Jancis Robinson on videoHow will the 2010 Bordeauxcampaign pan out?The FT’s winewriter (pictured)talks toClaer Barrett

www.ft.com/wine2011

WINEBuying and Investing inFINANCIAL TIMES SPECIAL REPORT | Saturday June 18 2011

Inside this issueFine wineauctionsHong Kongconfirms itsplace at thetop of thepodiumPage 2

Funds New ways to tapinto fast­growing asset classPage 3

Opinion Don’t put all youreggs in one basket Page 3

En primeur Future islooking tense for 2010vintage Page 4

Bordeaux profilesRenewal at Haut­Bailly;Martin Krajewski at Châteaude Sours Page 4

Burgundy Books for thetrue enthusiast Page 5

ArgentinaThe wildcharms ofMendozaare idealfor vinesand visitorsPage 5

Undiscovered AustraliaFive regions to look out forover the next few yearsPage 5

Natural wines The grape,whole grape and nothingbut the grape Page 6

Starting a collectionQuestions to ask before youthink of laying down abottle Page 6

More on FT.com

Websitesare a usefulalternativeto checkingretailstockists forfine winesbut howgood are they?

Hiccups inmarket asChinesebring cheer

The past two years haveprovided some veryhappy returns to wineinvestors as prices have

soared to record levels, largelyon the back of unrelentingdemand from Asia in generaland China in particular.

In 2010, the Liv-ex Fine Wine100 Index surged by an intoxi-cating 40 per cent, closing at336, having started the year at239. The performance of theLiv-ex Fine Wine 50 Index (madeup of first-growth Bordeaux)was even better in 2010, rising57 per cent and thereby beatinggold, oil and equities.

Equally, the wine auctionmarket has been on a roll withsome astonishing totals and per-centages over the same period,most notably in Hong Kong, butalso in the US and UK. Accord-ing to the Chicago-based HartDavis Hart, its HDH AuctionIndex is up 39.97 per cent overthe past 18 months.

“Prices are now flirting withthe all-time highs of September

2008, reached just before thefinancial crisis,” says Ben Nel-son, HDH’s president.

Similarly, UK merchants suchas Farr Vintners, Berry Bros &Rudd, Bordeaux Index andFine+Rare all reported recordgrowth and sales, partly on theback of a bonanza 2009 Bor-deaux futures campaign.

However, as the Chinese NewYear came and went, there wereconcerns as to whether it waspossible or even desirable tomaintain such meteoric growth.A number of investment profes-sionals were quietly hoping thatthe market indeed would pausefor breath.

At first, there were no suchsigns as 2011 saw yet moregains, with the Liv-ex Fine Wine100 Index putting on another 7per cent in the first quarter. Butjust as prices were starting tolook frothy, particularly forLafite, April produced somemuch-needed respite.

According to Will Beck, fundmanager at Wine Asset Manag-ers, “the market then began toslow for several reasons, includ-ing the Japanese tsunami, politi-cal unrest in the Middle East,global economic uncertainty –and the best part of two years’unchecked growth in fine wineprices”.

Significantly, most believe thecurrent sideways movement ismerely temporary before themarket resumes its onwards andupwards trajectory. This isthanks to Asian demand, prima-rily for top red Bordeaux, butalso a growing thirst for grandcru Burgundy.

Similarly, few people doubtthat China will remain the driv-ing and dominant force over thecoming 12 months and beyond.Last year, the Hurun “rich list”,which tracks the fortunes of thecountry’s wealthiest tycoons,showed a 36 per cent increase inthe number of Chinese billion-aires, with the average wealth

of those listed rising by a stag-gering 64 per cent in the pasttwo years.

In comparison with Asia, tra-ditional fine wine markets arepositively anaemic. In particu-lar, Europe and the US remainin a pickle with economic recov-ery looking slow and patchy.

“We’re unlikely to see thereturn of serious wine buyers inthe UK, Europe or the US anytime soon,” says Andrew Davi-son of the Vintage Wine Fund.“Consequently, the demand pro-file will continue to look veryChinese.”

Not everyone is quite sodownbeat. Laurent Ehrmann of

the Bordeaux négociants Bar-rière Frères suggests that “theAmerican market is definitelycoming back more than lastyear”. Beck also believes it isonly a matter of time before theAmericans return.

But much depends on thestrength of the dollar, which hasweakened against the euro.According to Judy Beardsall,the New York fine wine consult-ant: “I don’t see much appetitefrom US collectors for the mar-ket in general or the current enprimeur campaign.”

Meanwhile, the ground stillcontinues to shift in the ultra-fine wine market. In particular,

it appears that the pre-eminentreign of the alpha asset that isChâteau Lafite may be over – atleast for the time being.

Earlier this year, the Londonmerchants Bordeaux Indexrecorded a 30 per cent fall inLafite unit sales compared with2010. “It seems unlikely thatLafite will drive future priceappreciation any time soon,”says Bordeaux Index’s GeraintCarter. Instead, the increasinglyfashionable Mouton and Haut-Brion are now showing the mostgrowth of all the premiers crusin 2011.

Prices have risenunchecked for twoyears but can suchgrowth be sustainable,asks John Stimpfig

Liv-exFine Wine100 index

Source: Liv-ex.comPhoto: Dreamstime

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www.ft.com/wine­investment­2011 | twitter.com/ftreports

2 ★ FINANCIAL TIMES SATURDAY JUNE 18 2011

Buying & Investing in Wine

ContributorsJohn StimpfigFT Contributing Editor

Ella ListerAuctions & SecondaryMarkets Correspondent,The World of Fine Wine

Stephen Brook,Andrew Jefford,Margaret Rand,Maggie Rosen,FT Contributors

Andrew BaxterEditorial Production

Nick SmithSub­Editor

Steven BirdDesigner

Andy MearsPicture Editor

For advertising details, contact:Mark C Howarth,mark.c.howarth@ft.com+44 (0)207 873 4885or your usual Financial Timesrepresentative

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Hong Kong confirms itsplace at top of the podium

Hong Kong has thisyear underlined itsrapid rise to the topof the global heap in

fine wine auctions by capturingmore than half of global reve-nues for the first time.

In the five months to the endof May, its wine auctionsbrought in US$123.5m. Add avery small contribution fromSingapore, and Asia represents55 per cent of the global total.European auctions totalled$30m, and the US more thandouble that.

Hong Kong generated reve-nues of $160m last year, equal to40 per cent of the global total,not only eclipsing New York’s23 per cent, but also the US as awhole (36 per cent).

The Asian city’s rise to thetop took less than two years fol-lowing the government’s adroitdecision to abolish duty on winein February 2008. This catalystenabled Hong Kong to become aportal to mainland China,whose fast-growing wealthy pop-ulation has quickly developedan unquenchable thirst for thebest that Bordeaux has to offer.

Very few houses have resistedHong Kong’s siren calls. The topfour – Sotheby’s, Acker Merrall& Condit, Zachys and Christie’s– derive 60-71 per cent of theirrevenues from the city.

With the surge in demandfrom Asian investors, revenuesper auction are also muchhigher. The 21 sales apiece inEurope and the US brought inaverage revenue of $1.4m and$3.2m, respectively, comparedwith the average of $8.3m fromAsia’s 15 events. In Hong Kong,the average sale spans two daysand brings in $8.8m. Althoughthe number of lots per sale isnot significantly greater thanelsewhere, each lot is worthabout $9,000.

Historically, Hong Kong’shigh-value lots have sold con-sistently well, with a weighted-average sell-through rate of 97per cent in 2010. Sotheby’s canboast an unbroken string of so-called white-glove sales (100 percent sold) in the city from Octo-ber 2009.

This year, though, HongKong’s overall sell-through rateis down by 1 percentage point.Christie’s faltered at the begin-ning of March with a two-daysale selling only 86 per cent oflots. Alone, this would class as aminor hiccup, but on April 9and 10 the auction houserecorded a sell-through rate of69 per cent – the lowest in HongKong since Bonhams’ equallydismal result in May 2010.

