Showing posts with label Liv-ex. Show all posts
Showing posts with label Liv-ex. Show all posts

Friday, 6 January 2012

Lafite '08 down 45% as fine wine prices fall

The value of Lafite 2008 is down 45% on last year, as 2011 fine wine prices showed their most dramatic slide since 2008. As reported on the drinks business, according to Liv-ex, prices of the 100 top-traded wines fell by an average 22.5% between June and December last year – the steepest fall since the beginning of the recession nearly four years ago. Lafite ‘08 peaked in January 2011 at £14,043 a case, but was trading this month at £8,108, while Lafite 2009 has dropped 28% in value in the last six months, from £13,831 a case in July 2011 to £9,800 in December 2011.

Year to date prices for Lafite 2008 were already down 26% last August with the wine proving the worst performer in terms of price of the last 10 physical vintages from the estate. This is in stark contrast to October 2010, when the price of Lafite ’08 shot up by 20% overnight after it was announced bottles would be marked with the Chinese symbol for the number 8, regarded as lucky in China.

Meanwhile, the Live-ex Claret Chip, consisting of Bordeaux first growths from top vintages going back to the mid-‘80s was down 26% in the second half of 2011. The second wines of the first growths have also performed poorly, with Château Margaux’s Pavillon Rouge 2008 down by nearly 50%. Carruades de Lafite 2008 fared better, but still lost 29% of its case price. Though Carruades 2005 is holding up well, selling for £3,672 in June 2011 and £3,054 last month.

Bucking the trend are top second growths like Leoville-Las-Cases and Cos d’Estournel, which have maintained their value and outperformed the falling market. Outside first growth claret the picture is slightly rosier, with Burgundy’s Domaine de la Romanee Conti, Chateau d’Yquem and Super Tuscan Sassicaia the strongest brands in 2011.

Why the change? According to WineSociete China, China’s leading organisation for wine education, it can be put down to China’s money supply. In 2009, Chinese banks made almost 10 trillion yuan in new loans, expanding the country’s loan portfolio by a third. In 2010 they lent almost 8 trillion yuan, roughly twice as much as in 2008. Trillions of yuan, formerly locked up in bank reserves, flowed into the economy, leading Chinese consumers to put their rapidly depreciating currency into hard assets like fine wine.

Last year, money supply growth and lending in China fell sharply as Beijing put the brakes on asset and consumer price inflation. As lending has declined, so have sources of credit for many of China's local and privately owned enterprises. In an attempt to generate liquidity, fine wines are quietly being offered for sale by many Chinese collectors.

Thursday, 29 December 2011

Ones to Watch in 2012

thedrinksbusiness.com brings you a quintet of rising stars set to impact upon consumer luxury wine and spirits spend in 2012.

Peter Sisseck, Age: 49

Danish-born Sisseck is the creator and owner of cult Spanish wine Pingus (from Ribera del Duero), which has been ranked as the highest scoring wine by Robert Parker for the last five years according to the Liv-ex Power 100. Parker declared Pingus’ first vintage (1995) “one of the greatest and most exciting wines I have ever tasted.” No more than 8,500 bottles of are produced each year, which sell for more than £400 a piece. Sisseck’s second wine, Flor de Pingus, is also proving popular with Parkerites. The great Dane’s uncle, Peter Vinding-Diers, transformed the quality of white Graves in the ‘80s, perhaps explaining why Sisseck has branched out to St Emilion, where he runs the biodynamic estate Château de Rocheyron.

Lady Gaga, Age: 25

The eccentric singer topped this year’s Forbes celebrity list, with an estimated net worth of US$90m. Representing the power of celebrity endorsement in the luxury wine and spirits sphere, I could have chosen a number of world-famous stars, but Gaga made the cut for being the most talked about and photographed celebrity of the moment. Often tweeting about her love of wine to her 16m Twitter followers, the Italian American songstress could start a luxury drinks trend at the drop of one of her Philip Tracey hats. She hasn’t yet, but she could.

Yao Ming, Age: 31

Last month, the Chinese NBA basketball star announced plans to release “Yao Ming” wine in China at £384 a bottle. The Shanghai-born sports star, worth more than US$65 million, has ventured into wine just months after retiring from basketball to meet a growing thirst for wine in his home country. Yao Family Wines use grapes from six vineyards in the Napa Valley, though Ming also owns a winery in Napa. The first batch of “Yao Ming” is a 2009 Napa Cabernet Sauvignon. Magnums of the wine are expected to sell for £6,000 at an upcoming charity auction in China.

