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DUNBAR FINE WINE / April 2003: So much to report on ...
The
FT100 is currently at 3899 and the Dow Jones
is 8414 exhibiting a small recovery of 10.9%
and 6.7% respectively. When we examine the factors that surround
the rise it is easier to understand why this has happened and what
may be in store for us in the next few months. There
is palpable relief that the conflict in Iraq would appear to be
over and the rise in the UK and US markets are a measure of this.
There however are concerns that the long term situation that now
exists may cause the US to spend in the order
of $30 - $80 billion (depending on whose estimate one believes)
to stabilise and reconstruct a very fragile country. Tax breaks of $700 billion have been announced in an effort to stimulate a lethargic US economy which is enjoying historically low base rates; the consensus being that these are medium to long term measures and will little benefit the US economy in the short term. The US airlines are in turmoil given the worldwide economic slowdown, the aftermath of 9/11, the Iraq situation and to cap it all - SARS. We have no idea what the final impact of SARS is going to be but a report is to be published later this week will probably indicate that the mortality rate is more like 10% rather than 5% because the virus has so far has been prevalent in a healthy adult population rather than a normal population that includes the young and the elderly. The latest is that cases have been confirmed in India. What effect this will have on the world markets is speculation but it is unlikely to be a positive one. Oil prices have fallen to the sort of levels that we had last year and OPEC has cut production in order to stabilise the market. It is possible that there are problems ahead as Iraq resumes its oil production with no restrictions to speak of, the world's industrial regions undergoing a prolonged slowdown and people becoming more reluctant to travel because of SARS, then demand will fall and OPEC will be required to cut production further. The UK wine market has been very active with Bordeaux 2000 being the SHINING STAR. Speculation was rife as to Robert Parker's final assessment on the wines and I can report that he gave 33 wines scores over 95 points and labelled them "Legends of Bordeaux's Greatest Vintage to Date" with 8 wines receiving the accolade of 100/100. Ausone, Lafite, Lafleur, Margaux and Petrus were some of the properties that got the 100 but it was so good to see properties like Tertre Roteboeuf get 98, Angelus 96, la Conseillante 96 and the extraordinary Hosanna in only its second vintage receive 96 points - exciting times for the Moueix team who fashion such compelling and wonderful wine! Hosanna 2000 was still available at £785 but given their magnificent score, the fact that it is a Christian Moueix wine from a very great vintage, who knows where the market will decide what the right price is for this gem? I am of the opinion that it is likely to be nearer £2000 than £1000 within a year or two and long term the sky is the limit! Château Hosanna is situated in the centre of the Pomerol plateau with illustrious neighbours of Château Lafleur to the north, Château Pétrus to the east and Vieux Château Certan and Château Certan de May to the south. It has an average annual production of one quarter that of Château Pétrus, its more famous stablemate and is made with all the care and dedication of that gives Pétrus its awesome reputation. It would not surprise me that collectors, connoisseurs and investors will be crawling over "broken glass" in their frantic efforts to secure a case or two. Do not say that you have not been warned! In February I reported that Lynch Bages 2000 had risen from around £500 per case, just before Mr Parkers ratings had been published it was £600 - £660 and there is still some room to rise given their score of 95+. Tertre Roteboeuf 2000 was priced from £965 to £1150 and more recently £1250, which is now an incredibly cheap price! The Bordeaux 2002 en primeur campaign had just got underway with 1st Growths being offered at £675+ which I consider far too expensive as I said in February's newsletter. It was very interesting that Jancis Robinson wrote an article in the Financial Times on 26th April where the enormously respected wine writer reported that demand had been "far from frantic" and that even this doyen of the wine world was now "tempted by more reasonably priced wines from Burgundy, the Rhone Valley….". Those with memories that go back several decades will remember the collapse of many famous Bordeaux négociants in the mid 1970's brought on by buying overpriced wine of generally indifferent quality from the 1972-1974 vintages. Who can forget 1984 where the wine trade was cajoled at best into purchasing wine that was massively inferior to that of 1982 and 1983 but sold its wine to the trade at higher prices than the previous excellent vintages? As I write, worryingly large amounts of the wines from 1997 have been dumped at below cost already this year as brokers and merchants attempt to free up working capital. What is different today though is that there are many other regions of France, Spain, Italy the United States and many countries in the New World that are making wine that is