Real estate, alternative real assets and other diversions

What to buy in wine this quarter

Uncorked

With Bordeaux and Burgundy offering lacklustre returns, the trading focus has moved to Piedmont, Champagne and the Rhone Valley

The second quarter of 2019 was largely tranquil for the fine wine market, with trade bobbing along nicely but no particular surges or dips. Global stock markets enjoyed a rise after Messrs Trump and Xi found some accord over US-China trade relations, but this does not yet seem to have inspired the wine market. Wine stock levels are healthy among Asian traders, so not even a continuing depressed sterling is bringing much marginal demand from that corner – nor is it from the US. Recent political developments in Hong Kong have made traders cautious, both in Asia and Europe, and of course Brexit continues to loom. The wider wine market needs the feel-good factor to make it motor, and that appears to be in very short supply these days. With all of this in the price, any better news will surely have a positive impact.

The 2018 Bordeaux en primeur campaign came to an end with an almighty whimper. En primeur gets under the skin of the wine trade, and all involved spend far too much time talking, writing and moaning about it… even so, I shall continue! Within the wine markets it has represented very poor relative value for a decade, as prices are just too high, yet merchants dare not turn their backs on this once great provider. It used to be an excellent system for all involved, including the man on the street. But now only a very few wines ‘work’ each year, making sense for both the supply chain and the end buyer. And to compound the problem of high prices, the chateaux have decided to retain more and more of their own stock. How and when this comes to market, and at what price, will fuel debate, but based on the evidence of the mighty Chateau Latour, the market may just turn its back. The sense of stock overhang may easily outweigh the eeling of short supply, and it’s not as if the world is going to go thirsty; there will always be alternative choices.

The last but very important point regarding the ’18 vintage – a point largely ignored by the salesmen and one that bears repeating – is that while certain of these wines are very impressive, incredibly concentrated and yet well balanced, they are really, really big. Nearly all the alcohol numbers are between 14% and 15%. The poor unsuspecting punters may get quite a shock when they sit down, some time from now, to enjoy their excellent claret only to discover they have something they weren’t quite expecting in their glass.

If only our Italian friends came together with a synchronised offering, we could have a proper old-school primeur market again. All the market players would have to be involved at the same time, jostling for position and scrapping over every six-pack, and would still be able to sell at a price that would make everyone happy. The hype that the merchants used to create in Bordeaux primeur markets, from which we are all still hungover, could be regenerated. We all miss that excitement; it created fear and greed among the white-faced, panic-stricken collectors and consumers, desperate not to miss out – heady days!

As it is, Italian releases come to market in no organised way, and importers and merchants release when they feel like it. It’s all very Italian, really, but it does make buying easier.






Uncorked, zLead Article, zNewsletter

About Miles Davis

Miles Davis

Miles Davis is a guest contributor from Wine Owners (www.wineowners.com), the fine wine collection management and investment platform based here in London. Miles is a professional wine consultant working in the fine wine market. He has been a wine collector for thirty years and managed wine investment funds between 2006-17 for Wine Asset Managers LLP.

Articles by Miles Davis

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