A real buzz surrounded the release of Mouton Rothschild’s 2014 vintage on 28th April – not least because the opening price is lower than any other physical vintage of Mouton’s. At only a few pounds per bottle more than the 2013 , which is also still in barrel, it’s exciting news, and offers some hope following the recent murmurings that En Primeur would cease to exist if no enthusiasm could be generated about this year’s campaign.
If you are new to wine investment, you might feel slightly uneasy about the recent high profile cases of alleged wine fraud, such as the recent press articles surrounding a fellow named Rudy Kurniawan. Increasingly the industry is becoming distrustful of collections that seem to appear from nowhere without explanation, and experts don’t like to think that they have been deceived about the contents of the bottle – it makes a mockery of the fine wine industry.
Kurniawan’s case is certainly not the first to make investors nervous – Benjamin Wallace’s book ‘The Billionaire’s Vinegar’ depicts the story of Hardy Rodenstock, a German collector that is thought to have not just duped the wealthy collectors that purchased bottles from him but also expert wine tasters. With all the uneasiness that comes with cases of fraud, how concerned should the everyday investor be that they might fall victim?
Investing in wine involves a considerable financial commitment and the sensible investor will want to get it right from the start, so with any luck, the concept of ‘bottle provenance’ won’t be new to them. Provenance is the traceable history of the bottle and its contents. It ought to show that the bottle can be traced all the way from the winery in which it was made to its current location, and all the while it ought to have been cellared securely, and in optimal conditions of humidity, light, temperature and away from harmful vibrations, in order for it to be in good condition to drink when the time comes. This isn’t as complicated as it sounds, any decent wine cellarage facility will be able to provide evidence of the proper care of the wines cellared there including their secure transportation to and from other facilities as the wine changes hands.
Stumbling across a collection of wine
What we’ve lost though is the romantic notion of stumbling across a collection of amazing wines – anyone that has tasted wines from Kurniawan’s or Rodenstock’s collection will be forever taunted by the possibility that the ‘fine wines’ they were drinking were in fact nothing of the sort. It is reported that there is a substantial black market for empty bottles of First Growth Bordeaux wines, which has led to them being ritually smashed after tastings and even in restaurants in China to ensure they are not recycled for wine fraud.
Should the investor be worried? Well, if you work with an ethical wine investment business, you’ll be in good hands, as they know the risks to them as well as to you of dealing in bottles whose history can’t be traced. With all eyes on Kurniawan’s case and the film version of ‘The Billionaire’s Vinegar’ in development, frankly it isn’t a risk worth taking. But you should still be prudent, and keep provenance at the centre of your thoughts – don’t be taken in by collections of wine that seem to appear from nowhere, as all may not be what it seems.
At the London based independent brokerage BWC Management & Consulting, it is all about the quest to explore the finer things in life. We believe that the delicate balance that a top quality wine brings to the palate, when correctly combined with culinary fare, is a voyage everybody should regularly embark on. Wine is not only a flavour enhancer, but also an excellent alternative investment and an age old art form. To harness the full potential of this exquisite liquid, it is important to be aware of the social decorum attached to tasting and drinking wine – and also to know a bit more about the wines and how to successfully pair it with food.
It is not Just About Swirling and Sniffing
Wine can be enjoyed in many different ways but most commonly as an aperitif, at the table during a meal or as an end to a meal to provide a sweet closure. Temperature is the first consideration and a good rule of thumb is to serve red wine at 18C and white wine at 11C. Depending on the age of the wine, it should be decanted between 30 minutes and an hour before being served. This allows the wine to breathe and improves the flavour and aroma. Red wines in particular are enhanced with aeration. Use a stemmed glass to keep the temperature stable, enjoy the bouquet and finally savour the taste. The fundamental food and wine pairing rules are: red with meat and white with fish, and the heavier the meal, the more robust the wine should be.
The full-bodied, earthy and spicy flavour of a quality Shiraz is ideal with red meat and hearty stews and the celebrated Cabernet Sauvignon can be similarly matched with stronger flavours. Merlot is softer and more flexible when paired with food. This wine’s signature ’round’ taste makes it easy to drink with a large variety of dishes. The complexity that Pinot Noir offers is particularly well matched with chicken, lamb and salmon.
Versatile and balanced, Riesling increases in intensity with age and complements most chicken and fish dishes. Spicy food is particularly enhanced with the fruity flavour of Gewürztraminer and the wider-bodied Chardonnay is ideal with flavourful seafood dishes like smoked fish. Young Chardonnay suits Italian dishes and the older and smoother Chardonnay is better suited to being enjoyed with strong flavours like mature cheese. The crisp elegance of Sauvignon Blanc is a distinguished accompaniment to even the most delicate fish dishes, while also being suitable to poultry and light meals like salads.
