In a month when there was wider financial market uncertainty, a standoff between China and the EU over solar panels and wine imports and a continued fall in the price of Gold – wine managed to hold pretty steady in comparison. This time last year, the disastrous 2011 en primeur campaign put paid to the first quarter gains as stock holders were forced into a sell-off to provide capital for EP allocations that weren’t selling. Many could be forgiven for expecting the same to happen this year, but in the month when one would expect the most damage to be done, it was in fact markedly flat and that’s a good thing considering how the financial markets in general have been behaving.
It seems that the sell-off that encompassed the general wine market last year, has only really affected the 2010 vintage this year. With stock of the 2010s still available in good enough quantities in Bordeaux a lot of the market plays this month have been in the sale of these wines to support the EP2012 campaign. As a result we have seen prices soften a little for the top 2010’s. Pontet Canet for example, despite being a double hundred wine (Parker & Suckling) has fallen to c. £1,525 per 12 from a high post-Parker scores in March of £1,650. This can be seen with Montrose, Pichon Baron, Pape Clement and Lafite to name a few. The good thing to take out of this, is the drops aren’t that significant and with the 2010’s long term investment potential assured it actually signals to us a strong buy play for those interested in picking up top quality stock. Furthermore, with their being a small number of genuine good buys from the 2012 vintage this year such as Lafite, Mouton, Pape Clement, La Mondotte, Lynch Bages, Rauzan Segla, Gazin – estates that priced their wines attractively – a repetition of last year hasn’t been forthcoming.
Elsewhere in June, there has been greater market focus on the 2003’s ahead of Parker’s annual 10 year Bordeaux retrospective that will see him re-score a lot of the top wines. This lead us to focus on Montrose 03 which is currently scored 97+, but has been scored 100 pts unofficially by Parker twice and 99 pts once, in his publication the ‘hedonists gazette’ over the past 5 years. This has lead us to believe it could be in line for an upgrade next month and if scored the ‘magical’ 100 – it will place it on the same level as the 2009 (£2,450) and 1990 (£5,250). Other top 2003’s worth looking out for are Pavie (98+), Leoville Barton (95+), Mouton (95 +), Petrus (95 +), Pichon Baron (94+) which were all scored with a plus point indicate they could be due an upgrade. Outside of these, perennial favourite Pontet Canet which Parker described as ‘One of the great successes of the vintage and certainly one of the most profound Pontet-Canets made over the last decade is the 2003’ could score favourably and following the Saint Emilion re-classification Angelus 03 could be one to watch.
Auction results over the month continue to point at increasing demand and interest from buyers for the premium vintages of mature first growth. Rare Burgundy has been leading the way in auction results over the past 24 months and continues to do well, but rare Bordeaux has seen renewed demand in 2013. Petrus, Lafite and Latour from the historic 1982 vintage have sold consistently over-estimate as have iconic vintages for Mouton (1986) and Haut Brion (1989).
Heading into the second half of 2013, again we find the wine market in an interesting position where it’s quite difficult to predict precisely where it will be headed. There are both positives and negatives to consider that would leave most bulls and bears sitting on the proverbial fence.
For the bulls, positive growth of 5% Year to date, with increased trade and a resilient market in the face of a potential sell-off following the 2012 campaign show that the wine market is in good health, and any short term softening represent good buy opportunities.
For the bears, the uncertainty of a China/EU trade dispute that could impact wine imports, as well as a lacklustre 2012 campaign and a potential stock-sell off looming suggest prices will soften.
As always though, with wine being a mid-long term investment, any potential short term volatility should be considered within this context and with positive data recently being published for fellow alternatives art and classic cars, as well as a growing number of millionaires in the Far East, one could expect this to be replicated in wine over a longer term horizon.