of terrific quality and competes extremely favourably on price. There is a new generation of wine drinkers who couldn't give "a fig" for prestige, terroir and history and would laugh at the concept of the excuses we make for some Bordeaux vintages, you know - it rained in September, there were bad frosts, there was not enough sunshine in August or there was a x, y, or z disease in the vineyards. Where else in the wine producing world does this happen; virtually nowhere!! There is nowhere on this planet where wine of the fabulous quality and quantity that is quintessentially Bordeaux, is produced. In my opinion they should price their wine realistically according to the quality of the wine on offer, the prices of their competitors and the economic circumstances of the markets that they wish to sell it into; failing that they should start building some very large warehouses in Bordeaux to hold what may be massive amounts of overpriced, unsold and unwanted wine. A price of £500 for the 1st growths from 2002 would stimulate demand and would sell well as they really would represent good value; the current price of £675 and the prospect of that being a rising price is not a viable proposition. I am now of the opinion that there are a very few wines from the Bordeaux 2001 vintage that have real investment prospects for the future, if you are interested then please call for advice…. The 2001 Rhones have come onto the market and give the informed purchaser a great opportunity to stock up on the last of the marvellous run of vintages 1998-2001. There were some fabulous wines made in 2001 and it would be an absolute shame not to have a few in ones cellar. There are still bargains in the market as some people have had to sell stock due to the drop in the financial markets and the requirement to realise assets, but these tend to be short lived as people like me snap them up for their clients. I know that it is unfashionable but vintage port can be such a thrilling wine to drink. Port is not selling very well at the moment so if you would like to put a case or two into you cellar of the 1980, 1983 or 1985 which are all drinking well and will continue to do so for some years to come then now is a very good time to purchase. I have recently sold some very good cases of 1994 Vintage Port in half bottles, which gave the clients 24 opportunities to sample the wine at just over £11 per half!! People who have purchased top class, investment quality wine during the past few years should feel very secure, in that the rest of the world for some time to come, are going to have to compete for what is out there already. If you purchased any of the top 33 wines from Bordeaux 2000, then rest assured that you have the equivalent of LIQUID GOLD in your portfolio. I am increasingly contacted by people who have paid an inflated price for their wine, I would advise that if you are offered a deal, please check first from a reputable source that: 1.
The wine you are being offered is from a property that has a record
of making great wine. We all know what a washing machine or a can of baked beans costs, but the vast majority of the drinking or investing public do not know that Chateau Cheval Blanc 1996 is worth about £1000 (trade price) and absolutely not the £3500 that one distressed investor was charged or that Chateau Domaine de Peyrelongue, St. Emilion Grand Cru 1994 and Chateau Grand Faurie, St. Emilion Grand Cru, 1994 are worth about £100 per case and not the £1000 charged. If you feel that you may have a similar problem, please do not hesitate in contacting me. As always take professional advice from people with a high degree of transparency. If you are looking for Fine Wine that is ready to drink, please consider the wines featured on the recommendations page, where you will be able to order quality wine at terrific prices supplied by some of the UK's finest wine merchants. To get the project off the ground I have chosen 5 wines that I think are great value and these are Dunbar Fine Wines Recommendations of the Month. The list may change during the month if a particular wine has sold out, or if there was little quantity to begin with. I want to see wine that I would want to drink, at a price that I think was remarkable value on the page, nothing less will do! You will be able to order quickly and safely. Let me know what you think and what you would like to see. Whether you are a wine lover, an investor or indeed a bit of both - please do not delay. Interest rates are down and set to remain at historically low levels for the foreseeable future. Fine wine as part of a properly balanced portfolio of investment can be capable of offsetting troubled times in other financial areas, and the rewards are absolutely tax-free. Call in to our website at http://dunbarfinewine.co.uk/investment.html to see for yourself how fine wine has historically been a first-class and consistent investment, when the wine is sourced from reliable suppliers and not some of the cowboys that have given our business problems in the past. STOP PRESS: Click here for this month's selection of fine wines for purchase
If you wish to discuss the acquisition of wine, please complete
the form in the Contact section.
December
2001 Newsletter - click here |
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