Dec. Fine Wine News round-up

David King – 21st December 2017

Firstly, may I wish all our readers a Merry Christmas and a Happy, Healthy and Prosperous 2018. Thank you for reading my (hopefully relevant) musings on the fine wine market and I hope you have found these posts both interesting and informative.

So, as we see out the remainder of 2017, and look forward to a few days of relaxation and perhaps some fine wine drinking, please read on for my last commentary of the year...

The Drinks Business

Laura Eads (14th December 2017) reports on the successful crowdfunding achieved by Chapel Down. £18.5m has been raised to expand their own vineyard footprint by 500 acres and also to support the Curious Brew beer business. Frazer Thompson (CEO – Chapel Down) says “This marks the opening of a new chapter of growth for Chapel Down. With an outstanding team and world class products, we will look to fully capitalise on our position as the UK’s most exciting drinks company.”

Natalie Wang (4th December 2017) writes about the increase of Australian wines imported into China. For the first-time Aussie wines have surpassed French wines by value in October, although France still leads the overall imports league for the year to date. The figures are startling. 8.42 million litres of Australian wines were shipped in October with a value of US$69.6 million (US$6.20 / 75cl bottle). French wines amounted to 12.89 million litres and US$63.76 million (US$3.60 / bottle). A new Free Trade Agreement that will see import tax reduced in stages down to zero by the end of 2019 has probably oiled the wheels together with the marketing machinery available to global brands such as Penfolds, Wolfblass and Yellow Tail that are leading the charge. Will a post Brexit Britain and our wine production have the same opportunity in the future?

Natalie also reports (30th November 2017) on how Bordeaux estates are rather wary of new Chinese owners renaming the Chateaux to appeal to their customers in China. Rabbits, antelope and sheep have very positive connotations in Chinese culture and it’s not just the names but also the images on the labels. For example, the 300-year-old Chateau Larteau is now called Chateau Lapin Imperial (Chateau Imperial Rabbit) by owner Chi Tong, the owner of World Harvest Far East. The symbol of a white walled mansion has been replaced with a fluffy bunny rabbit! I don’t think this will catch on though and I hope that the European market is shown some respect by retaining names and labels. We shall see. There are over 8,000 chateau I the Bordeaux region and the Chinese only own around 160 of them.

Lucy Shaw (28th November 2017) focuses on the appointment of Lisa Perrotti-Brown as the replacement for Neal Martin as the Bordeaux reviewer for The Wine Advocate. Lisa is also the editor in chief for this esteemed publication and is a highly respected assessor of fine wines. As a former colleague of mine (at Corney & Barrow) many moons ago, I know this high-profile role is in very safe hands.

Decanter Magazine

Chris Mercer (1st December 2017) – Robots may soon have a bigger role in some of the world’s most prestigious vineyards, after successful trials in Bordeaux and Portugal. This includes Chateau Clerc-Milon, owned by Baron Philippe de Rothschild. If you told me this 20 years ago I would say to you, keep this story for April 1st!! Apparently, one of them is called TED and is a dab hand at weeding. We are assured these contraptions will not replace the human hand. Symington’s in Portugal have trialled ‘vine scout’ which monitors vine health and alerts winemakers to signs of water stress. It uses GPS to operate autonomously among the vines. Drones are already quite a common sight for all areas of agriculture.

Jane Anson writes at length about the Bordeaux 2017 vintage. She has tasted vat samples and as you may imagine this is a lengthy piece so let’s boil it down to very general terms. Late frost, second flowering leads to reduced yields and quality. Warm dry summer helped ripen white grapes for an August harvest. Rain early in September didn’t affect the ripening process and harvest of red grapes.

Alcohol levels: Sauvignon Blanc 13%; Semillon 12%; Merlot 12.7%, Cabernet Sauvignon 12.5%.

