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Bordeaux is now deeply immersed in the promotion and early stage of the releases of the 2018 vintage. Amidst all this, Chateau Pavie made the enormously generous gesture of providing the rare opportunity for our private clients to visit the Chateau to experience the brand new vintage at this important stage in its launch onto the market.

Philippe Develay and the Chateau Pavie team hosted an extraordinary day for a select group of Vin-X clients who all owned Pavie wines, providing the very rare opportunity for private individuals to taste the new vintage at this very early stage.

The Chateau team organised a superb day – we were chauffeur driven from Bordeaux to St Emilion to the Perse family owned 2 Michelin*Hostellerie de Plaisance, probably the best restaurant in the Bordeaux region. Located in the heart of St Emilion. with magnificent views over the medieval town to the vineyards, we enjoyed an extremely special lunch hosted by Philippe in their private dining room accompanied with some excellent wines from the Perse family vineyards.

Lunch was spectacular enough, but the highlight of the day was of course the visit to Chateau Pavie, where we were driven around the vineyard and shown the unique terroir which is noted as being the best in St Emilion. Following a walk through the cellars where barrels of the 2017 and 2018 vintages were aligned in perfect rows to the magnificent vinotheque, where a precious archive of Pavie vintages are safely stored.

Finally, we reached the focus of the day in the magnificent tasting room of the Chateau where Elodie led us through a tasting of the 2017 and 2018 vintages, and then finally, unexpectedly, the very special 2012 – the watershed vintage for the estate – the first under its Grand Cru Classe A classification. Suffice it to say – the experience was sublime and a day we will all treasure the memories of.

Ultimately, for our clients, who are all owners of the 2017 vintage – they experienced their wine and the heritage and massive investment in the estate, not only in terms of finance, but time, skill and passion, combined with the unique terroir and history of this amazing Chateau.

Being able to experience the 2012 vintage was a great privilege and our clients received an insight to where their own wines will develop to in time. For many of our owners who bought the 2017 vintage – this was the first step in creating a special vertical linked to one of the very best wine producers in the world and with this in mind we will be securing Chateau Pavie for our clients on release – we will keep you posted.

Please register your interest for Chateau Pavie 2018 and En Primeurs now with the Vin-X team on 0203 384 2262.

CHATEAU PAVIE OWNERS – DON’T MISS OUT ON OUR HARVEST VISIT IN SEPTEMBER!

The post Pavie owners – the first Vin-X private clients to taste 2018 en primeurs appeared first on Vin-X.

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How does HMRC treat investments in fine wine? Our latest report, ‘THE TAX TREATMENT OF FINE WINE‘, is written by independent tax specialist, Peter Owen of Gatwick Enterprise Tax Services Limited, who has just published his annual review on the tax regime affecting fine wine and provides a ‘user-friendly’ explanation of how HMRC classifies fine wine, what benefits are available and what you need to look out for to ensure you invest and collect wine as tax efficiently as possible.

This special report looks specifically at the tax treatment of fine wine in the financial year 6thApril 2019 to 5thApril 2020 and is FREE and available to download now. Some of the key considerations are:

  • Buyer motivation – are you investing or trading and what are the tax implications?
  • Investors should not trigger Income Tax liability – but trader be aware.
  • Capital Gains Tax treatment – fine wine is normally exempt, but how is this determined and what should you be aware of?
  • Inheritance planning – fine wine is an easily transferable asset you can share and enjoy with your family and, as any gains are normally exempt from CGT, the report explains how the asset can be used in regards to IHT? 
  • Fine wine and EIS – the Government’s Enterprise Investment Scheme offers significant tax benefits for investors and fine wine companies which have been granted EIS approval and are undergoing an Offer for Shares which qualify for EIS can be an exciting way for investors to enjoy an interest in fine wine with the Scheme’s tax advantages.

As always, we remind you that everybody’s circumstances are different and you should always seek professional tax advice from your financial advisor.

For more information on specific wines, the current market conditions and investing in fine wine generally, please call us now on 0203 384 2262.

The post What are the tax benefits of investing in fine wine? appeared first on Vin-X.

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Investing in fine wine is the treatment of wine as a tangible, alternative asset with the potential to deliver a return on your capital over time. Fine wine performance is commented on regularly in mainstream media, but how do you invest in fine wine?

The key is to understand which wines are recognised by the market as being ‘investment-grade’ and then creating a fine wine collection or portfolio, which offers growth potential in line with the amount of capital you have available to invest and the time frame you want to hold your wine for.

What is fine wine?

What do people mean when they refer to ‘fine wine’? Ultimately, it’s a general term, it’s not prescribed or specified and some would say it’s subjective, as everyone’s palate is different. Most would understand that the term ‘fine wine’ applies primarily to red wine of consistent, very high quality with proven ageing ability and a high price tag.

