One of the most popular subjects of this week’s trip to Bordeaux is the Bernard Madoff scandal. Sure, we've talked about wine (particularly 2006, because I am tasting the vintage from bottle), as well as the grim economy and the change in politics. But the French find it almost hard to believe that an individual like Madoff could allegedly scam so many high-wealth individuals, banks and other financial institutions.
I am less surprised considering everything else that has gone down in the United States in the past three months. It’s all been about unbridled speculation and greed.
But I pointed out to Bordeaux wine producers and merchants that the same could happen with their high-end wines. Think about all the speculation on 2005 Bordeaux. Think about all the wine funds, particularly in the United Kingdom, that have invested tens of millions of dollars in blue-chip Bordeaux from top vintages such as 1982, 1989, 1990, 2000, 2003 and 2005, among others. Think about all the thousands of cases of wine in storage waiting to one day change hands. None of this wine investment was regulated in any way. And it didn’t have to be. But it makes me worried. (Note the fraud verdict earlier this year in a case involving a company selling wine as an investment.)
Wine prices for blue-chip, investment-grade wines are freefalling as indicated in the recent auction results in New York. Some have lost 40 to 50 percent of their value in this quarter. And I hear that people still want (or need) to sell their wines. Right now a lot of wine is being sold back to French négociants from UK wine merchants because of the massive decline in the pound against the euro. I guess many people never had any intention of drinking the wine they bought—it was just like another investment.
I hope there is no equivalent of Bernard Madoff lurking in the wine world somewhere out there. But it wouldn’t surprise me. Who knows?
Anacleto Ludovic — paris france — December 19, 2008 12:05pm ET
David A Zajac — December 19, 2008 12:24pm ET
Katherine Brown — North Carolina — December 19, 2008 5:15pm ET
Mark Reinman — NJ — December 19, 2008 6:38pm ET
Lorenzo Erlic — victoria canada — December 19, 2008 8:08pm ET
James Suckling — — December 20, 2008 2:34am ET
Brad Baker — Vancouver Canada — December 20, 2008 11:22am ET
Charles Dalton — Houston, Texas — December 20, 2008 11:48am ET
Kirk R Grant — Bangor, Maine — December 20, 2008 12:53pm ET
Massimo Marinucci — December 20, 2008 6:59pm ET
Lorenzo Erlic — victoria canada — December 20, 2008 9:18pm ET
Lorenzo Erlic — victoria canada — December 20, 2008 9:26pm ET
Michael B Ray — nj — December 23, 2008 7:19pm ET
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