latour’s prices have drifted and lagged behind those of the other four First Growths. The announcement this week that a release of Latour 2006 and its second wine, Les Forts de Latour 2012, on 21st March, a few weeks ahead of the 2017 en primeur tastings, has caused a buzz and also allowed for these Latour vintages to be tasted at the same time as the 2017 Bordeaux wines.
The Chateau has released older vintages each year since 2012, still through the Bordeaux merchant system, but has with-held all of its new vintages at the estate, for release when the wines are mature.
The release of the Les Forts de Latour 2012 (scored 91 points by Steven Spurrier) will be the first time that the strategy will really be tested, and as this wine has not been sold in the market before there are no back vintage prices to compare with, or compete against. Whilst the release date has been announced, the size of the Les Forts 2012 release is not yet known, but rumour has it, it could be sizeable.
Latour put 36% of the overall production into the first wine in 2012, with 43% going into Les Forts de Latour and 22% into Pauillac de Latour. In an average year the estate will make somewhere between 12,000 to 15,000 cases across the three labels.
Commentators have recently questioned the future of the en primeur system and Latour has been viewed as a potential bold first-mover in terms of the shake-up of the system, time will tell but the take-up of next week’s releases, and in particular the 2006 Grand Vin, will certainly be of interest.
The Bordeaux chateaux have to declare their expected production for the latest vintage in December, prior to the Spring en primeur releases. The results submitted by the region’s 6,500 growers have now been assimilated and conclude that the supply of 2017 will be 40% down on 2016. Last year was a bountiful vintage with the highest production levels in a decade, however, 2017 is 33% down on the ten-year average, so the hit is huge. Forty per cent of Bordeaux’s average annual production represents over 300 million bottles of wine – a very significant quota for the region and global supply.
The chief cause of this disaster was the late frosts in April 2017, the impact of which was more severely by the more southerly appellations. St Emilion and Pomerol were fairly devastated, Barsac has produced just half of its five-year average crop and Margaux and Pessac-Leognan were hit in parts. Those estates on higher ground in more southerly appellations also fared slightly better
However, Gavin Quinney, a Bordeaux based commentator, has noted that “For enthusiasts, buyers and collectors of fine wine, it’s worth noting that 80 per cent of the top 150 chateaux enjoyed a good harvest…, at the top end, there should be reasonable volumes and good quality from many of the blue chip names.”
The three most northerly appellations for investment-grade wines, Pauillac, St Estèphe and St Julien have reported higher crop levels for 2017 than the previous five-year average. Their positions on the Gironde estuary will have afforded some mitigation from the effect of the frosts.
The St Emilion Grand Cru and St Emilion appellations were down 56% on 2016, a drop of around 34million to less than 15million bottles year on year, whereas Left Bank Pauillac, St-Estephe, St-Julien and Margaux are down just 12% and Margaux bore the brunt of this.
The 2017 en primeurs trade tastings take place week commencing 9th April this year, we will keep you posted on any news coming through prior to then as certainly 2017 is going to be a demanding vintage to judge, with highly scored wines in a low supply vintage grabbing the headlines and early buyers.
For more information call us now on 0203 384 2262.
Hot off the press, Neal Martin has published his critical view on Bordeaux 2015 today. This was the key critic’s opinion the market has been waiting for and released on The Wine Advocate (although it appears in a slightly grudging way by the platform).
Parker’s chosen successor has rated the 2015 vintage overall as excellent but remarks that it does not have quite the consistency of the great 2009 and 2010 years.
Zoning in on quality ‘hot spots’ Martin states that “The best wines tend to be in the southern Médoc, specifically Margaux and Pessac-Léognan, across the Right Bank in Saint Emilion and Pomerol, then into several satellite appellations”.
He has accorded a small number of wines the very exceptional perfect 100 point scores and compares the quality distribution as a “narrow pyramid, whereas 2009 and 2010 would be flatter so that its average height higher”.
He comments on the workings of the Bordeaux market in his report stating that “primeur works when the price is right” but he does express concerns about the pricing strategies adopted by the chateaux and expresses a view on the focus on competitor pricing rather than the consumer and calls this “a dangerous game to play”.