The Official Classification of Medoc and Graves of 1855 was established, at the request of Emperor Napoleon III, to provide a ranking system for Bordeaux’s finest wines and is still key to guiding the global market today on Bordeaux’s fine wine from the Left Bank appellations. St Emilion also has its own classification (Right Bank) as do other wine regions but investors need further information when it comes to selecting wine for a fine wine investment portfolio.

Investment-grade wine

Perhaps more pertinently, what is investment-grade wine?  Wines which satisfy the following criteria are considered appropriate for investors to consider including in a wine portfolio:  

  • Brand: The wines are produced by chateaux and wine estates with the heritage and proven track record of creating consistently excellent quality wines to the extent that they are a recognised global ‘brand’
  • Quality: The highest quality fine wine as accredited by international wine critics with global reputations
  • Ageing and rarity: The ability of the wine to age and improve in quality over time and the opportunity for investors to enjoy growing value as it ages and becomes more rare
  • Finite supply: Fine wines produced in low quantities which have to satisfy global demand and reduce in supply as they are consumed over time support a strong long-term price performance
  • Demand: The wines enjoy such demand that there is a strong secondary market in them, ensuring the opportunity to exit profitably at a point to suit the investor
  • Provenance: Wines are selected from sources which can confirm excellent provenance, either direct from Chateau cellar or through supply where the wine has been kept in a bonded warehouse, or storage facility, which guarantees the required conditions to protect the quality and future value of the wine
  • Vintage appeal: the average overall score of a region’s vintage will determine whether collectively the vintage is a great vintage with a higher proportion of perfect to very highly scored wines, through to Mid and Off vintages where the average number of high scores will be increasingly lower but there will still be individually great, and valuable, wines. A Prime vintage is likely to add a premium value to all investment-grade wines in that year, so a Mid and Off vintage may offer opportunities to buy great wines at a slightly lower price but provide excellent growth potential as the best wines of the vintage, scored as highly as the same wine in a Prime year.
  • Liv-ex: wines which comprise the Liv-ex indices, providing performance benchmarks for a region are important for investors. Liv-ex is the stock-exchange equivalent for the fine wine market and provides a trading platform for over 400 international wine merchants. Pricing information is made available, providing market transparency and liquidity and performance benchmarks track values against financial markets and global commodities.

Our team focuses solely on those investment-grade wines produced by the top producers from Bordeaux, Burgundy, Champagne, Rhone, Tuscany, California and a few from Spain and Australia. These enjoy the status of being recognised as ‘luxury brands’ with collector appeal and active secondary markets and all have proven track records in terms of price performance and delivering returns to investors. These wines have outperformed equities, gold and other alternative assets over time and offer the opportunity for investors to diversify their portfolios into a tangible asset with the ability to protect wealth and enhance overall growth.

The benefits of investing in fine wine

As a tangible, alternative asset the following benefits can be enjoyed by those who invest in wine:

  • Performance– over the long term, the finite supply, ageing ability and global demand for fine wine delivers a strong growth performance which does not directly correlate with financial markets. It is consistently one of the top performing luxury assets.
  • Tax efficient– Capital Gains Tax does not generally apply on any growth due to HMRC’s classification of fine wine as a ‘wasting asset’ – individuals should always seek advice from their professional tax advisor.
  • Hedge against inflation and currency devaluation – investment wine is less susceptible to market downturns and adverse economic conditions. It can be used to counter the negative effects of inflation, movements in financial markets and can protect wealth over time.
  • Liquidity and flexibility – the secondary market in fine wine is well established and benefits from platforms such as Liv-ex.com which have helped create further price transparency, liquidity and market authority. We encourage investors to view fine wine as a medium to long term investment to optimise investment returns, but the asset can be sold at any time to suit personal circumstances. This is a considerable benefit, whilst the sector is not dynamic as financial markets, it provides much more flexibility than other tangible assets, most of which are more reliant on auctions and have very little clarity on values.
  • Portfolio diversification – fine wine asset performance delivers stable, long term growth and does not directly correlate with more volatile financial markets, which means that it can be used to diversify and de-risk an investment portfolio. Fine wine is an unregulated investment and this should also be considered.
  • Passion – Investing in wine is enjoyable – each wine has a unique history, there is a lot to learn about and enjoy, and many investors and collectors of wine do so because of the pleasure of owning fine wine.

How to invest in fine wine?

Being guided by a wine investment specialist is very important unless you are knowledgeable. The key steps are:

  1. Be clear about your budget– how much capital do you have available to acquire fine wine and remember that, like all investments, prices can go down as well as up and there are no guarantees on performance
  2. Time frame– how long do you want to hold your investment in fine wine?
  3. Wine selection– dependent on budget and time frame your fine wine specialist should help you to select investment-grade wines with excellent provenance that meet these targets
  4. Storage and insurance– your fine wine should be stored in a specialist bonded warehouse to guarantee advantageous tax treatment (Capital Gains Tax exemption and VAT and Duty charges will not apply unless removed from bond) and to protect the quality and future value of your wine
  5. Stay informed– monitor market performance and ensure that additions and changes to your portfolio over time are geared to achieve your investment goals. Our portfolio managers are dedicated to helping our clients to create rewarding fine wine portfolios.