The poor sales were variouslyascribed to overambitious pric-ing discouraging bidders, andthe coincidental absence ofsome of Christie’s best local cus-tomers. “We were selling at esti-mates that were at the top ofthe market for wines that areindisputably great but not par-ticularly rare,” reasons CharlesCurtis, head of wine at Chris-tie’s Asia.

Christie’s came back trium-phantly on May 27, selling 100per cent of lots hailing directlyfrom Château Latour. Curtis putthe success down to “greatwines, exceptional provenance,and once-in-a-lifetime rarity”.

Despite Christie’s recovery, theAsian market has shown itselfnot to be untouchable. Its refusalto pay over the odds for winewithout a remarkable historyputs provenance higher up onthe agenda than ever. Earlierthis month, some shipwrecked1840s Veuve Clicquot set arecord for a bottle of champagne.The champagne – certainly rare,and apparently well preservedon the cold, dark seabed – waspurchased for $43,630 by ananonymous Asian online bidder.

Overall, the global wine auc-tion market almost doubled lastyear, to $396m. In the first fivemonths of 2011, global salesreached $225m, up 66 per cent

on the same period last year.Sales have increased both innumber (by one-quarter to 58)and by average turnover (byone-third from $2.9m to $3.9m).

Traditional markets have alsobeen strong, with Europe andthe US growing overall revenuesby 158 and 150 per cent, respec-tively, so far this year. The UShas hosted several more salesyear on year, thanks in part tothe advent of new players.

After Spectrum Group Inter-national’s success with Spec-trum Wine Auctions, launchedin 2009, other auctioneers havemade the horizontal move intowine. One is Greg Martin Auc-tions, the arms and armour spe-cialist. Formerly a SpectrumGroup subsidiary, the auctionhouse returned to private own-ership this year and plans tohold its first wine sale thismonth, under the banner MartinWine Auctions.

Heritage Auctions, the collect-ables house, held its inauguralwine sale in April in BeverlyHills, California. It has differen-tiated itself by publishingreserve prices in the catalogueand revealing absentee bid lev-els during the auction. Thesetransparent practices “wereexceptionally well received”,according to Frank Martell,director.

He noted, however, that “ourtop buyer participated using our[online] live bidding tool”,which highlights the other bigtheme of the past two years tomatch Hong Kong’s rise – theexponential growth in the vir-tual side to wine auctions.Houses such as WineGavel offeronline-only auctions alongsidetheir live events, or, in the caseof Winebid.com, as the primarybusiness model.

Sotheby’s launched online bid-ding at its live auctions in June2009 with 90 registered bidders,and now has 785. Since January2010, 39 per cent of lots havereceived online bids in NewYork, 46 per cent in London and48 per cent in Hong Kong.

Of the three selling centres,Hong Kong has the lowest per-centage of lots sold via the

internet, at only 10 per cent,compared with 15 per cent inNew York and 22 per cent inLondon. Many buyers in west-ern auctions participate onlinefrom Asia, pushing up the pro-portion of remotely won bids.

A presence on the ground isthus crucial if new houses are toaccess the full extent of Asiandemand. Hence the originalSpectrum model of holding livesimulcasts in Hong Kong, subse-

quently adopted by newcomersHeritage and Martin Wine.

“Purchases from Hong Kongand the Asian countries are nowthe majority of the winning bidsin our live auctions,” says JasonBoland, Spectrum Wine Auctionspresident. The company plans tohost the majority of future salesin Asia, abandoning the US legapart from small VIP dinnerswith live streaming.●As with the shipwrecked

champagne, the rarity factor alsopaid off at Ornellaia’s Vendem-mia d’Artista charity auction inBerlin on May 19. Large-formatbottles bearing original artworkby Rebecca Horn fetched up to30 times more than the goingrate for the Ornellaia 2008 insidethe bottles. The auctioneerChristiane zu Rantzau, chairmanof Christie’s Germany, said ofthe bottles: “I’m sure they’re agood investment.”

Fine wine auctionsCity captures half ofglobal revenues asBordeaux fever grows,writes Ella Lister

The east is red: poster advertising a Sotheby’s auction preview in Hong Kong AFP/Getty

‘Purchases fromHong Kong and Asiaare now the majorityof the winning bids inour live auctions’

FINANCIAL TIMES SATURDAY JUNE 18 2011 ★ 3

Buying & Investing in Wine

Look beyondfirst growths

Among the many rules ofprudent investmentstrategy, one of the mostobvious is not to put allyour eggs in one basket.Statistics show occasionalmeteoric rises in the priceof premier cru (first-growth) wines, but some ofthe most consistentperformers are to be foundin a broader group.

During the past 30 yearsof being involved in thewine industry, it hasbecome evident to me thatone factor which regularlycaused wine prices tochange was limited supplyagainst a backdrop ofsustained demand. In abiography of ThomasJefferson (by JohnHailman), a telling quotefrom M. Parent inBurgundy, defending theprice of a cask ofMeursault in a letter datedDecember 4 1787, states:“In the past two monthsprices on old wines haverisen greatly in our area.”

Despite evidence to thecontrary from the Jeffersonstory and more recentexamples, some objectorsto the notion of wine as anasset class still suggestthat what is happening toprices today is new. There

is a thread of truth in thisbecause brand influence isbecoming more polarisedand less predictable thanbefore.

By illustration, armedwith an arbitrary £3,700($6,025), would we choose12 bottles of a humbleBordeaux “second wine”,Carruades de Lafite 2005,or about 20 bottles of a“first wine”, ChâteauLéoville Las Cases 2000,2ème Grand Cru Classé, StJulien?

Logic would steer mymoney to the Las Casesbut other forces are atwork and immaturemarkets react to thoseforces unpredictably, soCarruades rises in valuejust because it is related toChâteau Lafite. Wecongratulate those whohave made money onsecond wines but suggestthat it was anything butan obvious outcome.

In the meantime, as wellas first growths, wecontinue to steer clientstowards second, third,fourth and fifth growthswhich represent old money

and, in a consistent way,rise in value as the bestwines of the best vintagesbecome scarce. Second-growth wines such asLéoville Las Cases, PichonLalande and LéovilleBarton are bankers in thisfield and yet even theystruggle to match theconsistently predictableand positive performancesof the fifth growth, LynchBages.

There are many moremembers of this clique,such as Ducru-Beaucaillou,Mission Haut-Brion andMontrose, but there arealso a few returning to thehigh-performance arena,such as Pontet-Canet andPichon Longueville.

The Pichon was broughtup from a deep depressionby wealthy new owners,while Pontet-Canetemerged as a result of anextraordinary family effortto maximise the land andthe fruit’s capabilities.

First growths symbolisea “money no object”approach to showing offand quenching thirst, andsince the world is fillingup with wealthyindividuals I believe wehave seen nothing yet ofthe heights to which thesewines may rise in price.

As for value, that isanother question. The winetrade loves the insiderelement so that, as theRolls-Royce pulls awayfrom the St James wineshop with six bottles ofsomething reassuringlyexpensive, the wine expertjumps into the Audi withsix bottles of somethingnearly as delicious at afraction of the price.

But if investment is onlyabout being boring,following consistentperformers and being riskaverse, then werecommend first growthsfor the long term – but beaware of the manyplateaus along the way.

For a more consistentpath with steady growth,we suggest a generoushelping of second to fifthgrowths with a carefullyconsidered pinch ofBordeaux right-bank wines.

In summary, many winescosting £200 today will be£400 in five years’ time.But if they cost £3,000today, will someone bepaying £6,000 at some pointin the future? We remainconvinced that one day£6,000 will be the norm forcertain rarities, but thatconsistent returns will stillbe created from wines thatstart at £200 and sail past£400.