Neal Martin rarely issues a perfect score so the six recipients of his (98 – 100)s are ones to acquire if the price is right! Top barrel scores are shown in the table below.
Bordeaux 2015: Neal Martin’s top scores
Vieux Chateau Certan
La Mission Haut Brion
Le Tertre Roteboeuf
It comes as no surprise that Margaux 2015 has been well rated by Martin as it has consistently been scored top marks by a number of critics. Haut Brion has already seen a price rise on Liv-ex today and we expect increased demand to see the value in these wines grow in the coming days. For more information contact us on 0203 384 2262.
Chicago-based Hart Davies Hart is recognised as the world’s leading specialist fine wine auctioneer and has just reported that its first sale of 2018, held in February, was the biggest in the auctioneer’s history, raising in excess of US$10M.
The sale took place over three days with bids received from 15 different countries for rare wines from Bordeaux, Champagne and California, but Burgundy led the way. The top lot; 10 bottles of Armand Rousseau’s 1990 Chambertin raised $45,410, and varying formats and vintages of Romanée-Conti, La Tâche and Richebourg were highly sought after. Bordeaux lots included an imperial of 2005 Petrus ($35,850) and cases of the legendary 1982 Lafite. Overall 65 per cent of the featured lots exceeded their pre-sales estimates.
Liv-ex data also shows a continued positive trend for the first months of 2018 and our latest market report provides more information on current performance and looks more closely at Burgundy and the region’s key investment-grade wines.
The top wines of Burgundy are produced in low volumes, are of a superlative quality and command some of the highest values in the world and the market just can’t get enough of them!
The growing global demand for Burgundy’s wines has driven growth in the region’s market share by value traded on Liv-ex from 1% in 2010 to 12.3% in 2017. The Burgundy150 index, which measures the most traded Burgundy wines in the secondary market, has grown an impressive 108% over the same period.
The double-edged sword of extremely low supply, means top Burgundies achieve extraordinary values but at the same time do not enjoy the same levels of liquidity and ‘speed of price discovery’ as Bordeaux. Extremely rare bottles can quickly become price setters in a way that may create unsustainable spikes in the market, but buoyant conditions for the region’s best has held that particular challenge at bay over the last few years.
Burgundy production examples:
Av. Price per bottle
Source: Liv-ex Report: Burgundy – The Market’s Favourite Tipple, February 2018
The market has matured since 2010, it is broader and deeper than ever before. 1,572 unique Burgundy wines traded on Liv-ex in 2017, a 539% increase on the number in 2010. Liv-ex report that the total value of bids and offers in Burgundy wines has increased from £3million to £9million in the last three years with particularly strong growth in 2017.
Increased demand from Asia has driven price growth, Liv-ex reports that the value of Burgundy wine acquired by their Asia-based trade members has increased by 140% since 2009 (in absolute terms), in comparison to a growth in Bordeaux trade of 77%, which includes the decrease in demand since 2013.
Burgundy wines are not as susceptible to price movements due to critic’s ratings of a vintage and as such they are not as important for the price setting process in Burgundy. Scores are often published after the growers and merchants have agreed allocations and prices. Once the wines are in bottle, they are generally not tasted as regularly by the critics as the Bordeaux wines and as such there are fewer opportunities for prices to be influenced by critics.
As in Bordeaux, strict AOC rules in Burgundy limit production levels, and this relatively fixed, small supply has to satisfy a growing global demand, in essence more money is chasing fewer bottles. It’s simple supply v demand economics, the prices now being reached for top Burgundies, particularly older and rarer vintages, can be extraordinary. For example, a 12-bottle case of Domaine de la Romanée Conti 1988 sold for £198,000 in 2017.
DOMAINE DE LA ROMANEE CONTI
DRC is one of the most important brands in the fine wine world and encompasses the wines of DRC Romanée Conti, Echezeaux, Grands Echezeaux, Romanée St Vivant, Richebourg and La Tache.
Figure 10: DRC sub-indices ten year performance
Source: Liv-ex Report: Burgundy – The Market’s Favourite Tipple, February 2018
Liv-ex estimate that the total annual production across the DRC vineyards is between 7,000 – 8,000 cases per annum. This compares to average annual production across the Grand Vins of the Bordeaux five First Growths (Haut Brion, Lafite, Latour, Margaux and Mouton Rothschild) of 70,000 cases.