For many, investing in wine is a new experience and we provide regular information to educate and inform, utilising Liv-ex performance data and industry news from the fine wine and investment markets. Our Vin-X Newsletter and regular Fine Wine Market Reports keep our clients aware of news and events which provide opportunities and may affect the value of their wines.

More investors are looking for alternative assets to diversify and strengthen their investment portfolios and Vin-X helps private individuals and organisations to understand the fine wine market and to create rewarding fine wine collections.

Our Guide to Fine Wine Investment offers a comprehensive introduction to investing in wine, the wine market, the tax treatment of wine, market fundamentals, investment-grade wines and performance.

The Vin-X Fine Wine Market Report will give you the latest fine wine performance data, top performing wines for investors and information affecting fine wine prices.

For more information on the Tax Treatment of Fine Wine see our report prepared by an independent tax specialist.

Finally, for more information on our specialist fine wine investment service, our fine wine experiences and the Vin-X team contact us by telephone on 0203 384 2262 or email info@vin-x.com.

The post Wine Investment: How do you invest in fine wine? appeared first on Vin-X.

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The Wine Advocate’s Bordeaux expert, Lisa Perrotti-Brown MW, is the second international critic of note, following James Suckling’s critique earlier in the month, to publish their analysis of the 2018 En Primeurs. In a report entitled “Extreme Vintage” she gives reference to the two-toned climatic nature of the year and the challenges presented to the region’s wine-growers.

In line with other critical views, she observes that there are a number of great wines but the vintage itself lacks the consistency of the superlative 2005, 2009, 2010 and 2016. Her top wines are set out in the table below but notably she points to a “rich and decadent” Ausone, a “powerful Latour … absolutely stacked with taut muscular cassis and savoury layers” and the Lafite 2018 sets a “benchmark” for the vintage.

Wine Advocate (LPB) Bordeaux 2018 top-scoring wines:

Bordeaux 2018 En Primeur wine: LPB score:
Ausone 98 – 100
Lafite Rothschild 98 – 100
La Mission Haut Brion 98 – 100
Latour 98 – 100
Leoville Las Cases 98 – 100
Petrus 98 – 100
Angelus 97 – 100
Cos d’Estournel 97 – 100
Lafleur 97 – 100
Margaux 97 – 100
Pavie 97 – 100
Vieux Chateau Certan 97 – 100

Source: Liv-ex.com / The Wine Advocate

Liv-ex also published the findings of its Member Survey of the Liv-ex 2018 En Priemurs this week which provides an indicator of the trade’s view. Overall the merchants opine that the vintage is not as “homogenous as press reports suggested”, some are concerned about alcohol levels, but many agreed that “it was a vintage where the best winemaking skills shone”. As usual, great emphasis was put on pricing and Members were asked to give a view on their expectations for the vintage release strategy. The survey found that the trade expects the 2018 wines to be released on average 15.61% higher than the 2017 release prices, but 4.86% lower than the 2016s. The key findings of the survey are:

  • Lafite Rothschild is the ‘trade’ voted wine of the vintage
  • The average vintage score overall is 95.5 – a touch lower than 2016’s 95.9 rating
  • 69% of merchants surveyed stated that they expect higher demand for 2018 wines than 2017, but this would be dependent on price

The Liv-ex Members top ten Bordeaux 2018 En Primeur wines were voted as:

1 Lafite Rothschild
2 Cheval Blanc
3 Vieux Chateau Certan
4 Petrus
5 Lafleur
6 Mouton Rothschild
7 Pichon Lalande
8 Calon Segur
9 Margaux
10 Ausone
  Haut Brion

Source: Liv-ex.com

Antonio Galloni’s scores on the vintage are due out this week and we will have to wait until later in the year for Neal Martin’s opinion. In the meantime the first release prices are giving mixed messages on the overall pricing strategy. We commented last week on Angelus’ brave decision to be the first off the blocks at a discount of 8.9% on its 2017 release price. Other early releases fail to provide clarity on an overall Bordelaises’ pricing strategy and none of the other investment-grade wines have issued their release price yet. The 2018 vintage will be particularly price sensitive as a result of Brexit and influences outside of Bordeaux’s control.

We will continue to monitor the market and advise our clients on any wines we believe present a sound investment opportunity. To register your interest in receiving information on 2018 En Primeur wines please call us on 0203 384 2262.

The post The Wine Advocate and Liv-ex Member Survey ranks top Bordeaux 2018 wines appeared first on Vin-X.

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Which 2018 wines should you be looking to include in your portfolio planning? The determining factors of a successful Bordeaux futures campaign are quality, price and supply. Buying wine en primeur has pros and cons as we refer to in our website and have commented on previously. In recent years there has been a mixed market response following the heights of the 2009 and 2010 campaigns. During the period between the 2011 to 2014 in-barrel releases, the UK trade increasingly took the view that excessive release prices were undermining the rationale of buying wine at this stage, as the prices were not sustainable and in fact back-vintages in bottle were offering better value.

