Brand, Timing & Vintage Appeal
Bordeaux still remains the hub and apex of the investment market. The top 40 châteaux still produce a tantalisingly small amount for the world market and can offer excellent returns for the investor.
The very top Chateaux such as Latour, Margaux, Haut Brion, Lafite and Mouton Rothschild are all blue-chip estates with excellent, historical track records. Purchase timing as with any investment is essential. Dependent upon leading critics and our own views, we may recommend that you purchase an ‘En-Primeur’ portfolio which is a method for purchasing wine early. Essentially, the wines are sold as ‘futures’ i.e. before they have been bottled.
Price: Typically, wines are purchased at the lowest market price. However, the 2011, 2012 & 2013 En-Primeur campaigns were fraught with overpriced wines. Fortunately the 2014 and 2015 campaigns released at good prices across the board. .
Provenance: This has to be one of the greatest advantages of purchasing En-Primeur. On arrival to the UK all purchases move straight into our bonded, temperature and humidity controlled storage facility. The wines are stored securely, in optimal conditions. Furthermore, En-Primeur purchasing gives buyers the assurance that they have owned a wine since before it was even bottled and they know precisely where the wine has been stored during its entire life.
Bottle Size: We are able to request ‘rare’ special bottle sizes prior to bottling.
The Fine Wine market today
Today the fine wine market is estimated to be worth €4bn which represents a fourfold increase since 2004. Merchants occupy 90% of this trade with the balance being auctions. As already said, the rise of new markets, such as Hong Kong and China, has driven growth in recent years. Of the US $400 million of wine sold at auction in 2010, for example some US $180 million or 40% was accounted for by Hong Kong alone.
Composition of a Fine Wine Investment portfolio
From an investment perspective the question now is: What separates fine wine from purely commercial wine?
First of all there has to be a strong demand on the secondary market. Then, it is also important that a wine has the ability to improve in bottle, that it has longevity and a record of excellence. As mentioned earlier, Chateau Lafite will last for 50 to 100 years and has an excellent reputation going back several centuries.
Today fine wine is rated by a number of highly regarded critics, some of them specializing in certain wine growing regions only. Traditionally, only wines that score more than 90 points are deemed to be worth buying.
From an investment point of view, we are talking about a surprisingly narrow universe of wines. The top 25 chateaux in Bordeaux and a handful of properties from other regions, like the famous Burgundy domaine, Domaine de la Romanée Conti dominate.