Peter Lunzer is chiefexecutive and chiefinvestment officer ofLunzer Wine Investments

OpinionPETER LUNZER

Peter Lunzersuggests ageneroushelping ofsecond tofifth growths

New ways to tap intofast­growing asset class

Investment wine fundsare a phenomenon ofthe new millennium.There are now more

than a dozen such fundsworldwide; no surprise,given the outstanding per-formance of the asset class.

Prices for the top wines,as tracked by the Liv-exFine Wine 100 Index, haverisen at a compound annualgrowth rate of 15 per centover the past decade.

New funds are springingup this year. BordeauxIndex, the UK wine mer-chant, plans to launch theFirst Growth Wine Fund inOctober. Funds are beingraised now with a minimuminvestment of £75,000($121,090).

Gary Boom, previously apartner in the Vintage WineFund, says this venture willfollow a similar format, asan open-ended vehicleinvesting largely in topBordeaux.

Ingenious Media, anotherLondon outfit, is fundrais-ing for Vindemia, althoughthe deadline has been twicedeferred, now to July 29.

The fund is an EnterpriseInvestment Scheme, provid-ing income tax breaks toUK investors on top of thecapital gains exemptionenjoyed by wine. The “wast-ing asset” rule means wine– with a life of less than 50years – is not classed as aninvestment for the purposesof UK capital gains tax.

Despite its ascendancy inthe world of wine, Chinahas yet to see a wine fund.Elsewhere in Asia, SouthKorea and Singapore havehad wine funds since 2007.Many western funds havean active presence in HongKong, in an effort to tapinto the region’s growingwealth.

At a conservative estimate,wine funds globally areworth a modest£150m-£200m, which repre-sents about 3 per cent oftotal investment-grade stock.

Before the credit crisis,the Vintage Wine Fund hadmore than €100m of assetsunder management, butinstitutional investorspulled out en masse in Sep-tember 2008. “It was a verytouch-and-go situation,”recalls Andrew Davison,portfolio manager, puttingthe setback down to sheersize in a small market.

Private investors “satthrough the storm and havebeen proved right to do so”,he adds. The fund is nowthriving, with assets undermanagement (AUM) ofabout €30m ($43m), up 2 per

cent so far this year and 67per cent since its inceptionin 2003. Nonetheless, Davi-son sees wine investment as“a dalliance for privateinvestors” – the marketlacks capacity for invest-ment by big institutions,which would cause it to“very quickly inflate andbubble”.

Several funds have mettheir demise in recentyears, including Vinum andArch, wound up followingportfolio mispricing andreporting issues, respec-tively. This led to a call forpricing transparency, andthe widespread adoption ofindependent valuation prac-tices using Liv-ex’s “mid-price”.

The first fund, run byAscot Wine Management,folded five years after itslaunch in 2000. The AWMFine Wine Fund had builtup a portfolio containingmany wines peripheral tothe core investment-gradestable, such as mid-rangeRhônes and Burgundies.

It is widely acceptedtoday that the most reliablereturns are to be had from asmall proportion of Bor-deaux classed growths, thevery same wines purchasedby the British upper classesover the past century. Davi-son expounds the wisdom ofsticking largely to Bor-deaux, “which trades dayin, day out”.

Miles Davis and WillBeck, ex-City of Londonfounders of Wine AssetManagers, have one holdingin Champagne, with therest in red Bordeaux, and 90per cent in eight wines.

They manage two funds,the first launched inAugust 2006 as an open-ended vehicle aimed at indi-vidual investors. The FineWine Fund is up 75 per centsince then (3 per cent thisyear), riding out the globalfinancial crisis relativelyunscathed, despite a declineof 17 per cent during 2008.

The closed-end WineInvestment Fund, run byAnpero Capital, held even

firmer during the periodthanks to its no-redemptionpolicy, which impeded anyflights of fear. Anpero hasfound a winning combina-tion of factors: high returns,low risk and low correlationto financial markets.

“Wine is a low-risk assetclass, and we are low-riskasset managers,” says

Andrew della Casa, direc-tor, pointing out that winehas a better risk-return pro-file than leading stock indi-ces, and even oil and gold.

Anpero also advises SKNetworks’ wine fund inSouth Korea, Accilent’s inCanada, and Stratton StreetCapital’s Fine Wine GearedGrowth Fund. The latter

launched in March 2008 andsuffered considerably dur-ing the crisis as it was 100per cent geared: it enteredpositive territory only inearly 2011.

In January, the WineInvestment Fundannounced its intention tolaunch an Aim-listed vehi-cle, to enable access by

larger institutions withstrict internal investmentpolicies. There have beenno further developments.

Whether or not the listinggoes ahead, however, itseems inevitable that inter-est in wine as an asset classwill increase, especially ifprices continue theirupward trajectory.

FundsWine’s outstandinginvestmentperformance is abig attraction,writes Ella Lister

Fruitful activity: harvest time at the Château Margaux vineyard in the Bordeaux region Bloomberg News

4 ★ FINANCIAL TIMES SATURDAY JUNE 18 2011

Buying & Investing in Wine | Bordeaux

Future is looking tense in 2010 campaign

By the time you readthis, there is a faintpossibility that the pre-mier cru (first-growth)

Bordeaux will have releasedtheir 2010 en primeur prelimi-nary prices (for those preparedto buy in advance of bottling).But after the slowest and mostdilatory campaign on record,the odds are very much against.

Ironically, it all began sopromisingly with the April tast-ings confirming that Bordeauxhad plucked yet another annusmirabilis from its chapeau in2010. Writing on eRobert-Parker.com, the critic Neal Mar-tin observed: “Whatever deity isup there bestowed Bordeaux

with another embarrassing,once-in-a-lifetime vintage thatfollowed the once-in-a-lifetime2009.”

The get-out clause for Bor-deaux was the contrastingstyles of the two vintages.Simon Davies at Fine+Raredescribed 2010 as 2009’s “non-identical twin”, while JeffreyDavies, the Bordeaux-basedAmerican négociant, defined theage-worthy 2010 as a much moreclassical, “European” vintage,compared with its more voluptu-ous elder sibling.

Which is superior?Take your pick. As Anthony

Barton, Château Léoville Bar-ton’s engaging owner, wittilycommented: “Both vintages arebetter than the other.”

Despite the chorus of praisefor the wines, the subsequentprogress of the campaign hasbeen akin to “pulling teeth”,according to Edward Sheldon,the UK merchant.

Part of the problem with what

is in effect a €1.5bn initial pub-lic offering has been the collec-tive and individual indecisionon the part of the châteaux overprice – what the wines areworth and what the market willpay.

To date, many châteaux haveseen little or no reason to droptheir prices from the dizzyheights of 2009 – arguably withgood reason. As Christian Seely,Axa Millésimes’ managing direc-tor, points out: “It’s quite proba-ble that some châteaux havemade their greatest wines everin 2010, including PichonBaron.” Many critics agree,including Jancis Robinson andRobert Parker. The latter cameout strongly behind the vintage,giving potential perfect scoresto 10 properties.

But what about the all-impor-tant punters? “A lot of peoplefilled their boots with 2009because it was such a ‘one-off’,”says Chad Delaney of Justerini& Brooks. “So, I just don’t see

the same enthusiasm for 2010,which is stylistically more akinto 2005 and even more exp-ensive.”

Delaney is not alone in thisview. In a recent Liv-ex survey,59 per cent of international winemerchants expected demand tobe lower than last year. In fact,several UK merchants reportedthey had received barely 10 per

cent the number of wishlists for2010, compared with 2009.

Yet in spite of such wide-spread fears, the early part ofthe campaign has gone surpris-ingly well in terms of cases sold.Much to the astonishment ofSimon Staples, its fine winesales director, Berry Bros &

Rudd had shifted about 15,000cases by the end of May – moreor less the same as last year.Fine + Rare has also reportedbrisk business, with UK demandby the end of May exceedinglast year’s equivalent figures.

