Fine Wine Market Update

The past few months have breathed a bit of life back into the fine wine market. This exhibits a contrast to a fall characterized by predominantly stagnant prices. However, relative to the financial markets, the wine market has exhibited a more moderate resurgence. The overall impression is that consumers are still spending trepidatiously when it comes to their wine cellars.

More buyers are dipping their toes into Bordeaux again. Pristine examples of drinkable wines from maturing vintages such as 1982, 1985, 1989 and 1990 are all doing quite well these days. The 2010 Futures saw a significant uptick after strong reviews from Robert Parker. It remains to be seen how the prices will hold up once they are released and traders begin to flip them. We expect a dip due to too much supply, where there will likely be some buying opportunities in the secondary market.

Burgundy has enjoyed a strong season thanks in large part to several auctions: the Zachys La Paulee sale, the Hart Davis Hart Celebration of Burgundy sale and an Acker Merrall & Condit Hong Kong sale featuring wines direct from Domaine Dujac and Domaine Roulot. Prices for the top items at these auctions were well above average, at times even double the standard rate. The Sothebys sale of wines direct from the cellar of the now defunct El Bulli restaurant also saw prices soar. These sales reinforce the power of pristine provenance combined with strong marketing.

Due to the recent glut of auctions, the less highly touted sales have offered excellent buying opportunities. For example, we recently bought some magnums of 2007 Chambolle Musigny Amoureuses Domaine Georges Roumier for $1200 each – an incredibly rare wine in that format and a great deal considering a pair of single bottles typically sell for considerably more. We also took advantage of some 1974 Barolo Monfortino Giacomo Conterno in very nice condition. As always, it pays to pay attention!

Bordeaux has just begun to release prices for its 2012 vintage and many are immediately down more than
30% from the 2011’s. It is nice to see the Bordelais starting to pay more attention to the overall market
and what it can handle. Due to very small recent crops, Burgundy prices unfortunately won’t see much of a
drop, if any.

Two trials involving fraudulent wine continue to make headlines: those against Rudy Kurniawan and Eric Greenberg. The latter was just found guilty and ordered to pay Bill Koch $12 million in damages – well above the value of wine involved and legal fees combined. The severity of this verdict shows just how seriously counterfeit wine issues are now being viewed. In the long run, these ongoing developments should help to further clean up the market. The cases at hand will continue to be very interesting to monitor in the upcoming months.

We look forward to following the continued development of the fine wine markets and offering our professional insights.

Kind Regards,

David Beckwith, Robert Bohr and Ned Benedict

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