Third wine for Château Margaux

Châteaux Margaux is to release a third wine onto the market this year. As reported on db.com, Margaux de Château Margaux 2009 is made from wine that didn’t make it into the estate’s second label, Pavillon Rouge. According to Margaux’s managing director Paul Pontallier, around 3,000 cases of the wine were made, with the majority coming onto the market this autumn rather than being sold en primeur. A price for the wine has yet to be decided.

Margaux de Château Margaux was created due to the favourable conditions of the 2009 vintage, which meant that the wine that didn’t make it into Pavillon Rouge was of such a high standard it merited its own bottling. Previously, the wine had been declassified and used for generic AOC Margaux. The addition of Margaux de Château Margaux to the Margaux portfolio means the estate now produces four wines, taking the AOC Margaux into account.

Like father like son: Paul and Thibault Pontallier

As for the 2012 vintage, Pontallier told me during a tasting at the château last week that the key to a successful 2012 en primeur campaign would be finding the right price point for the grand vin. “The global market is more open than it’s ever been but we need to come out at the right price point and listen to what the market wants,” he said.

Proving that it does listen to the market, last year Margaux came out at €360 a bottle for its 2011 vintage, down 40% on the €600 release price of 2010. Composed of 87% Cabernet, Pontallier describes Margaux 2012 as sharing the concentration of 2009 and superior in quality to 2011 due to its better tannic structure, freshness and softness. Pontallier believes that while 2012 Margaux is drinking well early, it is “built for the next 50 years.”

While he was pleased with the quality of Margaux’s top wine, quality was by no means uniform across the board, with more AOC Margaux made in 2012 than any previous vintage. “For us the vintage was very heterogeneous, with different levels of quality and style. For our best terroirs, it was an outstanding vintage for Cabernet, but it didn’t ripen well in the lesser terroirs in the region,” he said. 

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.