The Prime 2015 and ’16 vintages, with higher average quality overall and priced more reasonably, improved confidence in the En Primeur system, however in the last few years some of the top chateaux have also had a changing view on volume made available for the en primeurs. Latour led the way exiting the en primeur campaign in 2012 and now a number of chateaux have reduced the supply being released at this stage to secure better prices in bottle.

So now here we are with the 2018 vintage, the key critics are starting to publish their quality scores, James Suckling has declared that it is “ An exceptional year for Bordeaux wines … Is 2018 a new benchmark for the region?”, awarding Lafleur, Mouton and Petrus the perfect 100 point score and a further eleven wines with the potential to hit 100 points in bottle.

James Suckling’s top 2018 en primeurs:

2018 Bordeaux wine Score
Lafleur 100
Mouton Rothschild 100
Petrus 100
Angelus 99 – 100
Ausone 99 – 100
Beausejour Duffau 99 – 100
Eglise Clinet 99 – 100
Latour 99 – 100
Lafite Rothschild 99 – 100
Leoville Las Cases 99 – 100
Margaux 99 – 100
Rauzan Segla 99 – 100
Dom Chevalier 99 – 100
Vieux Chateau Certan 99 – 100

Source: Liv-ex.com

Jane Anson, Decanter Magazine’s Bordeaux expert describes 2018 as “a very good vintage – maybe even great “. She cautions that it is not a universally consistent vintage and buyers need to select wines carefully – “Perhaps the closest we can come to a definition is 2009 meets 2016 on the Left Bank, and 1998 meets 2015 for the Right Bank.”

The other key critics still to publish are Wine Advocate’s Lisa Perotti-Brown and Antonio Galloni for Vinous.com. Neal Martin will not taste the vintage until later this year due to illness but his view will be eagerly awaited.

Chateau Angelus is the first big name to release before the Easter weekend and it is a big deal for such a high profile wine to release this early. We can look at relative value by comparing price and quality score – Angelus 2017 was rated at 95 points and is currently trading around £2,800, in comparison Angelus 2018 has been awarded 99 – 100 points by Suckling and is currently trading on Liv-ex (trade price 12 x 75cl) at £3,060 – 8.9% cheaper than the 2017 release price of £3,360.  At this price level the 2018 Angelus offers value compared to a number of earlier vintages. 

Jane Anson has also noted that this was the first Angelus vintage where the Chateau “worked entirely organically, with a 32hl/ha yield from the harvest” and the wine aged in amphorae for the first time as well as 100% oak barrels. She scored Angelus 2018 98 points, describing it as “rich and complex … showing dense brambled fruit with real precision of expression.”

Angelus’ strategy to be the first release may be an intelligent manoeuvre as it is currently the ‘only show in town’ and a very highly scored wine, priced at a discount to last year and other vintages. This may make commercial sense. Cos d’Estournel adopted this stance last year and it paid dividends both to the negociants and buyers at this stage. However, many merchants will want to get the lay of the land, in terms of quality and pricing, and with only Suckling’s quality indicator at this stage and no other view on pricing strategy it will be premature for many. It could be that other Chateaux will offer further discounts – it is too early to tell.

Another key influencing factor this year includes the Brexit effect, which is not as potent right now as a result of the deferred deadline to October. This could reasonably be expected to give essential breathing space for Sterling over the next couple of months, but there is no certainty on that.

Back to the original question – which wines should investors be considering? Suckling has given his view and we await the other key critics. Normally, the chateaux will start to release and announce prices during May to June and we can expect to get a real feel for the overall vintage quality and how the Bordelaise value it over the coming weeks.

Over this period we will select the wines we believe offer the best opportunity for growth for our clients. For more information contact us 0203 384 2262.

The post Which 2018 En Primeur wines should you be looking at? appeared first on Vin-X.

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Fine wine trade buyers and critics from all over the world were in Bordeaux last week to taste the 2018 crop and the market is now waiting for the quality scores first and then the release prices which will start to hit the market in May. So should you invest in the 2018 en primeurs?

A complicated vintage climatically, with the first half of the year experiencing prolonged periods of rain. The region experienced an average 12 months rain falling between January and July. Hailstorms created vineyard stress and water reserves in soil were extremely high, but this subsequently paid dividends, protecting vines during hot conditions from July  through to harvest. Cool nights and hot days late season helped to achieve a rare freshness and aromatic complexity and Bordeaux has great expectations for this vintage.