Wines which have gone wellin the UK include Potensac,Petit Bocq, Ormes de Pez,Chasse-Spleen and Cap Gas-queton.

Finally, in June things beganto warm up with the release ofd’Armailhac, Calon Segur andPontet-Canet, all of which soldin short order, despite somehefty price increases. In particu-lar, the must-have, much fan-cied Pontet-Canet was up 39 percent but still sold out in lessthan half an hour.

Now the gloves are off as weawait the impending arrival ofthe heavy-hitting superseconds and premiers crus.

Even so, many in the tradeare wondering where thedemand will come from, as

prices move to a whole newlevel.

“Brits who bought big in 2009are even more inclined to keeptheir hands in their pockets thistime round – especially with theweakness of the pound againstthe euro,” says Gary Boom ofBordeaux Index. “The US is alsoin absentia again – as are themythical Russian and Indianmarkets.”

Experienced investors are alsolikely to give it a miss – notleast, because prices are likelyto be at least as high as the2009s, some of which have nowgone down in value.

“So, there’s very little incen-tive to jump in at this stage,”says Susie de Paolis, a wine con-sultant. Her view is that the2010s will be available in themarket at the same or verysimilar prices in a year or two.

That, of course, leaves Asia,and especially China. Onceagain, Bordeaux will be prayingthat these new and emerging

markets will take up the slack.“There are high hopes that thiswill be the year that mainlandChina becomes a significantplayer,” says Matthieu Chadron-nier, managing director of négo-ciant CVBG Grands Crus.

However, that remains to beseen. Many are predicting thegrand finale of this year’s cam-paign will be much narrowerthan 2009.

“We might see only 10 or 12brands really sell through if theprices are as high as we expect.It that happens, there will beblood on the carpet,”’ saysBoom.

No wonder négociants andmerchants alike are concernedabout ending up with unsoldstock. Having taken a €50mposition on the first growths,Staples is “genuinely worried”about how well they will sell.

It looks like another white-knuckle ride. But at least therewill not be much more waitingbefore we know the result.

En primeurSpeculation grows overdemand and prices,writes John Stimpfig

Some châteauxprobably madetheir best wineever last year,says ChristianSeely of AxaMillésimes

New owner is ‘pulled along by the momentum’How do you make a smallfortune in the winebusiness? Start off with alarge one.

Martin Krajewski,however, would probablynot disagree with thisoldest of wine trade jokes.

He has turned roundChâteau de Sours inBordeaux partly byfinancial acumen andpartly thanks to extremelydeep pockets. These comefrom founding and thenselling Blomfield, arecruitment group.

De Sours was anestablished brand with anenviable reputation for itsrosé when Krajewski tookit over in 2004. He says thehouse was in poorcondition and the estateeffectively bust: it hadbeen kept going “bymoving money round thewhole time”. The previousowner, Esme Johnstone,says it “was viable”, andthat “compared with a lotof vineyards around, it wasin pretty good shape”.

Initially, Krajewski had a

three-year plan to makethe château secure,improve the vineyards andwinery, and sell. “But themoment I got my feetunder the table, everythingchanged.” The three-yearplan became a five-yearone, then seven, and now10. “The momentum pullsyou along,” he says.

Krajewski’s olderdaughter has trained as awinemaker, and his son isabout to do the same.

“It’s not like other jobs,”he says. “You have to

hand it on to somebody.”A potted history of the

recent ownership of deSours run something likethis: 1990, bought byJohnstone; 1997, Krajewskiinvests at Johnstone’srequest; 2003, Krajewskijoins the board; by 2004 hehas bought out Johnstone.

Krajewski is clear whyhe wanted the château: “Itwas a marvellous asset; abeautiful property, with abrand with a followinground the world, and alegacy for the future.”

He has bought morevineyards, replanted nearlyall the original 26 hectares,and built a €3.5m winery.

In so doing, he hasdemonstrated the ticklishnature of making thenumbers work.

Take the apparentlysimple matter of planting avineyard. If you plant at8,000 vines per hectare,which in Entre-Deux-Mersproduces better qualitythan the traditional 5,000,can you charge more foryour wine?

The annual cost ofrunning the vineyard risesif there are more vines init.

“The problem in Entre-Deux-Mers is that theproperties tend to be toosmall to be viable,” hesays. “At 20,000 cases, youcan’t sustain more than ateam of two or three.

“Break-even point is atabout 45,000 cases, thoughit’s a fine line and variesfrom year to year.”

De Sours made 50,000cases last year, and willmake 70,000 in 2012. It hasbeen breaking even on atrading basis for the pasttwo years, and profit isexpected in 2011.

Krajewski has a team of14, but it also makes his

InterviewMartin Krajewski

The businessman­turned­winemakeris creating a familylegacy at Châteaude Sours, writesMargaret Rand

new baby, Clos Cantenac.Once you start buying

vineyards it seems hard tostop. In 2006, Krajewski’swinemaker, SebastienLamothe, suggested theybuy 1.7ha in Saint-Émilion.That has now beenincreased to 3.4ha, andClos Cantenac broke evenin its first year and madea small profit in 2009.Saint-Émilion fetches ahigher price than Entre-Deux-Mers – five or sixtimes as much.

Krajewski also had aventure in Australia,

which has now been sold.He was involved, withwinemakers John Duvaland David Fatches, inmaking small batches oftop-quality Shiraz, Rieslingand Pinot Noir.

But it was all very faraway. “It’s incrediblyexpensive to make wine inAustralia – two or threetimes the cost of making itin Bordeaux,” he says.

Still, he has not fullyclosed that chapter. “I’d bedreadfully sorry not to doanything in Australia everagain,” he says.

Elegant reds that epitomiserefined style of the Graves

Not far from the bustling markettown of Léognan, the road leading toCadaujac climbs a gentle slope andtraverses an expanse of vines,passing many famous propertiesincluding Haut-Bailly.

This estate differs from itsneighbours in that its vineyards areentirely composed of red grapes,although a few rows of white grapesdid survive until the 1950s. This areajust south of the city of Bordeaux isthe main source of the region’s bestdry white wines, but Haut-Baillysticks to what it knows best: elegant,savoury red wines that epitomise therefined leafy style of the Graves.

The property dates back to the1630s, when it was founded by aParisian banker, Firmin Le Bailly,but it did not remain in his familyfor long, passing subsequentlythrough many hands. In 1872 it hada new owner, who built the château– which is little more than adignified and spacious family home –and expanded the vineyards. Thiswas a period of great renown forHaut-Bailly, and its wines sold forprices that sometimes rivalled thoseof the Médoc’s premiers crus.

In 1955 the estate was bought by aBelgian wine merchant, DanielSanders. By this time, the vineyardswere much reduced, and Sanders,lamenting that some of the finestwine-producing soils in Bordeauxwere now mere grazing land, setabout replanting and restoring them.In 1979, his son Jean took over, andby 1988 Haut-Bailly was back to itsoriginal size.

As so often happens at Bordeauxproperties, some shareholders withinthe owning family decided to cashin. Jean, unable to buy out thedefectors, had no choice but to putthe property on the market. He waslucky to find as purchaser a pensivebanker from New York State: RobertWilmers. The two men shared apassion for the wines from Haut-Bailly, and Wilmers was prepared toinvest heavily in renovating thewinery, without wishing to stamp hisown personality on the wines.

The wine trade – writers as well asimporters and winemakers – hadalways been made welcome at Haut-Bailly, where they were often regaledwith a fine meal by Jean and hisshrewd, intelligent granddaughter,Véronique. Wilmers swiftlyrecognised her qualities and madeher administrator of the estate in2000, a universally popular choice.

Haut-Bailly was in Véronique’sblood and she knew what needed tobe done to maintain and improve thequality of its wines. In 2003 she hiredas winemaker Gabriel Vialard, whohad helped put another Graves wine,

Château Smith Haut Lafitte, on themap. She also retained the servicesof Professor Denis Dubourdieu as aconsultant. Bordeaux’s foremostauthority on white-wine production,Prof Dubourdieu was increasinglyturning his hand to red wines aswell.

