Betting on Older Vintage Price Appreciation
I have read the comments on my June 21 blog on Bordeaux's red-hot 2009 futures campaign, and most of them are critical of the high prices. But people keep buying!
Wine Spectator's well-researched June 24 news story reports unbridled demand: "Despite the highest prices on record, the world is clamoring for 2009 futures. In the past week, all five first-growths have released their first tranche, or allotment, at prices that floored even some trade veterans. Château Haut-Brion released its first tranche Wednesday morning at $612 (500 euro) per bottle from the cellar, before négociants and retailers add their markup. That matched the price of Latour's first tranche Tuesday, while Margaux, Mouton-Rothschild and Lafite Rothschild all released at $550 (450 euro). In Sauternes, Château d'Yquem came out Thursday at $540 (440 euro)." But as the article points out, the increased interest is coming from the Asian markets of Beijing, Shanghai and Hong Kong. American interest is down.
Much of the reporting, however, seems to only focus on the frenzy. A June 14 story on Bloomberg.com carried a headline that read: "Bordeaux 2009 Futures Sell 700 Cases an Hour, Freeze Computer."
I think so much of this is hype. That Bloomberg headline is laughable. So much urban legend is already being passed around cyberspace about the vintage. However, the fact is that 2009, clearly a classic vintage from what I have tasted, is the most expensive young vintage ever sold from Bordeaux.
Prices for the top wines seem way too expensive and, personally, I am not buying. But I guess if you have the money and you don't mind dropping thousands of dollars a bottle for the very best of the vintage, then what can I say?
I really don't think there is going to be a big upside for these wines for many years to come. And I have little sympathy for people who bought for investment. It's like buying blue-chip stocks today at elevated prices. You are not going to make much of a return on reselling in the short term.
One thing you should think about is the comment in my last blog from Tyler Binney of Georgia: "I just received an offer for 2009 Latour for $1,750 per bottle. I also know where I can pick up a bottle of 1982 Latour for $1,350 with a stellar provenance. Which would you do? Seems like a no-brainer to me."
Tyler's right. That is a no-brainer. But be warned. Expect prices for older vintages for the top names to increase in the near future due to the extremely high prices of the 2009s. If you were thinking of buying past great vintages of Bordeaux, I would do so soon. If you are selling, wait for a few months and make more money.
Among other top vintages, the 1982s, 1989s, 1990s, 1995s, 2000s and 2005s are all most likely going to get more expensive. I have seen this happen so many times in the past three decades after a top vintage is sold at an extremely high price. And 2009 is no different.