Quality

Winemakers across the region believe that 2018 is “a highly desirable vintage in-barrel” and the Union des Grand Crus, in a recent press release, stated that it is an “outstanding vintage for the region”. It is still too early to confirm whether this is a prime or mid-quality vintage as we are still waiting for the top critics’ views, but an early indicator has been provided by Jean-Marc Quarin, who scored a number of wines the perfect 100 points, as can be seen in the table:

2018 WINE Jean Marc Quarin score
Calon Segur 100
Cheval Blanc 100
Lafleur 100
Latour 100
Margaux 99 – 100
Ausone 99
Mouton Rothschild 99
Trotanoy 99
Angelus 98
Belair-Monange 98
Canon 98
Cos d’Estournel 98
Leoville Las Cases 98
Montrose 98
Palmer 98
Pavie Macquin 98
Petrus 98
Pichon Longueville Baron 98

Source: Liv-ex.com, April 2019.

Key observations from Quarin includes Cheval Blanc 2018, of which he stated that “he had never tasted Cheval Blanc at this level at En Primeur” and that Latour and Lafleur also deserved their perfect points.

From a critical perspective 2018 will be interesting as we are another year on from Parker’s retirement from appraising Bordeaux. Neal Martin is only just heading the pack in terms of influence when it comes to a view on Bordeaux, and he will not be tasting the 2018 en primeur until later this year due to illness. There will not be one voice guiding the market this year for sure, and the value of an overall average critical score is becoming increasingly apparent. There will probably never be another Parker – as we keep saying those Parker 100 pointers will become evermore collectable, and valuable, over time. 

Why invest in en primeur?

Does buying wines en primeur provide investor benefits? You can see our guide to the benefits and risks of investing in wine en primeur on our website. The original rationale for purchasing wine futures (as this process can be described) was:

(1) to guarantee an allocation of highly sought after fine wine which may be difficult to get hold of, and

(2) to benefit from a lower release price (which historically was the lowest ever price of a wine) with some discount for upfront payment before physical receipt of wine.

However, such was the demand for the top wines of Bordeaux ten years ago, the chateaux, negociants and early supply agents increased the release prices over the 2009 to 2014 vintages to such an extent that the prices were unsustainable. This was combined with a general slump in the market for Bordeaux during the period, and the 2011 – 2014 vintage campaigns struggled. Whilst Bordeaux pricing became slightly more realistic in time for the excellent 2015 and ’16 vintages there has been increasing market scepticism about the benefits of buying fine wine en primeur.

Price is looked at much more keenly and some chateaux have responded by reducing the volume of wine they make available for sale en primeur. Latour famously withdrew from the Bordeaux en primeurs completely in 2012, and their wines are now released by the Chateau when they are ready to drink and at a premium. The trade in Latour on Liv-ex has drifted since the withdrawal, but price has held and other chateaux, whilst not completely exiting  the en primeurs process, have certainly reduced supply made available.

Supply, demand and Brexit

The vintage is expected to yield more supply than 2017, which suffered significant frost damage. The chateaux are known to have held back supply of the prime 2015 and ’16 vintages which may naturally correlate to reduced levels of 2018 being made available, however it is a more bountiful vintage overall. The supply strategy will be interesting.

But one of the key influencing factors unique to the 2018 vintage will be the ‘Brexit effect’. The UK merchant take-up accounts for the majority demand for Bordeaux en primeurs and the back-drop of the increasing political and economic confusion over Brexit could have a marked impact on the campaign. Should Sterling suffer significantly in the next couple of months, UK demand would be affected, the Asian market does not tend to buy en primeur and it is unlikely that the spare capacity would be absorbed by North American and European buyers.

Merchants and collectors hold a fair quota of young Bordeaux with significant demand in the last couple of years for the superlative 2015 and 2016 vintages. 2018 will have to be critically strong and most importantly priced right to stimulate high demand at this time in the UK. Hopefully, the Bordeaux negociants will consider this in their pricing strategy but with Brexit see-sawing on an hourly basis we expect that release prices and volumes will be judged carefully and timing may well be linked to any Brexit deadlines that arise in the coming days.

How to invest in en primeurs?

Buying fine wine en primeur can be likened to buying a ‘future’. In essence you are acquiring an allocation equivalent to a case of 6 x 75cl, 12 x 75cl or other standard format. The wine stays in barrel at the Chateau and then once bottled, normally 2 to 3 years after harvest (for example, the 2016s are being delivered now), it is shipped to your ‘In Bond’ account, in the UK. You can sell your en primeur allocation before it is bottled should you wish to and the en primeur prices are available, for example 2017 en primeur allocations are still available to buy now.

Stay informed

We will be watching the scores as the critics publish over the coming days and then, most importantly, the prices over the next couple of months as trade commences in 2018s. We will keep you informed about those wines we identify as offering growth potential for fine wine investors.

For more information call us now on 0203 384 2262.

The post Should you invest in Bordeaux 2018 En Primeurs ? appeared first on Vin-X.

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We publish this month’s Vin-X Fine Wine Market Report at the time of year when the industry’s focus shifts to the new In-Barrel Bordeaux vintage. Merchants and critics from around the world will be packing their notebooks and heading off to Bordeaux next week for the 2018 en primeur tastings. For the region, it is the first real public indicator of the quality of last year’s crop, and is strategically an incredibly important stage in determining the overall value of a vintage for the Chateaux owners. And all this with the backdrop of extreme political uncertainty in the UK, the key market for Bordeaux futures!

