LUXURY INVESTMENT INDEX
Point taken — It’s not only Old World
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Interestingly even the high spending Chinese Billionaires who are leaping feet first into fine wine investments are also taking an interest in ‘New World’ wines. “They (Chinese wine buyers) enjoy investment-grade wines for their high quality and blue-chip status. Wine knowledge is growing rapidly and collectors are broadening their tastes from top Bordeaux to Burgundy, Champagne, Rhone as well as top California, Spanish and Italian wines,” said Robert Sleigh of Sotheby’s. Those in search of investment quality wines are urged to evaluate some of the excellent new world wines that are now achieving
NOVEMBER / DECEMBER 2013
Wine industry experts expect severe shortages of fine wines to cause rising prices in 2014.
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Wine Trade
record prices at the auction block. For instance A 12-bottle case of 1982 Petrus, (as mentioned above - a top winegrower from Bordeaux' Pomerol region on the right bank of the Dordogne), sold for HK$479,700 (USD $61,900) at an Acker Merrall & Condit auction in Hong Kong. Signs of increasing demand for a broad range of California, Bordeaux and Burgundy wines drove prices at the Acker Merrall & Condit Hong Kong sale. A rare case of Cabernet Sauvignon from the inaugural 1992 vintage of Napa Valley grower Screaming Eagle fetched HK$442,800 (USD $57,100), Acker said in an e-mailed statement. Six bottles of 1966 Chateau Haut-Brion, a Bordeaux first-growth producer, sold for HK$108,240, above its presale estimate. The event comes after six months in which recent vintages of top Bordeaux growers have struggled to generate buying interest as collectors have sought wines from alternative regions. Wines from leading producers and ready-todrink vintages in France, Italy and the U.S. are attracting more bids both at auction and in the broader wine investment market. Many investors have neither the will, nor the time, not indeed the expertise to choose from
ISSUE 01
and in the last twelve months right bank average prices have increased dramatically, increasing on average by around 12% compared to low single digit growth on the left bank. For those who might want a little bit more information, the main river in Bordeaux is the Gironde; two smaller rivers, the Dordogne and the Garonne, feed into it. If you're standing in Bordeaux facing west, toward the ocean, the "Left Bank" is south of the Garonne and Gironde rivers, and the "Right Bank" is north of the Dordogne and Gironde Rivers. (The area in between is known as EntreDeux-Mers.) While red Bordeaux wines are blended together from Cabernet Sauvignon, Merlot, Malbec, Cabernet Franc and Petit Verdot grapes, the Left Bank vineyards are dominated by Cabernet Sauvignon, while the Right Bank ones focus more on Merlot. There is evidence to indicate that the premium prices for wines such as Petrus are dragging the rest of old world market upwards. Some might say that these prices are unrealistic, however, the limited supply and the Veblen Goods effect are certainly playing their part, as is the undoubted quality of these wines.