Erik Lorincz, Age: 31

Last year, the Slovakian-born head bartender at the newly reopened American Bar at The Savoy, out-mixed, out-stirred and out-shook 9,000 bartenders to win the Diageo Reserve World Class Bartender of the Year competition, leading him to be dubbed “the best bartender in the world” by the Wall Street Journal. This year he was crowned International Bartender of the Year at the prestigious Tales of the Cocktail 5th Annual Spirits Awards in New Orleans. Before The American Bar, Lorincz was working his shaker at The Connaught Bar. Catch him in the capital while you still can...

Wu Fei, Age: 41

The general manager of the wine and spirits branch of COFCO, China’s largest oils and food trader, plans to aggressively expand the company’s vineyard ownership overseas on the heels of two recent purchases, with sights set on Australia and the United States. COFCO has been expanding internationally to diversify its portfolio and compete with international brands. It purchased Château Viaud in Lalande de Pomerol for US$15m in February. Fei is in charge of umbrella brand The Great Wall, China’s most famous wine brand worth €1.4 billion, which sells 120m bottles a year.

Thursday, 2 June 2011

Bordeaux wine labels in China

When bordeaux first growth Château Lafite announced that it was to feature the Chinese symbol for the figure eight on every bottle and magnum of its 2008 vintage in celebration of its new vineyard venture in China, case prices for the wine went up by nearly 20% overnight. The number eight in China is considered especially lucky, as the Chinese word for eight (ba) is similar to the word for prosperity (fa). Eight is considered so auspicious that the Beijing Olympics began at eight minutes and eight seconds past 8pm on 8 August 2008.

With less than 1% of the Chinese population (10 million) able to speak English fluently, the power of symbols as communicators cannot be underestimated. Able to transcend language, a symbol can be instantly absorbed and understood. “Symbols can be very powerful and immediate communicators in their own right,” says Roddy Kane, director of Hugo & Henry. “Take the Nike ‘tick’ – you don’t have to see the Nike name to know what the image is and, more importantly, what it stands for.”

With China now the most important market for Bordeaux – a case of Lafite ’82 sold for £70,000 at a Sotheby’s auction in Hong Kong last October – the Bordelais are taking interesting measures in a bid to get noticed in China, from renaming and repackaging to reinventing their brands. Already the darling wine of China, Lafite’s savvy decision to capitalise on Chinese interest and take a risk to enter a new market has made the 2008 vintage almost the sole preserve of Chinese buyers.

Before the announcement, a case of Lafite 2008 was trading on Liv-ex at £8,500. By lunchtime the day after, it had risen to £10,160, with some London merchants completely running out of stock. At the time, a spokesperson for Lafite said she didn’t know what impact the design decision would have on the value of Lafite ‘08 in China, though the suits at the château must have known that their astute move was marketing gold, and a red rag to the bullish Chinese market. Six months on, the wine is trading at around £15,000 a case, up almost a third in value since the initial price spike.

luck and respect

“To the Chinese, Lafite 2008 is the most prestigious gift you can give – a way of giving luck and respect to the recipient,” says Simon Staples, buying director at Berry Bros & Rudd. The London fine wine merchant is selling its remaining cases of Lafite ‘08 at £15,888. “We’ve manipulated the price a bit, but it’s seen as super-lucky for our Chinese customers,” says Staples. Was it a crass move on the part of Lafite? “No,” he says. “Lafite has shown it understands its consumer and is at the top of its game. I’m not aware of other châteaux changing their labels, but it’s going to happen. Call it the Lafite effect – we haven’t seen anything yet.”

However, not everyone is equally applauding. Kevin Shaw, founder of drinks design and packaging agency Stranger & Stranger, is more cynical about the move: “It’s marketing at its absolute crassest – an opportunistic ploy to drive up prices. The Chinese believe they can influence their fortunes with a few well-known talismen: the number eight, the colour red and the metal gold. They don't like white space because emptiness is unlucky and black reminds them of death. So good luck to them, and a big, fat, gold and red lucky eight to the Bordelais too. I’d have preferred to see Lafite spend its budget on tamper-proofing so a consumer would have a greater chance of drinking a real bottle of Lafite in China. Bordeaux has its eye on Asia these days – we’re going to see many more labels done by the Chinese printer.”

