Frightening tales of the financial markets have filled the papers for the past week or so, and I’m sure I’m not the only visitor to wikipedia looking up “volatility”, “margin call”, “naked short selling” and the like. It has been educating.

The wine market is thankfully much more simple, and much more stable. Essentially, I think, because merchants and customers buy and sell something that is tangible, something real. Much as the Americans refer to buying “en-primeur” as “futures”, there are no “fine wine derivatives” for the moment, something for which we can be grateful.

Compared with the financial markets, the fine wine market appears to be in excellent health. Our recent offer of 2006 Ch. Lynch-Bages was overwhelmingly successful, with more than 1,000 cases sold in 24 hours - our buyers are still making calls to Bordeaux to try and source more. And up the road at Christie’s, a private collection of 2000 Bordeaux realised a total of £1,654,775 with 2000 Ch. Lafite-Rothschild, a wine that is a good barometer of the market, fetching an impressive £10,925 per case from a trade buyer. That the first half of this collection was sold on “Meltdown Monday” and the second part, including the Lafite, sold the following Thursday is surely a good indicator of the wine market’s current good health.

Moreover, I guarantee that drinking a glass of Lafite is infinitely more pleasurable than eating a share certificate

The air of expectancy that greets each new Bordeaux vintage reaches its annual climax during the week of tastings organised in early spring each year throughout the region by the Union des Grands Crus. Commercial necessity and the need to be among the first to register an opinion and a report about the new wines means that anyone who is anyone is in Bordeaux during that week.

It is hard to see the pattern being broken, ingrained as it is by habit and expectation, but is this actually the best time to judge the wines? It is often the case that a later tour of the châteaux can yield a few surprises.

It has been my habit for about a decade to visit Bordeaux in late May or early June. The advantages are manifold. There are fewer wine merchants about, more time to talk to the movers and shakers and samples are fresher, as those for the Union tastings are drawn well in advance to cope with the volume of visitors. Most importantly, the wines have shaken off their cold weather demeanours and taste easier and brighter. Any problematic malolactic fermentations have been completed, the wines sit more comfortably with their oak and are more indicative of the true personality of the vintage. Even more importantly, there are tables available in Bordeaux’s best restaurants!

The week-long visit this year, to taste the 2007 vintage was no exception. It should be said that the early impressions formed by the first observers during the Union tastings were not askew. This is, indeed, a light, charming and attractive vintage for early drinking, but during our visit, the successes of the year demonstrated something extra, perhaps not profundity, but certainly a level of intellectual engagement beyond our expectations. Highly impressive wines were found at Latour, Pontet-Canet, Ausone, Conseillante, Margaux and, against initial impressions, Lafite where Charles Chevalier again bemoaned the need to present his wines so early in the year. Lafite is a difficult wine to read when young at the best of times. The 2007 blossomed as generously during our tasting as M. Chevalier’s smile.

Our tastings were not exhaustive, but increasingly positive notes are found at Mouton, across the range including d’Armailhac and Clerc-Milon, Pichon-Baron, Figeac and Domaine de Chevalier, the latter in both red and white. From Sauternes, Ch. Climens was inspiring.

The success of any Bordeaux En Primeur campaign is defined by the balance between demand and supply, with demand being fuelled by the year’s reputation or pricing. In 2007 the pricing did not offer enough differential between the excellent 2006s, not helped by the decline of the Pound against the Euro. Writing this now, we know that the market for the 2007s is subdued, but let me offer a word to any canny Bordeaux watchers reading this. Do not dismiss the red wines of 2007 in Bordeaux because of a slack En Primeur campaign. When the wines are bottled and shipped, they will not cost any more than they do now. There are some very good bottles indeed in this vintage, and some will be better than expected. They will be delicious to drink before the 2005s and 2006s, and the dry and sweet wines are outstanding. I anticipate even more pleasant surprises await us. On reflection, Bordeaux 2007 may have something worthy to offer the Bordeaux devotee after all.