Whilst values since 2015 have, on average, recovered much of the lost ground following the market peak of 2010, the broadening fine wine market has seen a lowering average market share by volume in Bordeaux wines traded on Liv-ex. That is one factor which, in our view, should be borne in mind by the negociants when considering  their release prices for this year’s campaign. But, perhaps more significantly in the short term there is also another, extraordinary influencing factor in Spring 2019 and that is Brexit!

Right now, nobody can really comment with any level of authority about the impact of Brexit on 2018’s en primeurs campaign. The UK Parliament has wrestled the reins, whether that is temporarily or not, out of the hands of Theresa May and nearly 3 years on from the Referendum we are not that much clearer on our future relationship with Europe and what impact that may have on the key market for Bordeaux en primeur wines this Spring.

With all of this going on, Liv-ex has set out its current thinking on Bordeaux 2018 in a special trade report ahead of the 2018 en primeur tastings. The key observations are:

  • Market status: The 2018 campaign will take place in a market strongly affected by Brexit uncertainty – the UK is the foremost market for Bordeaux en primeur sales and currency dynamics may have an impact
  • Demand: Bordeaux’s reducing market share (not price) may impact on demand especially as the consecutive excellence of 2015 and ’16 and lesser appeal of mid-vintage 2017 has resulted in sizeable volumes of young Bordeaux in the market.
  • Supply: 2018 production was of a decent size but some key appellations; Pauillac, St Estephe and St Julien suffered reduced yields due to frost and mildew. Chateaux are also holding back supply to the market with the aim of achieving higher prices at a later stage, particularly for the Asian market which tends not to buy en primeur
  • Pricing: 2018 is deemed to be a highly desirable vintage in barrel but the negociants must ensure that the release prices reflect the vintage quality AND the current market conditions with deepening political uncertainty in the key UK market.
  • Critical view: Neal Martin has announced he will not be tasting the wines until later in the year so a key critical view will not be expressed during the campaign.

During our visit to Bordeaux in February we got the earliest whisperings on the vintage and for those prepared to comment at all ahead of the industry tastings in April the indicators are that 2018 has the early characteristics of a seriously good Bordeaux vintage. We will expand on the 2018 campaign in our April report post the trade tastings.

Download your free copy of the Vin-X Fine Wine Market Report here and for further information call us on 0203 384 2262.

The post Will Brexit suck the energy out of the 2018 En Primeur Campaign?      appeared first on Vin-X.

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The ten-year tasting of Bordeaux’s 2009 vintage is probably the most highly anticipated review for a number of years. Parker’s en primeur scoring of the vintage in Spring 2010, where he rated a staggering 18 wines the perfect 100 points, broke all records and moved markets.

The market timing for such a great vintage was spectacular, with the 2009 en primeur releases coinciding with the entry of a new wave of Chinese consumers into a prevailing bull market. The quality of the 2009 vintage helped drive extraordinary price heights which the market then struggled to maintain.

The industry’s current top critics tasted the key 2009 Bordeaux wines recently, at the vintage’s ten-year anniversary, and the first scores have just been published (15thMarch, 2019). Notably, the man who established 2009 as possibly ‘the greatest vintage since 1982’ will not be publishing his professional view at this key stage, or ever again. We commented recently on Parker’s rating of the 2009’s. The table shows the updated scores on Parker’s 100 point wines of the vintage just published by Wine Advocate’s Lisa Perotti-Brown MW and Neal Martin, now of Vinous.com:

2009 Wine

Scores

Parker LPB NM
Beausejour Duffau Lagarosse 100 91
Bellevue Mondotte 100  
Clinet 100 96 95
Clos Fourtet 100 95 95
Cos d’Estournel 100 100 91
Ducru Beacaillou 100 98 97
Haut Bailly 100 97 94
Haut Brion 100 100 97
La Mission Haut Brion 100 100 97
La Mondotte 100
Latour 100 100 99
Le Pin 100 100 97
Leoville Poyferre 100 98 96
L’Evangile 100
Montrose 100 100 98+
Pape Clement 100  99 93+
Pavie 100 100 96
Petrus 100 100 98
Pontet Canet 100 100 95
Smith Haut Lafitte 100 94

Parker – Robert Parker Jnr, Wine Advocate

LPB – Lisa Perotti-Brown, Wine Advocate

NM – Neal Martin, Vinous.com

Neal Martin, Parker’s original successor at Wine Advocate, is without doubt a more parsimonious wine reviewer than Parker, with under 30 100-point scores in his archives. For context Parker scored more than half that at 100 points in just this vintage.  Anyone expecting similar heights from Neal Martin was setting themselves up for disappointment. He comments on the vintage; “2009 was Mother Nature’s astounding, dribbling run through the length of the growing season, weaving past tackles from frost, rain and rot, that ultimately led to the ball being placed on the penalty spot. All man had to do was score the penalty and as we all know, especially if you are an England fan, the ball does not always end up in the back of the net. So whilst Mother Nature had played its part in furnishing vignerons with a surfeit of splendid, superlative-ridden fruit that does not necessarily translate into superlative-ridden wine…in terms of consistency, 2009 falls short of 2005.”  Lower scores from Martin on Cos d’Estournel and Pavie in particular are no surprise to those who follow his writing, but in the context of his generally lower scores, 2009 still counts as a spectacular vintage. 