On the subject of fakes, Staples believes that the Lafite figure eight symbol could be easily faked, and will in no way protect the château from counterfeiting. Such is the demand for fake Lafite in the Far East that at a recent wine trade fair in China, people were openly selling fake Lafite – as you would Louis Vuitton handbags at a market – in a small room next to the main tasting room. But it’s not only Lafite which has got creative with its labels in a bid to curry favour with the Chinese. Château Mouton Rothschild chose Chinese artist Xu Lei, director of Beijing’s leading contemporary art museum, to design its 2008 label. Based on an ink drawing, the blue-hued label features the château’s signature ram standing on a rock between two moons.

Last January, rumours alone that a Chinese artist would be chosen for the ’08 label saw case prices rise from £1,800 to £2,200 overnight. When the news was officially announced last November, Mouton ’08 became the most traded wine on the Liv-ex exchange. “China has become a major consumer of fine wine, so it seemed a natural choice to select a Chinese artist,” explains Mouton Rothschild managing director Hervé Berland. Last year, wine design agency Barlow Doherty rebranded La Source, the top cuvée of right bank Bordeaux winery Château de Sours, with the Far East in mind. “The new gold label has gone down really well over there,” says director Abigail Pitcher. “We also created gift boxes for the château to help attract the Far East buyer.” The company has since created specific Chinese labels for both a Southern French and an Italian winery. “Bespoke labels for China are definitely on the rise, and red and gold figure heavily in the design brief. ‘Bling’ is still big out there, despite us having moved on in the West,” says Pitcher. The Chinese love of gold may explain why Château Palmer and its second wine, Alter Ego de Palmer, have done so well in the Far East. Both wines have gold labels, making them ideal business gifts.

Meanwhile, last year Margaux second growth Château Brane-Cantenac revamped its label for the 2007 vintage, simplifying the striking signature gold design, and turning the capsule from red to black and gold. According to Stephen Browett of Farr Vintners, there is a strong rumour that Margaux second growth Château Rauzan-Ségla, bought by Chanel in 1994, has commissioned Chanel creative director Karl Lagerfeld – who recently designed a trio of limited edition Diet Coke labels for Coca-Cola – to design its 2009 label. A Lagerfeld label would have immediate appeal in China – now the fastest-growing consumer of leather goods and jewellery worldwide, where Chanel is the second most lusted after luxury brand behind Louis Vuitton. “Rauzan-Ségla hasn’t been selling well in China, so a Chanel label would certainly give it a boost,” says Staples.


But getting a fashion designer or artist to create a bespoke wine label is nothing new. “With their latest antics to attract interest in Asia, the Bordelais are only doing what the Champenois have been doing for centuries,” says Jack Hibberd, research manager of Liv-ex, in reference to Champagne’s savvy hook-ups with artists and fashion designers. Since 1983, Taittinger has commissioned contemporary artists to commemorate vintage years for its Artist Collection series – both Roy Lichtenstein and Robert Rauschenberg have created signature labels for the Champagne house – while last October, Dom Pérignon released a limited run of Andy Warhol-inspired bottles with pop art-influenced red, yellow and blue labels for its 2000 vintage, designed by Central St Martins School of Art and Design students.

Another way the Bordelais are attracting the attention of the Chinese is by streamlining their second wines with their first. In a country where being seen to be drinking the right wines is crucial, the more a second wine looks like a first the better. Take Carruades de Lafite, or “baby Lafite” as it’s known in China. The label is almost identical to that of Château Lafite, differing only in the wording, while third wine Duhart-Milon’s label also bears a striking resemblance to the first growth. To the Chinese, drinking Carruades is the next best thing to drinking Lafite – “all our Carruades has gone to China. It’s been such a success because it looks so much like Lafite”, says Stephen Browett. “The Chinese want the best or the closest approximation to it. To them, drinking Carruades is drinking Lafite,” agrees Simon Staples.