Sanders and her team know thatHaut-Bailly has never been a winethat strives to impress. It is notsuper-ripe or overtly powerful orvoluptuous. Its distinction is in itsbalance and harmony, qualities thatallow the wine to age gracefully.

Although about half the barrels inwhich the young wine is aged arenew, Haut-Bailly rarely comes overas oaky. And if, in its youth, it canseem restrained and diplomatic, aftera few years in bottle, it exudes thesubtle aromas – blackcurrants,mulch, tobacco, cedar – and showsthe silky texture and discreettannins that are among itshallmarks. Great Bordeaux does notjust impress; it should charm aswell, and Haut-Bailly does this inspades. It is a wine that alwaysseems to have more to give.

Other illustrious growths may bemore coveted by collectors and moregarlanded by some wine critics, butHaut-Bailly has legions of admirers,and purchasers, because it sells at areasonable, though never cheap,price, and rarely disappoints, even intrickier vintages. Véronique andVialard know that the wine’sdistinction comes not from smokeand mirrors in the winery and cellar,

but from the superb quality of thesoils on which the grapes areplanted.

Here, Cabernet Sauvignon, thenoblest variety of Bordeaux, thrives,while the quarter of the vineyarddevoted to Merlot contributes fleshand suppleness to the final blend.

If the Haut-Bailly formula has beensuccessful for decades, that does notincline the owner and his team torest on their laurels.

Wilmers, for example,commissioned a detailed soil study,to allow more informedmicromanagement of the vineyards.

Haut-Bailly has never been a“collectable” wine and is all thebetter for it. Its top vintages holdtheir value, and even gain some, butwine lovers will not make a killingby buying a case. Even great yearssuch as 1982, 1989 and 2000 can beobtained for £700 ($1,146) a case or

less, which, compared with theprices demanded for wines that mayequal but not exceed Haut-Bailly inquality, makes the latter somethingof a steal.

But think of it primarily as a winefor the table rather than the cellar.Yes, buy and store for a decade, butthen pull the cork and enjoy.

Stephen Brook is author of“The Complete Bordeaux”

ProfileChâteau Haut­BaillyIt has legions of admirersdrawn by reliability andprice, says Stephen Brook

Martin Krajewski turned Château de Sours around

Doing just vine: Haut­Bailly’s distinction comes from superb soil rather than smoke and mirrors in the winery

FINANCIAL TIMES SATURDAY JUNE 18 2011 ★ 5

Buying & Investing in Wine

Books draw thecork on thepassions of theBurgundophileBurgundy’s appeal is strangeand unique. It offers constantintellectual challenge, repeateddisappointment and occasional,intense sensual reward.

How do you respond to thefirst, avoid the second andpursue the third? Via books –and the past year has broughtthree very fine ones.

Only one of the threefunctions as a general guide tothe region, Chablis and theMâconnais included. This isInside Burgundy: TheVineyards, the Wine and thePeople by wine merchantJasper Morris (Berry Bros &Rudd Press, £50; checkwww.bbr.com for non-UKsuppliers). Morris hasmacerated in Burgundy for 30years, and has a rangyintellectual curiosity about theregion that goes way beyondassessment alone.

The history of the vineyardsand their winemaking familiesis woven, in this 656-page book,with domain profiles andlandholdings, winemakingparticularities, vintageassessments and attractivelyclear, precise relief maps ofeach significant village.

Charting both vineyards anddomains from Tonnerre toChaintré with this level ofdetail is an ambitiousundertaking, but Morrissucceeds admirably. This willbe the Burgundy book I reachfor first when faced with yetanother unfamiliar bottle orhalf-remembered domain.

There is no room in thisalready weighty single volumefor systematic, vintage-by-vintage tasting notes, but thesummary tasting elementusually provides a useful steer.

A little more lyricism wouldhave been welcome, as wouldthe occasional critical dig.Morris in print is a little morediplomatic than I recall Morrisin person to be, and he musthave plenty of ammunition(after 30 years of frankdiscussions and closefriendships with growers) withwhich to lambast regional andprofessional failings. Thestrengths of this commandingoverview greatly outweigh anydeficiencies, though.

Remington Norman’s GrandCru: The Great Wines ofBurgundy through thePerspective of its FinestVineyards (Kyle Cathie, £40) isa different kind of book. Itcontains no growerassessments at all, but isinstead a scholarly and deeplyconsidered account of theregion’s 33 grands crus; suchtasting notes as the bookcontains are amalgams whichcoalesce to form a kind of idealof each studied vineyard’swine.

The pursuit of grands crus is,for those with the wherewithalto afford it, a less hazardousmeans than most to avoid

repeated disappointment andcourt the sublime; Normanprovides all the context youcould wish for, and isparticularly strong on geology,history and the theory andpractice of terroir in Burgundy.

There is more, though: oncethe vineyards are dealt with, afinal part of the book tacklesgrape varieties, winemaking,tasting, the failings of winejournalists and much else.

Norman is as reluctant torhapsodise as is Morris; he is,though, entertainingly testy onoccasion. Burgundy’s grandscrus truly deserve a book ortwo of their own, and thisunapologetically intellectualauthor has met the contextualchallenge with assurance andskill few others could havemanaged.

The focus of the third bookis tighter still: the twinvillages of Vosne-Romanée andFlagey-Echézeaux, thevineyards and their wines.This is Allen D. Meadows’ ThePearl of the Côte: The GreatWines of Vosne-Romanée(www.burghoundbooks.com:$59.99).

Meadows has, I suspect,created the model for manywine-writing careers bybecoming the English-languageonline specialist for a singleregion through his subscriptionsite www.burghound.com. Thisis the first hard-copy distillateof his work.

Under other publishingcircumstances, the book mightbe called a monograph:Meadows has a very keen eyefor detail, and there are pointswhere readers may reel a littleunder the weight of this(sorting out the climats inBeaux Monts, for example).

Like both Morris andNorman, Meadows has amagnificent historical grasp ofhis subject, which helps shinelight into the thickets of detail.

His book differs from theother two in two importantrespects. Most notably, heprovides a wealth of tastingnotes and scores on specificwines, culled from what is nowa database of 55,000 notes onBurgundy.

Since many of the wines hedescribes are regionalreferences and sometimesmonuments, these notes arevery useful to anyonecontemplating buying oropening one of these hugelyexpensive bottles. Meadows’notes are detailed, sometimestorrentially so, but this isbetter than excessive concision.

Secondly, the Burghound isprepared to let himself off theleash from time to time andexpress something of the senseof wonder and awe that greatBurgundy can inspire, givinghis work a welcome emotionaldimension lacking in Morrisand Norman. This is also oneof the most elegantly designedself-published books to havecome my way.

All three are essentialpurchases for theBurgundophile – and rememberthat their combined cost is lessthan that of a single bottle ofmost of the great wines theydescribe.

Andrew Jefford

New locations show value as knowledge grows

With every new vintage, thediversity of Australian winegrows. This is partly becausethe country’s avant-gardeunderstands the restraintnecessary to allow the inherentdifferences in terroir to emerge.

No less importantly, it isbecause the regions pioneeredover the past two decades arebeginning to show their valueas vines age and the nuancesof soil and climate are betterunderstood.

Here are five regions to lookout for over the next few years.Each has already producedgreat, naturally balanced tablewine of finesse, poise andglobal distinctiveness, and willproduce more. They are theperfect counterweight to thehomogenised output that dogsAustralia’s reputation.

Western AustraliaFranklandIn contrast to Margaret River’sgilded coastal strip, cascadingwith surfers and tourists,Frankland is empty andforlorn, a place where darkforestry plantations seem tohave chased away the people.

