Better late than never
Good morning Wine lovers,
Last week, I was very busy tasting some delicious wines indeed. The Masters of Wine Institute organised a tasting showcasing the 2018 vintage of the Grands Crus Classés from the Médoc, Pessac Léognan, St Emilion and the top Pomerol estates, including most of the First Growths and their Right Bank equivalents.
That was followed by a more mundane event at 67 Pall Mall. “Beatles B Sides & A List English Wines with Nelson Pari Mmus & Richard Bampfield MW” turned out to be an incredibly fun evening, where we tasted some incredible ESW accompanied by the sounds of the Sixties.
I feature some of those wines in today’s WineLeaks.
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The Market Take
📅 Week 44
Markets in a Minute
Inflation (CPI) 12-M to September:
US +8.20% / UK +8.80% / Euro +10.00%
Interest Rates (Bank Rates):
US +3.75% / UK +3.00% / Euro +1.5%
S&P 500 (5D):
Crude Oil WTI (5D):
CBOE Volatility Index VIX (5D):
US$ Index DXY (5D):
▪️What happened in the markets last week?
🇺🇸The Federal Reserve’s signals of more interest-rate increases ahead rattled financial markets anew last Thursday, sending stocks lower and driving bond yields back near multiyear highs. Powell firmly dashed Wall Street’s hopes for some relief after officials lifted the target fed-funds rate by 0.75 percentage points for the fourth straight meeting.
🇬🇧The Bank of England raised its key interest rate by 0.75 percentage points on Thursday, the largest increase since 1989, in an effort to tame surging inflation but which, by the bank’s own estimates, will help drive the U.K. economy into a recession lasting over a year.
🇪🇺Consumer prices in October were up a record 10.7% from a year earlier, exceeding economists’ expectations. The ECB raised its key interest rate to 1.5% from 0.75% Thursday as part of its anti-inflation campaign but signalled mounting concerns about economic growth, which investors took to mean it could soon ease back on rate rises. The inflation surge raises doubts about that.
🇨🇳China’s exports to the rest of the world shrank unexpectedly in October, a sign that global trade is in sharp retreat as consumers and businesses cut back spending in response to central banks’ aggressive moves to tame inflation.
The Wine Market Update
(MoM = month on month)
Livex 50 (MoM):
Livex 100 (MoM):
Livex 1000 (MoM):
▪️What happened in the fine wine markets last week?
The Liv-ex 100 was down -0.5% and the Liv-ex 50 -0.7%. But not the Liv-ex 1000, though! Why? The market segment that didn’t see a dip was the Champagne 50, once again driving the performance. The sub-index rose 2.1% in October and was the best-performing of the seven sub-indices for the fifth month in a row.
Liv-ex published a report on fine wine in Asia, taking a very grim view of China, driven by pessimism over the zero-covid policy, the weakness of the Yuan and the recent re-election of President Xi.
However, it was interesting to know the market differences: China’s obsession with Burgundy has changed the price market dynamics, while in Hong Kong Bordeaux & Burgundy go head-to-head, and Italian wines shine in Singapore and Champagne takes more than 20% of sales in Japan and South-East Asia.
Sauternes & Barsac 2018 wines
At The Masters of Wine Institute’s Grands Crus Classé 2018 vintage tasting, it was easy to get lost in the puzzling midst of the reds, and the eight sweet Sauternes may have been left for last, as an afterthought.
Diminished sales of sweet wines have been an all too real problem for growers in Sauternes and Barsac, and they have been looking to develop new dry white wines from their vineyards in Sauternes. And because people seem to have forgotten how to enjoy sweet wine, although the quality of these wines stands tall, their investment value heavily depends on the brand itself.
Château d'Yquem (the only First Growth Superieur) commands a pricing power that others simply don’t. Jane Anson charts the average prices of Sauternes wines and notes how they are heavily affected by production volumes. Also, the first growth average prices are heavily skewed by Château d'Yquem (£233 vs £35 average of most first growths). That is especially true in the latest vintages, since when Pierre Lurton announced that the new release would be held back and not released en primeur. Their 2019 vintage was released in March 2022, at a premium.
In terms of production, 2012 was an extremely difficult vintage for Sauternes, with many classified growths (including Yquem) choosing not to produce a Grand Vin. Yquem’s effect is clear: the average price drops below €40/bottle. Prices once again dropped in 2015 and 2017 following a plentiful crop being released to a market that couldn’t absorb all this production for the sweet wine areas. Small production years in 2017 and 2018 after frost led to a rise in prices for the generic Sauternes, but plentiful 2019 and 2020 saw it drop again. More recently, in 2021, the frost was brutal. It destroyed a lot of the crops and left some estates under enormous financial strain.
This is a vintage for fans of a luscious style of Sauternes.
Jane Anson notes that the vintage suffered from the same issues as did some other parts of Bordeaux: rain and mildew. Estates such as Coutet, Suduiraut and de Fargues had yields right down to 5hl/ha or less — hence the lusciousness.
