With en primeur 2012 fast approaching and the first quarter of the year drawing to a close we took time out to speak with Aarash Ghatineh, our UK Sales Manager, to understand his thoughts on the start of the year for the fine wine market, and what he expects for the rest of 2013. As UK Sales Manager his day-to-day role involves liaising with all new and existing clients as well as overseeing our entire sales team, formulating existing and on-going investment strategies.
2012 was a tumultuous year for all investment markets, including fine wine, what were your thoughts on the year and were there any positives to take out of 2012?
A.G: 2012 saw more worries with continued fears about Europe, U.S. double dip concerns & weaker growth in the emerging markets. These tough economic conditions coupled with faltering prices for investment grade wines & a dismal Bordeaux en primeur campaign contributed to what was a testing year for the Fine Wine Market. Withstanding the turbulent market conditions, there are some great highlights & positives to take out the year’s trading. The Bordeaux 2009 vintage fared extremely well upon Parker’s in bottle assessment awarding 19 estates the coveted 100pts, leading to strong price development. Foretelling Parker’s scores can be a risky business but our stock selections from the 2009 vintage saw an average increase of over 50%. Exciting developments for the Right Bank at the end of last year, with Angelus & Pavie which were promoted in the recent St. Emilion Classification and are now trading at all-time highs. The market correction for Top end Bordeaux meant that buyer’s appetites widened with an increase in demand for Burgundy, Super-Tuscans & Champagne, and I expect this interest in other regions to continue in 2013.
People are predicting a positive year for the wine market in 2013, would you go along with this?
A.G: 2013 has started very positively & the general global demand for Fine Wine is at a high point, which suggests that we are in line for a market resurgence this year. In the past, prices reached ‘bubble’ territory for certain wines & the aftermath of that bubble bursting has undoubtedly been tough. However, the market correction represents a good buying opportunity and it seems that confidence is returning to the market.
What trends would you expect to shape the wine market this year?
A.G: I think a lot of buyers have learnt their lessons over the past 18-24 months and the days of sustained blanket buying are behind us. I think we will witness a return to a genuine focus on quality and value, with a much more selective market. I think our customers will continue to diversify their portfolios, paying particular attention to Rhone and Super-Tuscans. The regions that have been relatively untouched by new markets offer a strong investment opportunity.
And subsequently where do you think there are investment opportunities?
A.G: The Bordeaux First Growth market has come down significantly in price so I think there are some strong buying opportunities for well scored vintages. The Bordeaux 2010 in-bottle scores have been released & whilst certain wines were released slightly high En Primeur, we feel there is some great value to be had in the top scored wines such as Pape Clément 2010, the best value 100-point wine currently available at £1,500 per case of 12. There is no doubt that the market focus will be firmly directed at the 2009/2010 vintages which represent the pinnacle of Bordeaux wine making. The recent acknowledgement from Parker of Northern Rhone’s achievements in the last three vintages will undoubtedly stimulate interest in the region’s top producers such as Guigal & Chapoutier. Production for these specialist wines are extremely limited, and they often become very scarce within a few years of release. With the market continuing to broaden further, Champagne is a worthy portfolio addition, it is quite a safe option, as it is a region also untouched by the Far Eastern market, and could be in line for a substantial price increase in the coming years.
Following the disappointing EP2011 campaign, how important do you think EP2012 will be to the on-going recovery of the market?
A.G: I will defer opinion on the vintage until the rest of the team and I taste the wines in April. It is clear that the market is in recovery mode and a lot healthier in terms of demand, but of course the EP2012 campaign is a key cog in this wheel. In terms of pricing, you would like to think that the prices will have to come down on the last three years to really excite buyers but I feel that the price of 2012 will be similar to the 2011s. Historically, en primeur returns have been at their greatest in off-prime vintages so if pricing & timing is right then it could provide a boost to the on-going market recovery. Equally, if prices are too high this will have a negative impact on the market.
Having advised private clients in the market for the past 5 years, what would be your best piece of advice?
A.G: This is a cyclical market, do not take a snapshot view or expect to make a quick buck, take a medium to long term outlook.
What is your desert island wine?
A.G: Ch. d’Yquem 1988
What would you eat with it?
A.G: If there doesn’t happen to be a big slab of blue cheese knocking about, it would have to go with a freshly caught Salmon.