Invest in fine wines

The 2000 vintage in Bordeaux will go down in history as being a truly fine year for the best red wines of the region.

Only 3 or 4 harvests per decade in Bordeaux, have the right climatic conditions to produce perfect fruit which, in the right hands, can create truly great wine. Many adjectives are used to describe wine but in this context the word ‘great’ implies a wine which has formidable power in its youth and the ability over time, to develop depth of flavour and aromas. Remember, this complexity of flavour cannot be achieved by any short cuts. The quality of a vintage really depends on a balance between fruit, carefully extracted tannin and acidity. All are important in a wine but in general, it is the acidity which is the life battery of wine and those wines lacking the required balance will fade away long before their more acidic siblings. The 2000 vintage has the three ingredients in abundance and now as the wines approach their 14th Birthday, the qualities are really beginning to show.

There are plenty of delicious Cabernet Sauvignon blends created in the world but many modern wine makers have not followed the Bordeaux tradition of packing the juice full of extract, which for Bordeaux, makes the wine almost undrinkable for the first decade of its life. New World wines can be consumed when young and many wine buyers may not have the patience required to buy something and then pay for its storage for years before pulling the cork however, those who are prepared to wait are undoubtedly rewarded. Prices for 2000 Bordeaux have been flat for 3 years and although some wines will benefit from some more ageing, now is an incredible time to pick them up.

Hotel Hermitage wine cellar

The reality today for investors, is that while prices for young vintages hover in a fragile state, there is not enough 2000 vintage to supply any tangible increase in demand. The core reason for this is that when the wines were released in 2001 the buyers were almost entirely an old fashioned, traditional bunch who bought wines because one day they would drink them. Compare this to the buyers of 2009 harvest who we believe were almost entirely speculators. It means that ownership is truly fragmented and as the Hotels and Restaurants of the planet, as well as the wine enthusiast, start to look to replenish their stock, finding any volume becomes increasingly difficult. This is the time to buy.

Not all wines are down on their luck. In terms of anomalies, the Mouton Rothschild 2000 chart shows a dogged resistance to price softening and this has partly been attributed to the Golden Ram stencil on the bottle rather than the intrinsic quality of the contents. Whatever the reason, Mouton are not making any more of the wine and so we believe it should feature in collections.

In summary, 2000 Bordeaux has the quality and fragmentation of ownership which should make the prices fly with just a hint of new demand. In the meantime, they are all about to taste delicious which should be sufficient motivation for many to wish to acquire them. The traditional approach in the UK has been to buy 3 collections and then sell 2 of them in the future to make the 3rd collection become free drinking. Alternatively people may take a 35% to 40% increase over the next 3 years and put profits to other uses but the key is that we strongly feel that this opportunity will not last that much longer.

peter-lunzer

Article by Peter Lunzer
Globally Renowned Wine Investment Fund Manager
www.lunzerwineinvestments.com

 

 

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