To read the full reviews of the properties visited during Berrys’ recent trip to Bordeaux, click here.

Behind the scenes: Ch. Gruaud-Larose

A definite favourite of ours and our customers, Ch. Gruaud-Larose produces one of St. Julien’s most full-bodied and long-lived wines and we were recently fortunate enough to offer you four of its most exceptional vintages - the 1990, 1996, 2004 and 2005. Each of these wines boast a very distinctive personality yet none of them fail to seriously impress - so what is it that makes Ch. Gruaud Larose consistently produce such high-calibre wines?

For many years Gruaud-Larose was owned by the négociants Cordier, who also own Château Talbot. It was sold in 1993 to the French conglomerate, Alcastel Alstom, which in turn sold it to the Taillan Group, owners of Chasse-Spleen and Haut-Bages Libéral, in 1997. It would be fair to say that the château has seen many changes since its conception yet there has always been one constant…the talented Georges Pauli, who, throughout all these changes has remained as régisseur and winemaker.

Gruaud-Larose now boasts 84 hectares of vineyards located on a gravel-rich plateau just to the west of Château Beychevelle. The wine is a blend of Cabernet Sauvignon (65%), Merlot (25%), Cabernet Franc (8%) and Petit Verdot (2%). Vinification takes place in a mixture of wooden vats and cement tanks and the wine is aged in oak barriques (30% new) for 18 months.

Becoming marvellously harmonious and developing complex and beguiling characteristics of concentrated black fruits, cedar, spices and liquorice with age, Ch. Gruaud Larose truly is the king of wines and the wine of kings.

In 1855 the wines of the left bank were “classified” on the orders of Napoleon III (who, incidentally spent some time in BBR’s St James’s cellars during his exile in the 1830s). This new classification was designed for the Exposition Universelle de Paris, at which the wines would be on display. The wines were ranked by the brokers of the time, with rankings largely based on the wines’ selling prices at the time and the reputations of the various châteaux.

There has been one major change to the classification since (minor changes being the addition of Cantemerle in 1856, and the incorporation of Ch. Dubignon into Malescot St Exupery in the 1870s) when in 1973 Mouton-Rothschild was “upgraded” to first from second growth status. Those who believe that Mouton should have stayed a second would say that this upgrade was all about politics and strong lobbying from the powerful Phillippe de Rothschild; fans of the château will point to the fact that Mouton was under english ownership when the original classification was made - more than reason enough for it to miss the cut first time round…

In the world of fine wine the first growths are still very much the aristocracy; the best. Petrus & Le Pin may sell for more money, though this is largely down to a lack of supply, and Ausone may get the Parker points, but in terms of brand the first growths have it. These are the vinous Rolls Royces.

So how much are they worth? And are they worth it at seemingly ever-increasing prices?

In 1983 a case of 1982 Lafite would set you back in the region of £450; the same case today would set you back around £20,000. The best wines do seem to appreciate in value. The “is it worth it?” question is twofold and needs two answers. The first answer is a simple “yes”: a case of 82 Lafite is worth twenty thousand pounds because someone will pay twenty thousand pounds for it. The second answer is more tricky, because the question is: “is there twenty thousand pounds’ worth of pleasure in a case of 82 Lafite or, more simply, is there two thousand pounds’ worth (with the additional bit for the taxman) of pleasure in a bottle of 82 Lafite?

My answer to this again is a definite yes. It’s not just about the experience of tasting the very best, about an experience that is nigh on impossible to match or replicate, though these do play a part. For me, it’s a meeting. A meeting with Lafite, a meeting with the vineyards, a meeting with the sunshine of 1982 and a meeting with the harvesters, the grapes, the barrels, the chais and with Bordeaux. A meeting with whoever you’re sharing the bottle with and a meeting with whoever else has tasted the wine - from the winemaker as he made it to the banker drinking it at the next table . A meeting with ones maker, who is ultimately the creator of what’s in your glass.