As demand continues to significantly outstrip supply, relative prices are pushed increasingly higher and DRC values have looked overstretched for some time now. Bordeaux’s market heights of 2011 saw unsustainable price levels, is Burgundy, and in particular DRC, reaching a similar level? We will continue to monitor closely and keep you informed.
We look at Burgundy in more detail in our February Market report. For more information contact us now on 0203 384 2262, email@example.com visit our website www.vin-x.com
This week we have seen global financial markets suffer a seismic wave triggered in the US which saw the Dow plunge 1200 points (4.6%) on Monday 5th February, catalysing losses in Asia and Europe. Financial market commentators have been foretelling a pending correction for some time now following a prolonged period of market growth led by the US.
Higher than expected US wage growth was reported last week compounding concerns over the impact of Trump’s tax cuts and a weakening dollar, leading analysts to revise previous forecasts on potential interest rate growth.
As a result, FTSE 100 closed down 200 points (2.6%), Dax down 2.3% and CAC 2.4% on the 6th February. When compared with overall growth across last year these are significant movements down; FTSE’s loss this week was nearly a third of the total 7.6% growth across 2017.
We have to point again to fine wine’s stable performance in times of uncertainty and financial market volatility. Liv-ex, fine wine’s stock market equivalent, has reported that its broadest indicator, the Liv-ex 1000 saw 0.2% growth in January 2018 and 9.89% in the 12 months to 31st January 2018. FTSE 100’s total growth over 2017 was 7.6%, whereas the Liv-ex 1000 saw 10.2% growth across 2017.
The value of portfolio diversification is realised in times of economic uncertainty and resultant increased volatility in financial markets. Fine wine’s stable long term growth performance offers distinct benefits to optimise performance. It was even noted on BBC Radio 2’s Jeremy Vine show yesterday that fine wine has outperformed financial markets.
For more information contact the team on 0203 384 2262,
We are only a matter of weeks away from the en primeur trade tastings of the 2017 vintage, a year which suffered the most damaging frosts on record for some of Europe’s key wine growing areas. Bordeaux was particularly hard hit with a projected 70 per cent of the region’s producers affected and estimated financial costs to the region of around 1.6billion euros.
A clearer picture has emerged on the outcome of the April 2017 frosts over the last few weeks with A forecast 40 per cent drop in production of the 2017 red wines and 50 per cent reduction in whites. The frost-damage was not geographically consistent and some regions, including the Medoc, were luckier than others, whilst the Right Bank vineyards were hardest hit.
The affected chateaux had significantly reduced harvest which has led to some, such as Pessac Leognan’s Chateau Fieuzal, reporting that there will be no vintage 2017 made (red or white). Barsac’s Chateau Climens had a record low production and will not make any first wine in 2017. Climens’ owner, Bérénice Lurton stated that this was the first non-production of their top wine since 1993.
St Emilion vineyards were also hard hit but the big estates are yet to reveal what costs they have incurred. Chateau Corbin will also only be making a small amount of its second wine, as the only vines to survive the frost on the estate were their young four years old vines and other estates report 50 per cent losses or more.
The challenges the chateaux are facing are not just linked to reduced harvest but additional investment is also required in restorative work on the frost damaged vines which may require the further costs of specialist pruners. This essential work started in January with focus in the vineyards now trained on the coming year’s 2018 vintage.
We expect further information on the impact on the key chateaux in the coming weeks as we approach the en primeur tastings and will keep you informed. 2017 will certainly be an interesting vintage as many parts of the Medoc went unaffected, with good weather conditions during flowering and a dry summer bolstering the vines on the Left Bank, which endured nothing like the devastation of those on the Right Bank. Supply certainly will be lower and a close eye will be trained on quality.
For more information on the market and top performers, get a copy of Vin-X latest’s report here and speak to a member of the team at 0203 384 2262.
New year can commence quietly in the wine world, perhaps a hangover from the seasonal festivities, but the round-up news on market performance continues to whet the appetite for the year ahead as the market starts to gather momentum early 2018.
