An interesting chart was posted by the London Vintners exchange this morning, I just had to send you a copy. This is a chart of the percentage increases for the 2015 vintages in comparison to the 2014 vintages.
I sent you last week the actual percentages for the first growths which showed massive price increases, but this chart gives you a broader picture so you can see not just the first growths but how the other chateaux have increased their prices to crazy levels. Clearly they had a plan, and that plan looks more obvious now than before.
Firstly, the en primeur campaigns for the last 4 years were a disaster, and there is a large amount of stock sitting in Bordeaux unsold. People lost money in the en primeur campaigns between 2011 and 2014. I didn’t buy any of them, nor did I recommend any to you! They didn’t sell because the market was in a downtrend. Prices had been over inflated and the market was struggling.
But lets say that the market is NOW of the view that these vintages NOW look cheap and we are in the beginning of a rising market then hey presto! The Chateaux have an opportunity to sell them and it’s exactly what is happening, merchants are busy pushing these vintages from 2011 to 2014 which they believe look cheap compared to the latest vintage release. Simply put, they released the 2015 vintages so high that it made the last 4 years vintages look far cheaper than before, or rather not so expensive.
What does this mean for us as investors?
We know that the Chateaux will not lower their prices, they can afford to hold and not sell as much of their latest vintages. And if they now see improved sales in the recent vintages then this sounds like the Chateaux are capitalising on the market growth. And with the pound now so low it’s fueled the wine market even further… Makes you wonder if they knew in advance about the Brexit! Or was it a Rothschild plan all along… |