I’ve read many discussions as to the true definition of “fine wine”. My answer is that a fine wine is a wine that will provoke thought or conversation other than a simple “that’s ok” or “yup, goes well with the lamb”. A step up is truly fine wine - the icons, and I have been lucky enough to taste and drink bottles that have not only provoked thought or conversation, they have provoked emotion. Barrel samples of both Le Musigny, Mugnier and Ch. Margaux 2005 overwhelmed me: what moved me was that an experience so beautiful could come from vines, soil, sunshine and some finishing from man. Epiphany isn’t quite the right word; I prefer theophany: a divine disclosure. Which seems like a good deal for a couple of thousand pounds.

We are nearing the end of the 2007 Bordeaux en-primeur campaign, with the last few wines expected to be released in the coming days. This time of year is usually a busy and hectic one in the Fine Wine office, though this year it has been a little quiet. Our favourites have sold relatively well, though we have walked away from our allocations of a great deal of wine, largely on account of prices.

We pride ourselves in this office on not selling wine that we wouldn’t buy ourselves (funds permitting) and there have been many 2007 releases where we just couldn’t see the value. The key advantages for buying en-primeur are simple: one is assured of the provenance of the wine when it comes to drink it, one has a greater degree of flexibility in terms of bottle size (I have a penchant for double-magna) and, importantly, it is often the cheapest way to buy, the idea being that the châteaux offer the wine early at a lower price in order to help their cashflow.

The final factor has been the sticking point for a few wines this year. The strong euro hasn’t helped us by any means though the pricing policy of the châteaux has varied from the reasonable (Mr Barton, as always) to the unbelievable (plenty of examples here). Wines such as Leoville-Barton will almost certainly sell out, and should be more expensive to buy once physically available; this also holds true for Lynch-Bages, which almost invariably jumps in price at some stage (the trick is to call the timing of this jump).

Pontet-Canet and Haut-Bailly are different calls: they don’t quite have the “form” of Leoville-Barton or Lynch-Bages - we follow these wines because we know that a great deal of passion, expertise and investment is going into these properties and that they are very much on the up.

So how much is a case of wine worth? Is a case of 2007 Lynch-Bages worth £408? My answer is yes, no question. In five or ten years’ time buyers of this wine will be able to drink a bottle of outstanding Pauillac for an “on the table” price of less than £42.00. Our cheapest retail price for Lynch Bages is £66.00 for the 1994 (a vintage comparable with 2007 in terms of quality, maybe) and it’s notable that en-primeur buyers of the 1994 paid just over £180 per case for their wine…

At the time of writing we have one first growth available: 2007 Ch. Margaux at £2460 per case in bond. I personally think that the price is about right: it’s cheaper than the 2006, a quarter of the price of the heavenly 2005 and, most importantly, an excellent wine, well worthy of its status as one of the best wines in the world.

It does make the 2004 look like exceptional value at £2400 per case, though stocks of the 04 are dwindling. The release price of the 2007 is more than 150% up on the release price of the 2004, and this does prompt arguments of a lack of realism on the part of the Bordelais, though can we really argue that they should be giving their wine away when they see their previous releases more than double in price in a matter of a few years?

Today, the Indian wine industry is still in its infancy; however technology exchange in winemaking and viticulture from Europe and Australasia means India is likely to challenge the supremacy of traditional winemaking countries.

Local demand (the market for wine in India has been growing at over 25% per year) and aggressive promotion from the state government means more and more ambitious Indians are turning to fine wine as a mark of social standing.

Berrys believes, if the increasing number of vineyards planted in parts of western and southern India are any indication, India will soon be taken seriously as a fine wine-growing nation.

Alun Griffiths MW predicts: “India has the potential to embrace wine in a big way and the economic muscle to dictate to producers what style of wine they should be making.”