Yields for the region are approximately 50% lower than 2016 for vineyards in close proximity to the Garonne river, including many of the classified estates in St. Julien, Pauillac, St Estephe and pockets of Margaux. On the right bank the areas of Bourg, parts of Cadillac Cotes de Bordeaux and Entre deux Mers were only moderately affected. Some parts of Pomerol and St. Emillion escaped the worst of the frosts.

Jane says there are some excellent wines: “Expect plenty of freshness and drinkability from wines that will offer excellent value, the others that will rival 2016 in terms of ripeness and ageability, but they are likely to be the exception, not the rule.” The tricky task for the trade is selecting the right wines for their customers.

Panos Kakaviatos (28th November 2017) talks about the cautious reception of the new regional appellation ‘Bourgogne Cote d’Or’. This is in reality the 14th regional Burgundy AOC, but at the top of the regional AOC pyramid and just beneath ‘village’ level.

What’s the difference? For a start the concentration of vines per hectare is 9,000 plants as opposed to 5,000 for other Bourgogne regional appellations. Grapes from younger vines can be permitted for use which would not be normally allowed for village level wines. Merchants attending the annual Hospice de Beaune auction from beyond the Burgundy region seemed intrigued but cautious. The concern is that it may confuse the market. Is this representing a more affordable Burgundy to the market? Is this simply a declassified ‘village’ wine? How will the drinking public understand this from the label and where it’s place in the market exists for them (value or premium early drinking?). BIVB will be planning press tours in France for the new wine in the autumn of 2018 with media events outside of France in 2019.

Winesearcher News

W. Blake Gray (5th December 2017). An unusual inclusion for winesearcher.com but an interesting item for our friends in the States. You may not be aware, but each state is enabled to manage the distribution and tax on alcohol. Awkward for wine enthusiasts to buy from a store in a different state and ship it across the border. Licenses and US legal authorities come in to play at this point, however a legal challenge to the shipping laws will be put to the Supreme Court. Don’t expect a quick fix though – it may take 5 or 6 years!

Cellar Watch - Critical Corner

More on the market from Cellar Watch below, but some newsworthy stuff has emerged because of Jane Anson revealing bottle scores for classified wines from the 2015 vintage.

Top scoring for the first growths was Margaux with a perfect 100 points, saying it: “stood out as a potential wine of the vintage during En Primeur and it is more than living up to its promise.” Mouton Rothschild scored an impressive 98 points: “full of value and sexiness but just short of swagger.” Anson warns that the best wines are from chateaux able to throw money and therefore manpower to overcome challenging situations, so it is worth paying close attention to what you are going to get in the bottle. You can be sure they will be asking for more money from their wares. Other scores include…

Cellar Watch

This is my last chance to comment on CW’s market reports this year (excluding December of course, which will be come January).

November has been the joint busiest month ever for Liv-ex. Records for number of trades and number of participating members have been exceeded. The reason cited was the stability of Sterling and buying ahead for expected demand for the forthcoming Chinese New Year celebrations. Not currency movement apparently.

First Growths' market share remains stable (21% by value), whilst Bordeaux’s performance continues its slump. These figures are a bit skewed by the meteoric rise in demand for Margaux 2015 and the knock-on effect towards high-scoring back vintages (Margaux 1996). Younger vintages are getting more attention.

The devaluation of sterling in 2016 has helped stabilise some prices for 2010 Bordeaux wines. This November saw signs of market demand for some wines, hinting at possible growth in the future. Latour’s 2010 price in the market is now level with its En Primeur release price! Asian favourites Beychevelle and Pavillon Rouge are also showing signs of advancement.

The Indices: Interest in Burgundy’s top producers continue to intensify with nearly 16% of trade by value. Champagne too saw (perhaps seasonal) advances with 7%. Generally speaking all major indices rose in November. Both of Liv-ex’s white wine sub-indices fell. Sauternes 50 by -0.5% and Champagne 150 by -0.7%.

 Liv-ex indices based upon end of November data...