Fine wine auction statistics for 2017 were published in January by the top houses. Christies held 16 live, fine wine auctions last year in London, Geneva, Hong Kong, New York and Paris, and whilst they have not indicated the total value of fine wine sales across the year they have published some eye-catching individual auction performances:
Top Christie’s lot of the year: a 12-bottle case of Domaine de la Romanée-Conti’s Romanée-Conti 1988, sold in London’s September ‘Fine and Rare Wines’ auction for £198,000. Notably 8 out of 10 of Christie’s top performing wines this year hailed from Burgundy, of course dominated by DRC, three lots of Romanée-Conti 1988, one of Romanée-Conti 1991and La Tâche 1996.
Second best performing brand was Cheval Blanc with a 12-bottle case of its 1947 vintage raising £168,000 in the December in the ‘Finest and Rarest’ London auction.
A single bottle of Chateau Lafite Rothschild 1806 made over £45,000 at the December auction.
Further afield top sales by Christie’s in New York recorded DRC’s Montrachet 1990 (12 bottles), sold for US$104,125 and twelve bottles of Petrus 1947 going under the hammer for $49,000. Meanwhile Château Cheval-Blanc 1947 was the highest selling lot among Christie’s Hong Kong auctions; its May sale saw a case of 12 x 75cl sell for 1,592,500 HKD (US $203,740).
Sotheby’s published their total raised from fine wine auction sales in 2017 as at over US$64million from 21 auctions hosted in London, NY and HK, with their showcase event, ‘A Life of Luxury’ auction in December in NY raising an impressive US$2.6million. Again, Burgundy wines led the way with top lot Domaine de la Romanee-Conti, Romanee Conti2013, selling for $55,350, exceeding its estimate of $30,000-40,000. Bordeaux was well represented though with 78 lots raising $619,244 in total. A 6-bottle case of DRC Romanee-Conti 1996 went for $134,750, trouncing its estimate of $60,000 – 90,000, in the October ‘Finest and Rarest’ sale.
Meanwhile in Asia, the Sotheby’s HK sale in April saw 12-bottle cases of Vosne Romanée, Cros Parantoux 1990 Henri Jayer and Hermitage, La Chapelle 1961 Paul Jaboulet Aîné sell for 1.2 million HKD (US $157,051) each. The growing Eastern appreciation for alternatives to the top Bordeaux wines was further in evidence in the September HK sale where a vertical 43-bottle parcel of Cult Californian wine Screaming Eagle Cabernet Sauvignon achieve the highest-selling lot raising 1,163,750 HKD (US $149,007).
Our newly published January 2018 Fine Wine Market Report provides further information on the top fine wine brands’ performance and things to look out for in 2018 – get your FREE copy here and for more information speak to a member of our team on 0203 384 2262.
Vin-X has published its first market report of the year today with a focus on the Liv-ex Power 100 report of 2017. The annual ranking of the most highly sought after and influential fine wines was published by the trade exchange at the end of 2017 and we look at the top performers in terms of individual wine’s best price growth and overall brand performance by value and volume traded on Liv-ex.
We look at key news items affecting the market now as we approach the end of January 2018 and point to the critics’ focus over the coming months and what to be looking our for in terms of opportunities this year.
Compare your portfolio with the wines featured in our Special Focus section of the report and do you need to strengthen composition by regional or vintage diversification?
Top Burgundy estate, DRC Romanee Conti, announced the retirement of their long-serving Head Winemaker, Bernard Noblet this week. Noblet has worked at DRC since 1978 and took up the post of Head Winemaker in 1986 from his father, André who previously held the position for nearly 40 years from 1946 to 1985.
This familial bond with the famous Burgundian estate has spanned 80 years and reaped massive rewards for DRC as the quality achieved by Noblet and his team has created some of the most highly valued wines in the world.
Continuity planning for this key role at DRC has been carefully managed and Noblet’s successor, Alexandre Bernier (37), who previously worked at Domaine Chanson, will officially take over the reins at the end of January 2018. He has been working at the estate for 8 years and closely with Noblet during the last 3 to 4 years to guarantee a seamless handover. No doubt Noblet’s last vintage, 2017, will be highly sought after on release.
The iconic estate will release its 2015 vintage in the coming months and we expect Noblet’s retirement may also impact on this wine. As one of his last few vintages, prices could well be affected for wine which already commands some of the highest prices in the fine wine market.