Martin highlights Latour 2009 (our favourite at one of the tastings both critics attended in February) as the only wine he was tempted to bestow anything near the perfect score on, and suggests that another five are “orbiting around planet perfection”. 

Lisa Perotti-Brown is a little more effusive in her praise, and in any other context, ten 100 point scores from the Wine Advocate’s current Bordeaux specialist, she awarded Cheval Blanc 2009 100 points, upgraded from Parker’s 99 point score, would be seen as extraordinary. Both critics are happy to endorse Parker’s view that  2009 is certainly one of the greatest vintages since 1982.

The wine trade (including ourselves) is known to describe 2009 as a “Deckchair Vintage”, where winemakers only had to show up to make great wine – of course, we know that this is unfair on the vignerons! The vintage crop was rich in both quality and quantity affording winemakers the opportunity to maximise the attributes of their ‘grand vin’ by selecting only the finest lots to go into it. The First Growths also used all of this bounty to really progress the quality of their second and even third wines.

This strategy paid dividends as all of the First Growth 2009 second wines have increased in value since release, as buyers sought the exceptional quality of the wines produced by these great houses but without the grand vin price tag. Liv-ex reports that Petit Mouton leads the way up 220% and currently at its market peak at £2,400 (12 x 75cl), Pavillon Rouge has grown 92% and Carruades Lafite up 41%.

This landmark ten year tasting is perhaps an opportunity to look again at the Parker effect and whether his successive critics enjoy any similar level of influence over the market. As referred to above, Parker’s original scores at this vintage release had a significant impact on the market. A more recent example can be seen following a tasting of wines from the 2009 vintage at the Magdelena Restaurant in Baltimore in 2016, after which Parker published his opinion in the Hedonist Gazette. He commented that wines such as Haut Brion, La Mission Haut Brion, Cos d’Estournel and Montrose were all living up to their 100 point billing and that the Cos was a “monumental wine that may well go down in history as this vintage’s 1947 Cheval Blanc.” But perhaps the key illustration of Parker’s influence was as a result of his ‘unofficial’ rescore of Pape Clement 2009, which he upgraded from his original rating of 95 points to 100. Shortly after the publication Liv-ex announced a 35% increase on its trade price, up from £835  to £1,130.

In terms of any influence on trade and values when the rescores were published on Friday 15thMarch,  there has been no immediate response over the weekend and trading levels have remained within current norms.  It’s early days yet but what is not in question is that wines awarded 100 points by Parker will have growing collector appeal as their global supply reduces and those from his highest average scored vintage are an important focus for investors.

For more information call us now on 0203 384 2262.

The post Bordeaux 2009 – will the critics’ scores move prices? appeared first on Vin-X.

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Property investment specialists, Knight Frank, have just published the 2019 edition of their annual Wealth Report which is recognised as one of the few independent sources of publicly available information on private wealth investment trends and what assets interest and influence Ultra High Net Worths (UHNWs) and High Net Worth (HNW) investors around the world.

The 2019 Report looks at property and the top luxury investments’ data from the 12 months of 2018 and a cumulative ten year performance. Consistent Fine Wine remains a top three luxury investment in terms of performance but it has to be the winner when you look at liquidity, transparency and the ability to convert to cash.

For the first time Whisky makes an entry into the Knight Frank Luxury Investment Index (KFLI), showing a 40% growth last year and  582% uplift across the last ten years. Auction sales of rare single malts have hit the headlines and the sale of the single bottle of 1926 The Macallan with the hand painted bottle design by Michael Dillon,  which sold for US$1.5million, was a classic example.  (Image: Chateau Pavie Cellar: photo Mr Serge CHAPUIS.)  

The whisky investment trend has gathered some momentum in the last few years and new Asian consumers and collectors are a key driver of this movement. This current surge in demand may have parallels to the demand for Bordeaux through the late noughties, which drove the market in the First Growths in particular to unnaturally high values which subsequently impacted negatively on the wines of the region during the market correction in 2011 – 2014.

Extreme rarity of supply of single malt whisky with the pedigree to attract investment is initially the significant factor in terms of the values being achieved. Other considerations are that there is very little liquidity in the market, there are questions over valuations and the tax treatment is not as advantageous as that enjoyed by fine wine. That said, Knight Frank have included a sizeable commentary on whisky as an investment asset, no doubt a result of its performance last year, which may largely have been influenced by the 1926 The Macallan / Dillon sale.

