June 2013 Wine Investment Report
Three more properties in Bordeaux have been bought by Asian Investors. One of the buyers is a Singaporean and two others from mainland China. A real estate agent in Bordeaux said that Chinese investors buying Bordeaux Chateau are on one a month this year. With investors from Asia on a buying spree for properties in Bordeaux this will certainly increase market awareness across the Asian markets for French wines.
Having said that there has been a shift in interest on the drinking side for high end Bordeaux Wines. The market has been slow to pick up after the recent En Primeur campaign for the 2012 wines. Prices on the en Primeur campaign for the recent 2012 wines were much lower than 2011 wines by about 30% but the complaint coming from China is they lost too much in the 2010 En Primeur campaign when prices were sold for crazy prices during the En Primeur and then dropped sharply after.
We have been recommending some different wines in the past six months and we changed our strategy late last year. We’ve found a few very good first growth recommendations but we have only been recommending first growths when the price is really competitive or we see it is down from its previous highs in 2008 when the global economy collapsed and a lot of the fine wine prices dropped.
Any first growths we recommend at the moment are a long term investment. We don’t see prices dropping in the first growth market but we don’t see them going up sharply either. As a long term investment if your looking for something to put away to leave for your children then high end Bordeaux wines are a good bet at the moment as they should remain very stable and give you a solid return over a five to ten year period.
Some of the wines we have recommended such as wines from the Rhone Valley and some lower priced Burgundy have been doing very well for us and we are going to continue with these recommendations for the coming months until we see activity coming back in the high end Bordeaux Wines. The case price of some of these recommendations is very affordable so my advice is to buy more than your usual number of cases when I recommend them to you because I don’t think they are going to stay at these prices for very long.
For example In the last three months we have recommended wines like Chateau Hermitage at 1180 Pounds a case which is on the market for 1250 Pounds that’s an increase of 6% and Chateau Beausejour Duffau Lagarrosse we recommended at 2480 Pounds that is currently 2800 Pounds/case which is up 13%.
Another interesting factor which is affecting the market is Champagne producers have won geographical protection from China which means that makers of sparkling wines in China will not be allowed to label their sparkling wine Champagne in China. This presents an opportunity for some return on investment for Champagne which is a fast growing market currently in China. It is law around the world that you can only put Champagne on a wine label when it has been produced in the region of Champagne in France and China was one of the country’s which did not follow this Law. It is a great result for Champagne producers and definitely an opportunity for us as Investors.
