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Chateau d’Yquem – 6 months on
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1st April 2011
By Thomas Gearing - Taken from the March 2011 issue
of the
Wine Investment Newsletter
Up
until 6 months ago the sweet wines from the
Sauternes and Barsac were banned from being imported
to China because they contain more than 250 mg of
sulphur per litre. Following the announcement that
the wines from famous estates such as Chateau
d’Yquem, Climens and Rieussec would officially be
allowed into China many commentators predicted that
these great wines would experience strong demand
from the Asian market which would in turn lead to
increasing prices. However, in the short time since
this announcement there has been little to no
movement in the price or demand for these great
wines. This has somewhat gone against the natural
conclusion that the wine would gain favour within
the Chinese community because of its taste,
marketability and prestige – so we are looking into
the current state and future prospects of Chateau
d’Yquem to better understand its position in the
Asian market today.
If we look at the current trading prices of recent
vintages of Chateau d’Yquem it’s clear that there
has been little to no movement in price since
September. Below is a cross section of notable Yquem
vintages:
Recent
speculation however has seen certain UK merchants
talk of large orders being made from the Far East,
with one well known merchant claiming to have sold
600 75cl bottles and 1,200 half bottles in one trade
to a Chinese customer. Perhaps the demand from the
Asian market has only started to take hold now after
a 6 month delay, considering there would have been
little or no presence of either marketing or
physical bottles in the Asian market before
September. The world record sale last May at a
Christie’s auction in Hong Kong which saw the
‘Liquid Gold Collection’ of 128 bottles and 40
magnums go under the hammer seems to refute this
argument however. The lot sold for a staggering HK
$8 million (US $1,032,336) – which clearly indicates
strong knowledge and appreciation for the wine, as
well as demand.
Perhaps the answer lies within the ownership of the
Chateau: Louis Vuittion Moet Hennesey (LVMH), the
world’s largest luxury goods conglomerate, which
bought the Chateau along with St. Emilion Grand Cru
Classé Cheval Blanc in the last decade. Their
marketing ploy has been somewhat mishandled in the
last few years and recent vintages have been
released at very high prices in comparison to
previous years. Despite this, there is no doubt that
parent company LVMH are in the best position to
exploit the Asian market – as many of their brands
dominate the most-wanted list of Hong Kong, Beijing
and Shanghai’s finest. Their well established
business network was further enhanced with the
acquisition of a majority stake in the Wenjun
Distillery - which make a premium baijiu (the
traditional spirit of China). These extensive
distribution lines within China will undoubtedly
help to push both Chateau d’Yquem and Cheval Blanc.
Looking
more specifically at the natural marketability of
Yquem to the Asian market, it seems this wine has
all the natural components for success. Ice wine is
extremely popular in China already; China itself is
home to the largest Ice Wine estate in the world at
Liaoning as well as being a top importer of Ice Wine
from Canada. With the many stories of Petrus mixed
with coca-cola and Lafite mixed with lemonade, there
will certainly be some degree of truth to this, and
with this in mind a naturally sweet wine in the
style of Chateau d’Yquem would suit the palate!
The wine already has an interesting translation in
Chinese, often cited as a pre-requisite for
popularity in the Chinese populace (Lafite/Lynch
Bages):
The characteristic of Chinese language is that they
will try to make the proper nouns with different
level of meanings – with Yquem being the perfect
example. 滴金 ( 滴 = drop & 金 = gold ) the
pronunciation of 滴金 in Chinese is "dict gum" which
is similar to d'yquem in French.
Considering the golden hue of the wine itself, the
name lends itself very well to the burgeoning wine
enthusiasts from the Far East and could well see
Yquem emerge as the Lafite of white wines.
Looking more specifically at the vintages of Yquem
which offer the best value and growth potential,
it’s notable that certain vintages of Yquem have not
been scored by Parker – 2002 and 2004 – with the
2004 being of particular interest considering Jancis
Robinson and other critic’s high scores. There is no
doubting the quality of this vintage, but without
the Parker score it has been able to fly very much
under the radar! The watershed vintage of 2001,
which scored 100 pts and received widespread
acclaim, currently trades around £4,500 per case.
There could be fantastic growth potential in even
the top vintages as in comparison to the hugely
popular first growth wines, they are at a
considerate reduction. With all this being said, the
demand for the wine needs to increase, but if it
does considering the Chateau has an average annual
production of 60,000 bottles the implication on the
prices of back vintages could be significant.
Verdict?
There is no doubt the ingredients are there and the
potential is huge, but at the moment it is a case of
getting involved before it starts moving.
What we recommend?
If you’re looking for the safe option then look no
further than the ‘top vintages’ of 1990, 1996, 1997,
2001, 2007 and 2009.
If however you are looking for a value stock then
the 2004 vintage, which currently un-rated by Parker
but of undoubted quality, could be the pick at
around £1,500 per case.
Conclusion:
With cases varying from £1,500 to £4,500 per case
depending on the vintage, then a small allocation of
a portfolio to this fantastic wine wouldn’t be a bad
move.
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