Of the ten luxury assets included in the KFLI, rare coins tend normally to be a bit of an ‘also ran’, but in 2018 there was some interest in the market which produced a 12% average growth with the headline sale of the 1621 Polish 100 ducat for US$2.2million.

TOP LUXURY SALES IN 2018:

ASSET CLASS ITEM VALUE AUCTION HOUSE
Art David Hockney: ‘Portrait of an Artist (Pool With Two Figures)’ US$90million Christies
Whisky The Macallan 1926, Michael Dillon US$1.5million Christies
Jewellery The Marie Antoinette Pearl Pendant US$36million Sothebys
Watch The 1970 Rolex Daytona ‘Unicorn US$5.9million Philips
Classic Car 1962 Ferrari 250 GTO US$48.4million Sothebys
Fine Wine 1 75cl bottle of 1945 Domaine de la Romanée Conti, DRC US$558,000 Sothebys
Stamps A 1918 Jenny Invert 24 cent. stamp US$1.6million Robert Seigel
Coins A 1621 Polish gold ducat US$2.2million Christies

Source: Knight Frank Wealth Report 2019

Fine wine is consistently in the top three luxury investments acquired by UHNWs and HNWs around the world. The asset topped the KFLI in the 2017 Knight Frank report which reviewed performance over 2016. This was, of course, the year of the Brexit referendum vote which triggered a movement in Sterling and demand for tangible assets which saw fine wine see average growth of nearly 30% in that year. Last year’s Wealth Report covered 2017 and fine wine was ranked second behind Art in the KFLI, this as a result of the record breaking sale of Leonardo da Vinci’s Salvator Mundi for US$ 450million ($500million including auctioneer’s commission). This 2019 Report’s review of 2018 activity sees fine wine ranked third, with average 9% growth and demonstrating the asset’s consistency as a top performing luxury investment.

The philanthropic investments of the super-rich and the potential impact of the application of new innovations is also touched on and the report touches on block chain which we see of particular interest when it comes to provenance and the prevention of fraud. Block chain could provide an easily consultable public record which could simplify ownership and the potential to solve some of the challenges involved with the ownership and trade of luxury collectables.

Knight Frank include an Attitudes Survey in their Report which is based on responses from 600 private bankers and wealth advisors who manage over US$3trillion between them for their UHNWI clients. Key observations from the survey which was undertaken in October and November last year in regards to luxury assets such as fine wine are that:

  • a global average of 28% of their clients actively own investments of passion
  • an average of 4% of their clients wealth was invested in luxury assets
  • forecast this to grow by 5% in 2019
  • they expect 39% of their clients to start investing in luxury assets in 2019

Read the Knight Frank Wealth Report, see our latest Fine Wine Market Report and call us now for more information on creating a rewarding fine wine portfolio on 0203 384 2262

The post Knight Frank ranks fine wine in top 3 Luxury Investments in 2019 Wealth Report appeared first on Vin-X.

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Our latest Fine Wine Investment Market Report provides information on the market trends and specific wines to aid investors and collectors when considering their fine wine portfolio planning for the year ahead.

The Report reviews the market performance in 2018 and compares the key Liv-ex indices with the FTSE 100, the S&P 500 and gold. Across 2018 all of the Liv-ex indices outperformed equities, the Liv-ex 100 and 1000 benchmarks rose by 213.9% and 258.2% respectively compared to US equities growth at 143.9% and a weaker UK stocks’ performance at 59.2%.

Burgundy wines were key drivers for sector growth over the year, Liv-ex’s Burgundy 150 index grew by 34.9%, Bordeaux saw relatively static performance and the broader Liv-ex 1000 index grew by 10% in 2018. Equities obviously had a challenging year and the FTSE 100 saw a decline of -12.5%, the S&P -6.2% and gold saw just 3.9% rise in 2018. This data all makes a case for including fine wine as an alternative asset in portfolio planning. Our tip of the month is a Burgundy wine priced at a superb entry price for investors looking to make their first purchase of wine from this top performing region.

The Vin-X Report looks at performance during the first month of 2019 and focuses on key areas for growth for the first half of 2019. The ‘spotlight’ is focused on Burgundy whose top price performer saw over 200% growth in the 2018 Power 100 Report published at the end of the year. The top ten most powerful Burgundy brands in 2018 are noted and DRC’s performance is tracked against listed luxury brands Apple, LVMH and Hermes.

Parker’s highest ever average scored vintage – the spectacular Bordeaux 2009, has just been retasted and the industry awaits the publication of the critics’ scores ten years on – of particular interest will be those wines tipped for potential improvement upward from 98 towards 100.

Finally, the report also looks at the Bordeaux 2016 vintage, currently being bottled and shipped. Liv-ex has reviewed price performance of these wines against other years and deem it to be currently undervalued with two thirds of the 2016 wines in the Bordeaux 500 index offering good value for investors.

Download our report here and call us on 0203 3842262 for more information.

The post Vin-X Fine Wine Investment Market Report February 2019 appeared first on Vin-X.

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