In 2008, Château Haut-Brion gave its second wine a makeover, changing the name from Bahans Haut-Brion to Le Clarence de Haut-Brion, revamping the label to incorporate the château and rehousing the wine in Haut-Brion’s signature wide-shouldered bottle, making it incredibly similar to the original. Meanwhile, Château Lynch-Bages, known as Lan Chi Pat in China after a famous Cantonese opera singer, went down a similar route to Haut-Brion in 2009, changing the name of its second wine from Château Haut-Bages to Echo de Lynch-Bages, redesigning the label and tidying up the Lynch-Bages label while they were at it. Co-owner Sylvie Cazes says the rebrand has “made a big difference” in the Asian market.

ahead of the curve

One of the first châteaux to market its wine in Asia, Lynch-Bages was ahead of the curve in terms of understanding the needs of the Asian consumer. “I learnt very quickly that in order to be successful, it was essential to market wine with easy-to-pronounce names because consumers don’t often speak foreign languages,” says Lynch-Bages co-owner Jean-Michel Cazes. Most of the top châteaux have nicknames in China – Château Beychevelle, which has proved popular in Asia due to its distinctive Viking ship label, is known as “dragon boat wine”, while Calon-Ségur is called “flying dragon wine” because “tianlong” means celestial dragon in Chinese. Meanwhile, Ducru-Beaucaillou has been translated to “bao jia long”, meaning “treasure”, “good” and “dragon”.

The most successful wine packaging in Asia marries elements of Western sophistication with Chinese culture. The French are cornering the market with a culturally aware approach to marketing and an understanding of the importance of thinking locally. “The Bordelais have always been in tune with their customers, whether it be the Brits in the 19th century, or the Americans in the ’90s. They move where the demand is,” argues Liv-ex’s Jack Hibberd. But a word of warning to those looking to make over their brand for the Asian market: “Don’t underestimate the Chinese,” says Simon Staples. “They're an extremely savvy nation and any interlopers will be sussed out immediately.”

Monday, 14 March 2011

Salon '99 launched with fish 'n' chips

Salon is one of those mythical wines like Pétrus and Yquem that you usually only ever hear about other people drinking. But I got lucky last week. My editor was unable to attend the launch lunch for Salon '99, so I gallantly stepped in in his place.

Rather than a swanky, seven-course do, Corney & Barrow rather stylishly opted to host the lunch at trendy fish 'n' chip restaurant Geales in Notting Hill. I'd often heard about the brilliance of Champagne and fish 'n' chips – The Wine Society staff swear by the ritual every Friday, so was keen to try the pairing out for size.

Based in the village of Le Mesnil-sur-Oger, known for its chalk-rich soils, Salon, made from a single cru and a single grape; Chardonnay, is only released in exceptional years – just 37 vintages have been released since it was founded in 1905. The Blanc de Blancs spends 10 years ageing on the lees before disgorgment.

Salon president, the dapper, debonair Didier Depond*, introduced the wine, quipping that it was the first time he'd ever tried Salon with fish 'n' chips: “1999 was an exceptional vintage, and the resulting wine is naturally sophisticated and rich in flavour, but it’s difficult to judge its character at the moment, as it’s still only a teenager." Having already compared 1997 to Audrey Hepburn for its femininity and grace, I push Depond for a '99 comparison. "It would be a pretty boy actor, like Brad Pitt. It’s unmistakably masculine, but also beautiful and elegant."

Bottled in 2000, the '99 vintage will be disgorged in batches of 2,000 every six months. Only 50,000 bottles will be produced. Vinification is entirely in stainless steel, and there is no malolactic fermentation. The dosage is a bone-dry five grams per litre of residual sugar.

Speaking with Depond, he tells me Salon is becoming more and more of a collectors' item, and is enjoying considerable success at auction. "People are going mad for the magnums, because it’s the best size for ageing Champagne, and we only release a very small amount of them. The older vintages are selling at crazy levels in Hong Kong, London and Paris.” Salon jumped 20 places from 46 to 26 in the Liv-ex Power 100 chart last year, coming in just two places behind Krug.

So what of the combination? I thought it worked incredibly well with the battered haddock, cutting through the fat with its zesty freshness. Pale gold in colour, with small, ebullient bubbles, it had an intense citrus nose, almost like lemon drops, with accompanying notes of white flower, white fruit, and bitter almond. Light and refreshing and yet steely and direct on the palate, it had youthful lift, assured elegance and underlying purity. Contrary to Depond, I found it feminine, fragrant and perfumed – perhaps more of a Grace Kelly than a Brad Pitt.

A half case of Salon 1999 will be available through Corney & Barrow for £950 from mid-May.

*Picture of Didier Depond courtesy of Jamie Goode