The Fine Wine Market enjoyed an eagerly anticipated boom from late 2005.  Prices had been somewhat flat for a couple of years and the top wines, particularly those from the 1996 & 2000 Bordeaux vintages, were beginning to look exceptionally cheap.  By early 2006 the bull was up and running, fed by massive demand from the “new” markets, investment funds and private customers increasingly aware of the value, both in drinking and investment terms, of the best wines in the world.

At the same time, we were waiting for the 2005 Bordeaux vintage to be released.  We had been hearing great things almost as soon as the grapes had been picked; talk was that we would have a legend on our hands.  Trips to Bordeaux in early 2006 to taste these young legends in the making confirmed the hype - this was a truly exceptional vintage.  The wines were released slowly, at prices that we hadn’t imagined, and they sold as quickly as we could offer them - we sold 1,000 cases of Lynch-Bages on the day that it was released.  Prices continued to rise, and the boom continued into 2007.  Customers buying wine in February and March 2007 quite often found that their investments had “washed their faces” even before the invoice had been settled.

The market slowed a little in August 2007, which is nothing unusual - the majority of Bordeaux negociants take the month off and much of the wine trade follows suit.  However, the September pick up was late in arriving - some chaps with salaries larger than most of us had a bit of a problem with some bad debt.  The “credit crunch”, as the media called it (thankfully not “creditgate”) was on the front page, and stayed there.  Try to find an article on this without the words “the first run on a bank in living memory”.  The economy, or at least the financial markets, became rather nervous.

There is little or no correlation between the financial and fine wine markets, though the doom and gloom in the financial pages and on the television news did make some buyers a little more cautious.  On the surface, the wine market has remained fairly flat since.  Prices for a few wines have softened a little - though this can easily be put down to a few merchants discounting a little to get stock moving, a bit of nervous selling by small investors, and some cautious buying prices on the part of some trade buyers, some very happy to exploit the situation. 

Look beneath the surface, however, and a great deal of wine has been changing hands: there has been no shortage of trade - there is no glut of first growth claret.  Demand for the top wines remains strong, the current highlights being the 2005 vintage (still) which will be arriving in the UK over the next few months, and, as ever, there is remarkable demand for all vintages of Lafite (and the second wine, Carruades de Lafite) in the Far East. 

I personally believe that the market is having a much-needed “breather”.  How long this consolidation will last is a key question, though my thoughts are that this period represents an excellent buying opportunity for those with the conviction and the cash to make the most of it.  The fundamentals remain unchanged: fine wine is a tangible, luxury asset that more and more of us aspire to own and enjoy.  Demand is rising, and once a vintage has been harvested its supply is constantly dwindling.

On Sunday morning I did something I never thought 1) I would ever do 2) Would ever have the balls to do!

When my alarm rang at half six it dawned on me that I would be starring on LIVE BLOOMIN TV, appearing on a Wine Segment on Something for the Weekend (BBC 2), in less than 4 hours….HELP. All week I’d been playing it cool at work, pushing the nervous thoughts to the back my mind (my teacher always told me I had an ostrich-like neck for burying my head in the sand!), but I had been wonderfully prepared by Vicky (our PR Manager), and JoJo (from the show).
 
Breakfast was a non-runner, All Bran wasn’t going to help today! A nip of Highland Park 18yr old to calm me? Perhaps not! As I got to the studio my angel for the day JoJo (Food Producer) temporarily calmed my nerves, running through the segment with me a couple of times, meeting Tim, Amanda and Simon (pictured above), who were so laid back they were horizontal, like the wiley old pro’s! Well with two hours to go the nerves were back and the pressure cooker inside this young novice was about to blow!
 
Well after some makeup to hide my spots, it was into the green room and some welcome distraction. Meeting the guys from Athlete and Paddy McGuinness, all top lads and very down-to-earth, just whiling away the morning talking about the footie and the Hatton Fight which Paddy is going to and attending the after show party (fame eh!!!).
 
