Fine Wine Market Outperforming Chinese Equities
Has the ramp in Baidu (BIDU-NASDAQ) left you speechless? The market for fine wine has been on a tear that leaves Baidu in the dust. The Chinese have not really taken to wine yet, but with new millionaires being created daily it is only a matter of time until they begin to participate in the finite market that is wine. Giddyup.
Wine is a liquid market, and even allows you to participate in futures if you are so inclined. The five first growth Bordeaux estates typically produce 20,000 cases of wine in an average vintage. Seven years ago the 2000 vintage of Lafite Rothschild could have been purchased for $3,500 a case. That same wine is now selling for $18,000 case. Bottles disappear nearly every day as people open them, and the surviving wine becomes even more valuable. The only downside is fraud, as counterfeiters attempt to cash in on the game.
The fall auction season is heating up in New York, which is music to John Kapon’s ears. As director of NYC wine retailer Acker Merrall & Condit’s auction arm, next week’s $20 million “Golden Cellar” should net him several million dollars in commissions. Nice work if you can get it. As Kapon says in the auctions offering circular:
The breath of this offering is spectacular. This is literally the best of the best, both in producers and in vintages, and to try and recreate this type of collection in today’s market would near be impossible....If one were to buy wines as an investment, this would be a Warren Buffet portfolio. All these wines are not only some of the greatest tasting delicacies in the world, but they are also all investment worthy, if that matters to you. History does not lie. John Kapon
1990 Petrus Appreciation
Kapon has chronicled many of wine experiences in newsletters he has written, a taste of which you can get from perusing the ninety page book that comprises the auction. This auction is a dream for Burgundy lovers, with 4,838 bottles being offered including 223 magnums, 11 jereboams and 2 methuselahs. There are nearly 2,600 bottles of bordeaux and 128 bottles of desert wine dating back to 1795.
You can join Kapon & Co. at Le Bernardin for a pre-auction dinner October 26th, and tell him StockJockey sent you. Of course, John does not need my help, and was drumming up a little interest today on television:
“Wine prices have only gone one way, historically, and that’s up,” said John Kapon, Acker Merrall and Condit’s president and auction director. “Wine is great because you can always resell it; there will always be someone else who wants to drink it, and everyday there are less bottles available as they get consumed.”
But, wine auctioneers say, taking the risk can pay off. In recent years, the blockbuster bottles have shot up in price, and this collection, dubbed “The Man with the Golden Cellar” has some of the best-sellers.
The collection has twenty-two different vintages of Romanee Conti, as well as a 12-bottle case of 1962 Rousseau Chambertin, which is considered to be one of the best vintages of the century.
“Romanee Conti is the most expensive wine in the world - $3,000 to $4,000 a bottle on release and more expensive by the minute after that,” said Kapon.
Acker, Merrall & Condit
Auction Catalog
Why fine wine prices will keep rising
Vinfolio
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