But the quality of the wineemerging from its large, remotevineyards suggests this will beWA’s greatest zone for Shiraz:sombre, sometimes profoundwines with an architecturalopulence backed by naturalfreshness. Intricate, bone-dryRiesling and promisingly meatyCabernet are the otherstrengths of Frankland’scontinental climate and iron-rich laterite soils.Top producers: LarryCherubino (Cherubino, TheYard); Ferngrove; FranklandEstate

South AustraliaThe Adelaide HillsForget those images offeatureless, five-mile vineyardsunder a glowering sun; theAdelaide Hills are wooded and

intimate, a many-chamberedlandscape where height, aspectand soils vary constantly, andwhere the heat of the Adelaideplain is dissipated by elevationand breezes. We know itshigher, cooler sites can makemagnificent Chardonnay andprecise and satisfyingSauvignon Blanc. Pinot Noir isprospering in niches in thehills – and Shiraz from thelower-lying sites to the south-east is stonily promising, too.Top producers: Anvers; Arrivo;Ashton Hills; Barratt; BKWines; Bird in Hand; TheLane; Lucy Margaux; Ngeringa;Penfolds; Petaluma; Pike &Joyce; Protero; Shaw & Smith;Tapanappa; Geoff Weaver;Whisson Lake

Tasmania TasmaniaThe tautology arises becausethe entire island is both a stateand, at present, a singleAustralian GI (geographicalindication). Tasmania’s higherlatitudes give it decidedadvantages over the rest of thecountry in terms of an absenceof heat spikes (Hobart on

average has just seven days ayear over 30C). Long, slowripening Pinot Noir andChardonnay are alreadycompellingly good here, andmost of Australia’s finestsparkling wines are built on acore of Tasmanian fruit.Domaine A, though, has provedthat you can even get Cabernetripe here, given a generousseason and a warm, shelteredsite. The island has an excitingcentury ahead of it.Top producers: Domaine A;Apsley Gorge; Freycinet;Frogmore Creek; Grey Sands;Josef Chromy; Lubiana;Moorilla; Pipers Brook; Pirie;Tamar Ridge

Victoria BeechworthOne of Australia’s greatestwinemaking talents, RickKinzbrunner, chose Beechworthin the early 1980s; othersfollowed. Now this granite-soiled zone in the foothills ofthe Victorian Alps stands outfor the production of some ofAustralia’s most food-friendly,layered, textured and subtlycomposed red and white wines.

Kinzbrunner’s own outstandingwork with Chardonnay, Shirazand Roussanne from hisGiaconda vineyard now extendsto an exemplary Nebbiolo –and Julian Castagna up theroad has had fine results withSangiovese, too.Top producers: Giaconda;Castagna; Savaterre

New South Wales OrangeThe vineyards of Orange arethe highest of the five regionsprofiled here (indeed this is theonly GI in Australia whereheight forms part of the zonalstipulation: the vineyards mustlie above 600 metres). As in theAdelaide Hills, white varietiesdominate the heights, and redvarieties flourish beneath; thecomplex soils (you can findboth volcanic basalt andlimestone) encourage furthernuances. Freshness, poise andpurity of flavour are all Orangehallmarks, and the long, cool,luminous season brings naturalbalance and drinkability, too.Top producers: Bloodwood;Cumulus; Philip Shaw;Printhie

AustraliaAndrew Jefford picksfive areas thathave much to offer

Mendoza region suitsboth vines and visitors

Self-drive tourists beware. Unlessyou have a fully functioning sat-nav, getting to the O Fournierbodega and restaurant at the

southernmost tip of the Uco Valley inMendoza, Argentina’s largest wineregion, requires considerable map-read-ing skill.

The nearest outpost is La Consulta,which is little more than a one-horsetown in the middle of nowhere. Fromthere, the road to the winery barely con-stitutes a bumpy dirt track and signs arein short supply. No wonder our driver islost and quietly cursing in Spanish.

Eventually, he regains his bearingsand within seconds we are approachingone of the most stunningly futuristicwineries in Mendoza, if not the world.Perched in the foothills of the Andes,with soaring snow-capped peaks beyond,the O Fournier bodega resembles aspaceship that has just landed on planetEarth.

The subsequent tour and tasting areno less impressive. Ditto the lunch at itsaward-winning Urban restaurant,expertly presided over by chef NadiaOrtega. A blend of Argentine, Spanishand Mediterranean cuisine, the food isevery bit as sophisticated and cutting-edge as its remarkable architecture.

In many ways, O Fournier’s brilliantlyambitious statement winery perfectlyreflects the modern dynamic approach to

wine and tourism in Mendoza. Here,almost everything is new, bold, bright,epic – and well worth the trip.

In addition, the region has plenty ofnatural attributes to recommend itself totravellers. Its spectacular Andean back-drop never disappoints; nor does theweather. With more than 300 days ofsky-blue sunshine, it is ideal terroir forvines and visitors. Last year alone, 1.5mpeople made the trip and more willundoubtedly follow as word gets out.

Currently, Mendoza is a work inprogress. But for the adventurous winetourist looking for the world’s mostexciting, largely undiscovered wineregion, that is all part of the appeal.Many describe its wild, unspoilt bucoliccharm as reminiscent of the Napa Valley40 or 50 years ago. Some believe thewines are potentially much better thanthose of its North American counterpart.

Consequently, O Fournier is not theonly new kid on the block looking to lurein tourist dollars with its wow-factorwinery and restaurant. Closer to the cityof Mendoza is the appellation of Lujan deCuyo, where foodies and oenophiles willfind the tiny region of Agrelo togetherwith several boutique bodegas to tickletheir fancies.

Not all are avant-garde; the likes ofLuigi Bosca and Norton are almost “oldworld” compared with Melipal, Pulenta,Decero and Vistalba. Apart from provid-ing first-class accommodation, the latteralso has Mendoza’s finest French restau-rant, La Bourgogne.

Nearby, are two other wineries not tobe missed. One belongs to the godfatherof Argentine wine, Nicholas Catena. Cat-ena Zapata, with its pyramid design bor-rowed from its Mayan heritage, providesa benchmark tour and tasting.

Fine wine aficionados should also beata path to the door of Achaval-Ferrer’stiny Bella Vista winery in Perdriel on thefamous Via Cobos. For many, Achaval-Ferrer make the best Malbec wines inArgentina. If you are planning on mak-ing the pilgrimage, it is essential to bookin advance.

Boutique hotels are still few and farbetween in the wine regions, which iswhy most people stay in Mendoza Cityand drive out to the vineyards. But thereare exceptions.

Vistalba apart, the other place to stayin Agrelo is the new Relais & ChateauxCavas Wine Lodge where 14 fabulouslyappointed adobe villas dot a 35-acre vine-yard. Here, luxury, privacy and exclusiv-ity are all part of the package,

as are an excellent spa and restaurant.Luxury accommodation is also scarce

in the Uco Valley. But things are acceler-ating apace. This year, a 310-hectaredevelopment, Valle de Uco Golf, Wineand Country (www.valle-de-uco.com) willstart construction of a five-star hotel andboutique vineyard lodge.

Meanwhile, check into the PosadaSalentein, an impressive modern countryhotel set in an expansive estancia. Thereis plenty to do on site, as Salentein hasits own Killka cultural centre. Remark-ably, one can do almost anything: tastewine, tour the monumental winery, wan-der through its art galleries or go horseriding. It is also the ideal base for visit-ing the many must-see boutique wineriesof the Uco Valley, including Andeluna,La Azul and Atamisque.

Much closer to Mendoza City is theaward-winning hotel, Club Tapiz, inMaipú. According to its owner, PatriciaTapiz, it was the first boutique hotel toopen in the vineyards in 2004 and itremains one of the most charming, com-fortable and understated places to stay.

Part of that charm comes from its vine-yard setting and its heritage. The 19th-century property used to belong to thegovernor of Mendoza and has beenexpertly converted into an 11-room hotel,complete with pool and the highly rec-ommended Terrunyo restaurant.

