|Jon Barr of EFWines gives his wine investment tips for 2013|
|Written by Richard Siddle|
|Thursday, 17 January 2013 11:15|
A major trend that will continue in 2013 is the recognition of the investment potential of regions other than red Bordeaux. This is to be expected as new markets, especially in Asia, become more aware of the wider range of top quality wines.
This increased confidence means that there will be less reliance on buying the ‘label'. In recent years Chinese buyers in particular were steadfast in their view that they couldn't go wrong buying the best vintages of Lafite.
Burgundy has long been in this category, but is fiendishly difficult to obtain, and is joined by Rhone and the ‘Super Tuscans'. We also add in the top Champagne producers in the interests of a diverse collection.
Compared with Bordeaux wines, the Super Tuscans represent good value and have a proven potential for growth. There is an increasing international recognition and appreciation of this fact, particularly in Asia. According to Liv-ex, the Super Tuscan 50 Index has outperformed the Liv-ex 50 since June 2007, offering a five-year return of 76% (compared to 26% for Liv-ex Wine 50).
Reinforcing this point was the results of a Sotheby's auction at end of last year, where we saw top Rhone vintages and white Bordeaux attract keen interest from buyers in Hong Kong.
Prices were 20% above the pre-sale estimate and with the total spend coming in at US$3.8m, it's proof there's still a strong demand for fine wines - regardless of whether buyers have switched focus from Bordeaux first growths and moved to other regions and the top white Bordeaux.
For example, Haut Brion blanc 2006 vintage - an ‘off' vintage - went for 144% over the pre-sale estimate price.
We see this trend developing additional momentum in the New Year, with buyers keeping their focus on ‘off' vintages to get value for money and looking to invest in other regions. Even Lafite has seen rise in price on ‘off' vintages in the past couple of months on their 2002 and 2004 vintages, with Liv-ex recording price rises of 5.7% and 3.8% respectively in November.
What challenges does the wine market face in 2013?
At the risk of stating the obvious, the market for the best Bordeaux vintages struggled in 2012. However, one clear and encouraging trend has been the ever-increasing popularity of the 2009s - famously described by Robert Parker as a "vintage of a lifetime".
This year Pontet Canet 2009 has been the best selling Bordeaux at EFWines. It goes to show that investors are still interested and will keep buying fine wines if they feel they are priced correctly. Most buyers have turned their back and walked away from the 2010 and 2011 vintages for the simple reason that they believe they're over-priced.
Looking forward, the single biggest challenge the industry faces will be the Bordeaux 2012 campaign. While it's encouraging to hear positive noises from Bordeaux about the quality of the harvest, we have no indication yet of whether the chateaux have learnt the pricing lesson of 2011.
Ultimately quality will always be the key determining factor, which is why the release of Robert Parker's scores in the spring is still so influential. All things considered, it's imperative the chateaux come in with a more realistic valuation of En Primeur as a perception of good value is essential to stimulate demand.
A couple of investment tips:
Pontet-Canet 2010 - in our opinion, even better than the historic 2009 vintage which scored the perfect 100 points. We expect a similar score for this vintage, which is more in the classic Bordeaux style.
Latour 1996 - this is a wine that has suffered from wine price inflation, but now represents a great buying opportunity for a wine that should be laid down for another three to five years.
Wines to keep your eye on in 2013:
Opportunities for investment potential wines in other regions would be Sassicaia for the Super Tuscans, Tassinger Comtes de Champagne, and as for Rhone any of Guigals wonderful La La'a - La Mouline, La Landonne and La Turque. For Burgundy we have seen most interest in Comte de Vogue's Musigny.
* Jon Barr is director of wine merchants and specialists in fine wine, EFWines.