Influencers

International Consumption rates are the main macro influencer on price:
IN the last 120 years we have witnessed an overall growth in global wine consumption based on:

Change in tastes – with an increasing adoption of wine as a beverage in new, fast growth economies, caused by new demand from the booming middle classes

Slower but consistent increase in wine consumption in the mature Markets of Europe and N. America

At the top level of “spend per bottle” we also see more consumers in a global context year on year. For the newly well-off, a culture of ‘spend fast’ on luxury goods – the car, the watch, the penthouse – also includes wine. The most costly bottles provide the greatest feeling of wealth; but only a handful of wine producers carry ‘luxury brand status’.

Most recently though, new buyer demand has dropped off considerably and the values of wines from top estates have dropped as a result, this means anyone speculating when buying a wine collection needs to be aware of a potential loss in their value.

The Classic Vintage:
Power of the Year – it’s a No No for the super wealthy to be seen drinking a bad vintage – even though in many difficult years there are very many good wines produced. This creates strong over demand for the very best years which can push prices up rapidly.

A good year also lends to Trade talk-up, where producers, journalists and wine merchants stimulate high demand through pitching a new vintage as the best ever. This hype based on quality reports permits setting prices higher, so whilst it will probably be a good vintage to hold for the mid-term, how much of it to be handled with care and timing of a purchase will be paramount.

Connoisseur Opinion:
American Robert Parker’s score will influence a price significantly. His 2nd barrel scores for the 2009 vintage, where a handful of Chateaux were give upgrades to the perfect 100 score, saw prices rise as much as 30% in a day for those fortunate estates.

Wine Provenance:
Good provenance, where a wine’s purchase history can be traced, is an essential tool for keep the value within the market mean range.

All wines bought for eventual resale should be held in the original packaging of the winery that bottled the vintage; in the instance of the large French estates these are referred to as Original Wooden Case (OWC).

All wines bought for FGB’s clients are stored under bond in OWC.

Other market forces:
Economic trends and trading occurrences across financial markets can influence confidence across whole portfolios and therefore we have seen both rallies up and down with wine prices over recent years. The method of holding wine as an individual or small investor group gives the control to nurture a portfolio through a soft market and sell promptly in the optimum periods of good demand; wine funds tend to suffer more in a soft market, due to their size and need to handle multiple redemptions with an asset that has limited liquidity.

News

5th June 15
Italian wine gaining more share of fine wine market; Sassicaia 2009 with 4.4% share alone.

18th May 15
Mr Vine, the free UK wine app for buying classy everyday wine for door delivery, is now live on the app store - its getting an amazing reaction across the wine trade!

7th May 15
Election day. Will we end up with a 7 Party coalition?!

29th Apr 15
Bordeaux En Primeur release well underway for the 2014 vintage; some reasonable start-pricing by the French sellers but a further cut of circa 5% to 10% was what the trade wished for.. C'est pas formidable!

4th Feb 15
Wine prices struggle but hints of an upturn in demand as buying for Chinese NY influences market

10th Dec 14
Low fine wine demand and the growth in more discerning international buyers has seen a year of price falls

6th Sept 13
Warwick Ross & David Roach’s entertaining Film/documentary ‘Red Obsession’ opens in New York today: covering Chinese Billionaires’ insatiable demand for the world’s most expensive wines

12th Jul 13
A six-litre Methuselah of Romanee-Conti 1989 DRC will go into Sotheby's Hong Kong auction this September with an upper estimate of HK$800,000!

30th May 13
2013 late BDX crop development could point to delayed harvest.. another tricky vintage? Far too early to call..

19th May 13
After a softer 2012, wine prices recover with 5.9 pc this year as gold bullion slid 17 pc

15th May 13
Q1 buying spree halted by 2012 release, June set for gains on cased stocks

11th Dec 12
Robert Parker sells significant stake in Wine Advocate and steps down as Editor, with new editorial focus for Far East

6th Dec 12
Hong Kong's King Power Group buys Bordeaux property Chateau Bernadotte from Champagne heavyweight Louis Roederer

24th Nov 12
Good luck to Aymeric de Gironde, former AXA Millesimes commercial director who takes over from Monsieur Prats at Cos today

16th Nov 12
Touch Invest (New York) appoints First Growth Bordeaux as commentator on wine portfolio trading; visit www.touchinvest.com

11th Sept 12
Wine market firms up: Christies Hong Kong - auction season starts with 100% of reserve prices hit

7th Sept 12
New St Emilion Classification: Pavie and Angelus are portfolio tips as they join Ausone and Cheval Blanc as Premier Cru 'A' Chateaux

21st June 12
Pichon Baron one to watch having outperfomed the Left Bank average Jun11-Jun12 (liv-ex)

25th May 12
London International Wine Fair's star stand: "Wines of Chile"

18th May 12
Pontet Canet demand most popular for BDX 2011 releases

26th April 12
2011 En Primeurs all release above 2008 prices

23rd April 12
Lafite's 2011 marked down, UK average price £5400

20th April 12
Buying activity on cased Latours increases

19th April 12
Latour's 2012 vintage will be last sold En Primeur!

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