To end it all
In conclusion, a good dessert wine brings the journey of flavours full circle. It appeases the senses and leaves the diner ready for yet another taste adventure, made particularly enjoyable by having the right wine as travel companion.
Not all wines are created equal. There are some excellent vintages that seem heavenly, and there are others that you might be embarrassed to put on your dinner table. And there are many varieties in between. Unless you are well versed in the aromas and fragrances expected from each fine wine, it can be quite complicated to narrow down your selection. If you are buying for investment rather than for your own table, it can be even riskier. Besides wine merchants to help you make that choice, you can also take a look at the winners of important wine competitions.
International Wine Competitions
A wine competition is a great way to become acquainted with new wines and to see how the experts rate them. Some of the large wine competitions insist on blind tasting, where the name of the wine and the location of its production is withheld. Others wine tastings might give the panel of judges a clue about the region or origins of the wine they are critiquing.
Choosing a Winner
Whatever the protocol, pay close attention to the winners of the competition. At the end of the day, when the tasting is finished and the votes are tallied, you will know which wines were deemed as excellent choices by the professionals in the wine industry. By looking at the lists and scores, you will be privy to not only their favorite wine choices, but also the winery that produced them. If you are in the market to make a purchase, you should feel confident in choosing any one of the medal winning wines.
From a different angle, if you happen to own a few cases of wine that the critics positively reviewed, or was deemed worthy of a medal, you can expect peeked interest in your stock. Sell now for a nice profit on your investment or wait until demand outweighs available stock.
Carruades de Lafite set a high record for the year when seventy-two bottles of the 2012 vintage were purchased for 1,040 pounds. This sale brought the price for the wine up 3pc from its trading price in September and 5pc up from its May price. That sale caught the attention of serious wine investors, and for good reason. As a second wine from the prestigious Chateau Lafite-Rothschild, Carruades de Lafite is an excellent choice for wine investors who are looking for something other than first growths. Compared to the main wine being produced at Lafite, it is about one-third less in price.
The Lafite-Rothschild estate is situated on the Gironde’s left bank in the region of Pauillac and is known to produce some of the highest priced wines of the area. Baron James de Rothschild, who was responsible for the family’s French branch, bought Chateau Lafite in August 1868. A short three months later he passed away, leaving the Lafite estate joint property of his three sons. At that time, the estate consisted of 74 hectares of vineyards. Today the vineyards are owned by Domaines Barons de Rothschild (Lafite) and are controlled by the Rothschild family.
Best Practices in Wine Production
Chateau Lafite-Rothschild now has in excess of 100 hectares that are all planted with the red grape vines. From 80-95pc of the estate’s main wine consists of Cabernet Sauvignon followed by 5-20pc of Merlot. Smaller portions of Petit Verdot and Cabernet Franc are also used. Besides the excellent wine, the chateau has made a name for itself by adhering to its own two philosophies. The first one is humbleness in learning. They understand that fine wine is the result of many years of hard work to make excellent soil. The second point is setting the highest quality standards and living up to them. While using only the best proven practices, they are constantly looking for areas to improve.
Characteristics of Carruades de Lafite
The name originates from the Carruades plateau, which were plots near the best vineyards and were bought by the chateau in 1945. Although the characteristics of Carruades is typical of any fine wine, it gains its own personality through the composition that includes more Merlot. Annual production ranges from 20,000 to 30,000 cases.
The nature of the tax structure is a huge incentive when investing in fine wine and is one of the reasons that those investments are continually on the rise. According to “Liquid Assets,” published in the NewStatesman, a solid wine investment offers an affordable entry point, which of course is different for every investor. It should also represent sustainable growth in every aspect of the transaction, which includes the retail market, wine consumption and going to auction, which is extremely desirable in the wine market. Additionally, the wine investment should provide a straightforward but flexible and optimised exit plan. With all of these criteria fulfilled, the investor can expect profits exceeding the averages and possibly going way beyond.
Protecting Your Wine Investment
Wine merchants and brokers emphasize that once the wine is purchased it must be stored in bonded warehouses that are regulated by the government. When this is done, the wine will maintain its provenance and meet the qualifications for a purchases that is free of VAT and duties. Besides the monetary value, the specialised wine storage facilities also have the optimum temperature and environment for storing wine until it achieves the ideal maturity and is ready for market.
Wine as a Tax Free Wasting Asset
When the wine is ready, it can be sold according to HMRC’s wasting assets, which will be largely without payment of capital gains taxes. This can be read on Tax Bulletin 42 entitled “Wine and Spirits: The Capital Gains Tax Treatment.” According to the bulletin, a wasting asset is considered to be one with a predictable life span, referring to the time of purchase, of not more than 50 years. If the investor does want to sell a bottle of wine following the 50-year cutoff, it may still be considered tax free if the selling price for the bottle does not exceed £6,000.
So whether you’re a wine connoisseur or a savvy investor, there are great profits to be realised in wine investment.