Well as the show rolled on it was getting closer and closer, I could hardly walk, let alone talk about wine! Then…. there was the call, “Adam to the set”!!! I will never know what nerves footballers feel when they walk out to a World Cup Final, but by gee I think I now have some idea. I propped myself by the bar and held on for dear life, the legs were doing the Elvis and then it was the count down…. on in 30…20…10…5…4…3…2…1
 
I remember the intro from Tim and then that’s it…. BANG! GONE!
 
Just one hazy blur of adrenalin!
 
Looking back now I’m pretty proud and happy I did it. I’ve watched it and know I can do far better but as a first effort I’ll give myself a C. The biggest hurdle is over, the NERVE factor, but I’m all the better for this and I’m ready for action and the next time!!!
 
Ps….At the time I didn’t notice…. but what a top wine 2004 Ch. Fonbel is, a classic St Emilion with lots of muscular young Merlot fruit, well-integrated tannins, well-balanced oak - I can understand why people have quoted it as a mini Ch. Ausone! For just £15 you get a glimpse… a feel… a vision as to what one of the greatest wines on Planet Earth has to offer. A bargain! And perfect for Christmas lunch.

Almost every day I see wonderful and increasingly rare bottles being drunk around me on the tables of the restaurants of Hong Kong, Macau (and to a slightly lesser extent, Shanghai).  To me, this is hugely encouraging – and I calm talk of a bubble in the Fine Wine market with examples of this.

To take one week, an ordinary week, as an example:  1990 Le Montrachet, DRC in magnum; 1986 Lafite Rothschild; 1982 Cheval Blanc; 1988 Petrus in double magnum; 1990 Haut-Brion; 1998 Lafite Rothschild; 1995 Margaux; 1983 Palmer and other lesser but still great bottles were drunk around me.

We could lament that the world has one less example of a masterpiece, but I prefer to think about the pleasure they bring and I am rather pleased to see them being used for the purpose for which they were designed. 

The other side of this equation does present all of us with a problem, however:  finding more of the same is increasing hard (and expensive).  When I joined the wine trade, the “great bottles” at the time being drunk we the 1947’s, 1955’s and 1959’s, with a few 1945’s popping up. 

Shouldn’t we give the 1982’s and the 1990’s similar reverence?

That the best wines have proved to be sound investments over the past few years is undeniable: one only need to look at the numbers to see that the fine wine market has been exceptionally buoyant since 2005 (the year, not the vintage) and customers who own top end 1996 & 2000 clarets will have done very well indeed. Prices for the best 2005s have also moved upward and we look forward to their physical arrival in the UK in the Spring, which should coincide with Robert Parker’s report of the wines in bottle.

The recent turmoil in the financial markets has had relatively little effect on the fine wine market. The lack of any significant crossover or correlation between the financial and fine wine markets has been well documented, and to me it’s quite simple: fine wine is a tangible asset, it is a luxury product that we aspire to own, consume and know more about. It’s much more useful than gold, and easier to enjoy than art.

Moreover, the supply of any particular vintage of, say, Margaux, is constantly diminishing and, in the case of younger vintages, is constantly improving. Is a case of 2005 Chateau Margaux worth it?

Yes, every penny and more.

Interest and demand for fine wine is growing. The price rises that we have seen for the very best, driven largely by the super-wealthy and the “new” markets of the Far East, etc, are the ones that have grabbed the headlines but it is important to note that these are not the only wines that are selling. I see no sign of this demand falling and the number of potential new wine lovers, drinkers, buyers and connoisseurs in this increasingly wealthy and sophisticated world is unbounded.

We will shortly be launching our own measure of the fine wine market - The BBR 100. This of course will be no measure of the quality, the class, the sheer beauty of the wines that will be included, but it will make for an unbiased and unemotional gauge of the market’s ups and downs.

Will the price rises that we have seen over the past two years continue?