Guests at Tapiz can also enjoy dinnersin the vineyards or cycle to nearby win-eries such as the excellent Trapiche,Familia Zuccardi, Carinae and TempusAlba. For those who are “wined out”,there is horse riding, river rafting orcooking lessons. By which time, theymight have worked up a thirst for theevening wine tasting, which alwaystakes place at 8pm sharp.

ArgentinaJohn Stimpfig discovers thewild charms of the world’smost exciting wine region

The futuristic O Fournier bodega resembles a spaceship that has just touched down on planet earth and its wines are out of this world

Travel tips● If you are staying in Mendoza City,check out the Vines of Mendoza tastingroom near the Park Hyatt Hotel. There,you can taste more than 50 wines fromvarious bodegas and get advice onwhere to go

● Ensure you make reservations for allwinery tours and restaurant visits. Mostcharge for tours and tastings, which last60­90 minutes

● Many wineries accept only cash, notcredit cards. Also some bodegas areclosed at the weekend

● Mendoza is vast, so plan your tripsby specific regions – Maipú, Lujan deCuyo or the Uco Valley. Then aim to dobetween two and four visits a day

Pearl of the Côteby Allen D Meadows

www.burghoundbooks.com, $59.99

Inside Burgundyby Jasper Morris

Berry Bros & Rudd,£50

Grand Cruby RemingtonNorman

Kyle Cathie, £40

6 ★ FINANCIAL TIMES SATURDAY JUNE 18 2011

Buying & Investing in Wine

Hiccups as Chinese bring cheerAnother subtle but signifi-cant change is the slow butdiscernible broadening ofthe market as more Asianbuyers branch out into“super second” wines suchas Palmer, Montrose, Cosd’Estournel, Las-Cases,Ducru-Beaucaillou, Lynch-Bages and Pichon Baron.As a result, these winesnow look increasinglyattractive to investors, notleast because they continueto be bought (and drunk) bytraditional drinkers whohave been priced out of thepremiers crus.

According to Davison,this desirable doublewhammy will have the posi-tive effect of diminishingsupply and pushing upprices. “There are stillplenty of people in Europe,Asia and the US who arewilling and able to buythese wines,” he says.

Arguably, the most dra-matic trend of the past 12months was brand-drivendemand from Asian buyersfor cheaper, “off-prime” vin-tages. As a result, yearssuch as 1999, 2001, 2002, 2004and 2007 unexpectedly out-performed the likes of 2000,2003 and 2005 – turning onits head the old wine invest-ment adage “only buy the

best wines in the best vin-tages”.

“Effectively, Chinese buy-ers were placing the brandbefore the quality of thevintage,” explains Beck. “Soover the past year, therehas been an inverse rela-tionship between the per-formance of the vintage andits quality.”

Without question, somefund managers who reliedon traditional relative valueanalysis were caught out bythis turn of events. ButBeck believes this phenome-non is purely temporaryand has probably peaked.“It has to swing back asbuyers become more dis-cerning,” he says. “Eventu-ally, the premiums of thetop vintages will start toreassert themselves.’

Right now, the front-of-mind vintage is, of course,the much-lauded 2010 thatis currently being sold enprimeur or as “winefutures”, offering the cus-tomer the opportunity toinvest in a particular winebefore it is bottled. Fundmanagers are generallybullish that the predictedrecord primeur prices forthe second year runningwill reaffirm the value to befound in older vintages.

“I think the en primeurcampaign will be a short-

term influence and highprices will have a small pos-itive effect,” says ChrisSmith of the Wine Invest-ment Fund. “Last year, itwas probably 10-15 per centbut this year it won’t beanything like as much.”

While 2010 does not looklike a great investmentopportunity at this earlystage, the smart money willfocus on a handful of stand-out vintages that seem goodvalue. For many, the pick of

the bunch is 2005, followedby 1996 and 1990. “2005 is atruly great vintage thatlooks cheap and has beenout of the spotlight for afew years now,” saysLiv-ex’s Justin Gibbs.“Many of the wines aretrading at less than their2008 peaks, so it looks like avery good buy.”

As for the rest of theyear, the consensus view isthat the market will returnto more steady growth.Beck believes a return tolong-term average pricerises of 15 per cent a year is

probable. “We would cer-tainly like to see a morestable and sustainable levelof growth,” he adds.

This is roughly in linewith Smith’s prediction thatthe market will grow by 21per cent in 2011, with Chinaand the strength of its cur-rency being key drivers. Healso sees a trend towardsinvestors looking at wine asa hedge, rather like gold.“With concerns over risinginflation, investors will bedrawn to physical assetssuch as wine,” he notes.

Are there any dark cloudslurking on the horizon forthe fine wine market? “Thefundamentals remain soundand as long as China’s GDPcontinues to grow, finewine will undoubtedly bene-fit,” says Gibbs. “Also, weare still in the very earlystages when it comes toChina, which obviouslybodes well for the future.

“Against that, with somany eggs in one basket, asevere, unforeseen shockfrom China, whether it iswine-related or a squeezeon money supply, couldhave a massive negativeimpact. Going forward, myview is that there will bebumps in the road. But overthe medium to long term,the wider picture looks aspositive as ever.”

Fine wineswill benefit ifChina’s GDPkeeps rising,says Liv­ex’sJustin Gibbs

Questions to ask before youthink of laying down a bottle

Building a wine collectiontakes patience, skill and agood sense of timing.

Whether it is designed forinvestment, drinking or abit of both, the ideal cellarcomes together one, six, 12bottles at a time – andoffers a combination of thethrill of the chase, achieve-ment and reward.

“Before committing toanything, you must askyourself: ‘What kind ofdrinker am I? What kind ofbuyer am I?’,” advisesShaun Kiernan, fine-winemanager of the WineSociety.

For a one-time fee of £40,the 137-year-old wine buy-ing co-operative providesmembers with lifelongaccess to bottled wine fromall regions and at all pricelevels.

“How much do you tendto spend a year, and perbottle? What countries,grape varieties or styles doyou like, and do yourchoices change with thekind of food you eat, orwith the season?” saysKiernan.

He suggests that anyonelooking to lay down winesstarts at £10 a bottle.“Below that, you’ll struggleto get anything that willkeep more than years.”

While The Wine Societyencourages members to buyfor drinking rather than forspeculation, Kiernan notesthat members may considerselling if their tastes or pri-orities change, or simplybecause they have amassedmore wine than they willever drink.

Budget and level of expe-rience aside, examining thecontext, tastes and motiva-tions that drive each collec-tor helps determine how

much discipline they maytolerate, and the directiontheir passion may take.

“For me, the best way isto sit down with my clientsand talk things over,” saysSimon Staples, sales direc-tor of Berry Bros & Rudd.

“I don’t think you shouldoveranalyse; that takes thefun out of it.

“But a good cellar takessome planning, and you canalways change directionlater on – particularly ifyou plan well now.”

Berry Bros, The WineSociety and other mer-chants including Justerini& Brooks and Fine+Rareoffer formal cellar plansthat give novice and experi-enced collectors a variety ofoptions based on a definedstrategy and monthly pay-ment plan.

These start at about £25 amonth towards a collectionfor drinking or a minimumof £250 a month for aninvestment-grade portfolio.

Such plans also providean entrée to rare or hard-to-source wines as well as Bor-deaux wine futures, the sta-ple of every investment cel-lar – and, for those whoneed it, some focus.

Even the most independ-ent hunter-gatherers findthat supplementing theirself-directed efforts withguided cellar-planning can

prevent costly mistakes.Stephen Williams, manag-

ing director of the AntiqueWine Company, says collec-tors should resist filling acellar all at once – particu-larly when the wine is to bekept in the house.

“Cellars are much moreuseful – and look muchmore aesthetically pleasing– when they are full,” hesays. “But creating acellar for the longterm isn’t a one-offbuying spree; it is anongoing process.”

