Rising prices for wine investors

Perhaps the most important question to ask besides when should you drink a wine is when should you buy it. The system of buying Bordeaux wines en primeur (before they have been bottled and cellar-aged) used to serve château owners and wine merchants equally well. The owners didn’t have to keep their stock waiting to accrue value; while the merchants bought wines that could be sold for more at a later date. Though, recently, there has been much disquiet about the opening prices for grand cru Bordeaux wines, for they are some of the most sought after on the international market and the Bordelais know it. No longer are they prepared to let merchants profit from the high prices these wines command after a few years in the cellar. Merchants are unhappy, however, at the eye-watering opening prices of the best château wines—they are, after all, taking a risk. Buyers and wine critics have to taste these wines in barrel and predict whether the fruit, alcohol and acid will all coalesce into a balanced and elegant wine in eight to 15 years.

It was by making such a judgement call on the 1982 vintage that Robert Parker made his name. This was a time when many in the futures market were prepared to bet on the price of any desirable commodity, including wine. City traders didn’t have the expertise to judge fine wines, nor were they fluent in the vocabulary of wine connoisseurs, but they were good with numbers and Parker’s 100-point scale simplified the transactions. He proclaimed, over traditional voices, that 1982 would be one of the best vintages of the century in Bordeaux. A few years later people came round to his view.

Trouble arose when Parker’s pronouncements were seen as moving the markets and so securing the fate of various wines and château owners. Some Bordelais even started to make their wines in the style Parker favoured in order to attract more points. These days the tide is turning and a return to traditional Bordeaux styles is pervasive, but the points-driven assessments survive and the opening prices remain stubbornly high.

An interesting consequence is that wine investors who manage income-generating portfolios for their clients now wait until there is agreement on which wines are highly valued, the bet being that such wines, cellared not drunk, will continue to increase in value. That is a sign of how risk-averse investors are these days.

Merchants have now extended the en primeur system to wines from the Rhône Valley and from Burgundy, inviting prospective customers to try the young wines for themselves. It is much easier to taste and appreciate wines from the Northern Rhône and Burgundy in their youth, and knowledge- able drinkers invited to such events are clearly willing to make purchases—absorbing some of the risk and relieving the wine merchant from having to sit too long on their valuable stock.

These tastings also provide many more people with a chance to sample wines that they might never have another opportunity to taste. The wines will be cygnets not swans, but tasters have the chance to inhale the aromas of a Bâtard-Montrachet, or feel the velvet mouthfeel of a young Chambertin. Such encounters can be as exhilarating as when tasting the new releases of wines from Domaine de la Romanée-Conti. Once a year, a select few—mainly critics and wine buyers—gather at the headquarters of Corney & Barrow to taste the grand cru Burgundies that express the terroirs of Vosne Romanée. The 2013s were spectacular, earthy and ethereal; pale reddish pink. La Romanée-Conti, so pale; light-footed with a long and developing finish. In its middle age, this glorious wine will be available to the super-rich alone. Let’s hope they drink it, rather than invest in it. I’m grateful to have been acquainted with it in its youth.