Extending a cellarunder one’s house isan expensive prospect,and moving wine isalways discouraged.

Not least, a col-lector with noroom for moretrophies mayhave to forgosome enticingopportunities.

For anyonebuying specifi-cally to resell,one pitfall is tostray from thewell-defined uni-verse of invest-ment wines –mainly a list of afew top Bordeauxand a few Bur-gundies that haslong defied expan-sion.

Over time, quality hasrisen – often at the expenseof quantity – as hasdemand.

“Here are some scarynumbers,” cites Staples. “In1982, Château Mouton Roth-schild made 60,000 cases andin 2010, they made 17,000. In1982, Château Latour made35,000 cases, and in 2009,they made 9,500.”

Prices, mainly driven byChinese buyers, havesoared and Staples is confi-dent this will continue.Berry Bros Hong Kong hasfewer than 100 mainlandChinese clients, and theyspent £30m on 2009 Bor-deaux alone. “We have onlyjust scratched the surface.”

The moral is: get in witha merchant that can pro-vide a coveted allocation orbe left behind.

While advice and accesscan be invaluable, collectorsthemselves may perceivetheir own weak points.

Although new to wine col-lecting, Francesco Giovan-noni, a reader in economicsat Bristol University, consid-ers himself too independent

to commit to a profes-sional cellar plan.

His cellar comprises afew hundred bottles,mostly Champagne,which he feels he shoulddrink sooner than later.

“If anything, I am tooscared to open what I

have. I think: ‘I havepaid all this money;I need a specialoccasion.’”

This excuse isquickly followedby a justificationworthy of an econ-omist.

“If I had 3,000bottles, I mightfind it easier toopen them –maybe I’d feel lesspressure to accu-mulate,” he says.

Further resourcesare publishedonl ine atwww.ft.com/wine-investment-2011

CollectingStarting a cellartakes skill, timingand patience, saysMaggie Rosen

Tips for a top cellarFor all wine collectors● Develop a workable, affordable strategy for a cellar youcan live with – and love● Review periodically, as preferences or circumstanceschange● Buy from a few trusted sources: promiscuity can betime­ and cost­inefficient● Buy from someone who has tasted the wine you want● Store wine in a temperature­controlled environment● Wine in larger bottle formats seems to age more slowly

Especially for investment cellars● Store wine in a dedicated bonded warehouse tomaintain condition and for logistical ease● Buy more than you plan to drink● When selling, plan well ahead to get the best price● Monitor your portfolio – but not constantly

Grape, whole grape andnothing but the grape

The increasingly giddy interestin natural wine has trackedthe quest in food circles forauthenticity, quality and

quirk. For wine, this means a drinkthat is made from the grape, thewhole grape and nothing but thegrape.

Many in the wine world find thisthreatening, as it highlights all that isnot natural about most wine.

Producers of even top labels usechemicals of all types in their vine-yards, along with cultivated yeasts,powdered tannins and countlessingredients and manipulations toachieve desired flavour, colour andmouthfeel. The additive that gets themost attention is sulphur dioxide(SO2) – that is, sulphites used tocontrol fermentation and prevent oxi-dation – to which many drinkersbelieve they are allergic.

In short, it takes a great deal ofintervention to make a “perfect” wine,bottle after million bottle.

“In my opinion, all wine is not natu-ral – but we sell this dream to con-sumers that it is,” says IsabelleLegeron, a wine consultant and educa-tor who focuses on natural wine. “Weshow them gorgeous stories, rows ofgreen vines – but we don’t ever ques-tion how that drink is made. There isno ingredient labelling, and you don’tknow what goes into your wine.”

Eschewing the safety net of chemis-try and corrective techniques meansfocusing on achieving a balance in thevineyard, being extremely vigilantover what is happening to vinesthroughout the growing season, andaccepting that nature is not only boss,but knows best – even in the cellar.

Natural winemakers use wildyeasts, for example, which are capri-cious, whereas manufactured yeastsare bred to be dependable.

This kind of farming is not for eve-ryone, and difficult to do on a largescale. But many find the results arefreshing change from the sea ofmediocre corporate wine – like the

unexpected jolie-laide who steals thescene from the conventionally beauti-ful film star.

Doug Wregg, sales and marketingdirector of Les Caves de Pyrène – oneof the UK’s main importers of naturalwine – was introduced to natural winea few years ago while in Paris.

“I had never even heard of it, didn’teven know there were natural winebars,” he says. “But I was just blownaway by it. It was speaking in a differ-ent idiom.” To the jaded palate, thewine has a purity and finesse.

“It has a welcome edginess to it,”says Katherine O’Mara, owner ofthree-year-old Artisan and Vine, thefirst wine bar and shop in London tohighlight natural wine.

“I find the flavours are clearer andpurer, it has a freshness and energythat are absent in most wine. Thewines actually taste to me like theywere once real fruit, as opposed tofruit-flavoured sweets.”

Though new to many, natural wineis, at heart, what all wine used to be.And its practitioners comprise someof the most famous – Gianfranco Sol-dera, Domaine Leroy, Domaine de laRomaneé Conti and Jean-Louis Chaveamong them. But in most cases, theyhave not trumpeted this aspect.

“Great producers don’t want to belumped with mere mortals,” says

David Harvey of Raeburn Fine Wines.“‘Natural’ also suggests the faulty-funky, overly laisser-faire brigade,which the finer practitioners detest.And it suggests cheap price pointsand drunken youth, rather than winelovers with good disposable income.”

If the natural wine scene in NewYork and Paris – and more recentlyTokyo and London – is an indication,these producers have little to worryabout. It is their clientele that packsArtisan and Vine, Bar Battu, Brawn,Green and Blue Wines and Terroirs(all in London).

At the higher end, restaurants suchas Michelin two-starred Hibiscus inLondon and Bell’s Diner in Bristol,have devoted a portion of their list tonatural wines.

Whether there are more faults oroff-notes in natural wine than in moreprocessed wine is a subject of spiriteddebate. Even those who considerthe sometimes stronger, forthright fla-vours integral to the wine’s personal-ity maintain that standards should bejust as high as with more “processed”wine.

Peter Hogarth, wine buyer forWhole Foods Market, keeps his bar-rier to entry high out of necessity.

“There is obviously a slight concernthat not all these wines are palatablefor everybody, so we have to be care-ful about which natural wines westock and promote,” he says.

Hogarth and others cite therestrained use of added sulphites innatural wine as one of the main defin-ing factors, but by no means the onlyone.

“There are plenty of conventionalwines that undergo natural fermentwithout industrial yeasts and are bot-tled unfined and unfiltered,” he pointsout. “So you could end up includingpretty much everything, and the termthen becomes meaningless.”

Lionel Periner, sommelier at Bell’sDiner in Bristol, says the lack of anagreed definition or certification pro-tocol – such as exists for both organicand biodynamic production – requiresa leap of faith.

“Because it is up to the producers todecide what natural means, you haveto trust them,” he says. “You alsohave to trust your own tastes.”

Details of where to try or buy naturalwine are published online

Natural wineMaggie Rosen takes a fewsips and asks if it is alljust a storm in a goblet

Wine how it used to be: the natural version has a welcome edginess, says Katherine O’Mara of Artisan and Vine Rosie Hallam

A few to try . . .Barbarossa 2009 Domaine ComteAbbatucci, Ajaccio, Corsica. £39(Artisan and Vine)

Baux de Provence (any vintage),Domaine Henri Milan, £19 (Artisanand Vine)

Saint­Joseph 2009 DomaineDard et Ribo £26.99 (Les Caves dePyrène)

Cuvée Marginale 2009 Domainedes Roches­Neuves £27.99 (LesCaves de Pyrène)

Clos Fantine Faugères 2009£12.99 (Whole Foods Market)

Barbaresco Crichet Paje 1999Alfredo Roagna £124.99 (WholeFoods Market)

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