2018 can’t stand up to the great vintages of Sauternes. Lisa Perrotti-Brown writes in The Wine Advocate:
The 2018 wines from Sauternes do not possess the profound botrytis signatures of a truly great vintage, nor do they have the marked acidity & freshness of the 2017s or 2016s. These are bolder, forward wines with well-defined tropical and stone fruits expressions, albeit more of a late harvest style in some cases than a textbook Sauternes. Indeed, the best wines of Sauternes and Barsac in 2018 came in as late as possible—in late October and even into early November. These wines have notably more botrytic character than the earlier harvested wines and therefore also have livelier acid profiles.
The great vintages of Sauternes in the last decade are 2014 and 2011.
Jancis Robinson on 2014:
A triumph for Sauternes in this vintage, with some botrytis in September and plenty in late October. Some observers are even calling it the best vintage since the turn of the century.
Jancis Robinson on 2011:
Where red Bordeaux failed, Sauternes triumphed in 2011, giving opulent, rich, fresh wines of excellent quality.
The 2017 vintage, along with 2001, offers quality and value, writes Liv-ex. The jury is still out on the 2017 vintage — in the article, praised perhaps by comparison with other categories for Bordeaux. On the other hand, 2001 is hailed by Jancis Robinson as “perhaps the greatest Sauternes vintage in modern times”
The fact is that Sauternes offers great value to investors — more specifically because the prices of first growth (excl. Yquem) are driven solely by yields and not so much by the secondary market or other market dynamics, the savvy investor can afford to buy top first growth châteaux from top vintages at reasonable prices.
Here’s an example:
Lafaurie-Peyraguey is a château that dates back to the 13th century — how much more glam can you ask for? They are considered one of the top 5 Sauternes châteaux and some of the on-vintages are cheaper than their lesser ones (because of the yields).
For example, 2018 now sells for £40-£45 / bottle. When compared to their 2014 vintage, £36/bottle, it’s just a no-brainer. Incidentally, 2014 is when new owner Silvio Denz of Lalique took ownership of the estate, starting with a bang. Jane Anson in Inside Bordeaux notes that “their wine has always been excellent quality, but the flavour definition has really tightened up since Denz’s team (Valerie Lavigne & Axel Marchal consult on both LP & Yquem, following Denis Dubourdiu) took full charge of winemaking; this is clearly noticeable from the 2014 vintage.” Awarding the wine a 96, she writes:
Very rich, complex wine offering lemony and smoky botrytis, melon, honeyed pineapple and apricot. Dense but suave, this is the biggest Sauternes of the year, in the typical LP style.
English Sparkling Wines
I know among you, there are many English Sparkling Wine (ESW) sceptics.
I count myself in that bracket — not necessarily as quality is concerned. I am more apprehensive about the following:
Brand track record
Brands aren’t built in a day and it takes a lot of cold hard cash invested over a sustained period of time and the right kind of investment and the right kind of winemakers and the right kind of vision and…and…and… Long story short, we don’t yet know which brands will make the right strategic moves and now we can only make an informed guess.
Quantity is a double-edged sword for the ESW. Of course, as I have discussed in the Gusbourne 51DN piece, low quantity allows English winemakers to go out with higher prices. However, I do believe that, if ESW were to be taken seriously, it should be promoted by US and Asian wine critics and should be widely available in these critical markets. If we take the example of Argentina’s Malbec, most of Malbec’s consumption was driven by internal demand up until recently. It took a considerable amount of time for Malbec to be taken seriously by foreign buyers and it’s probably still suffering from it.
Ability to age gracefully
The ability to age gracefully and for a long time is critical to its future investment value. And, because little track record is available, the investment risk increases.
On that particular last point, during the Beatles & ESW tasting at 67 Pall Mall, I had the pleasure to try Ridgeview’s 2009 Blanc de Blancs, en Magnum (£150 / magnum).
I wrote on my notes: “Magic.“
Richard Bampfield MW, who was guiding us through the tasting, decided to set the standards very high, starting the tasting with this wine. It showed all the hallmarks of a slow ageing process, still incredibly fresh on the palate and the nose. A rich texture and the biscuit notes made it oh-so seductive. Richard mentioned that he tried older vintages from the early 2000s and he found them equally vivacious and enticing. This may or may not reassure some wine collectors, but it certainly put my doubts about the ageability of ESW to rest.
I must say — I, selfishly, thought long and hard about publicising how great this 2009 Ridgeview is because Richard mentioned there are “only a few bottles“. Back to problem #2!
The other ESW on the list that had to follow such a special vintage were:
2014 Wiston Estate, Rosé (£49 / bottle)
2010 Breaky Bottom, Cuvée Koizumi Yakumu Seyval Blanc (£79 / bottle)
2018 Rosé de Saignée, Hundred Hills (£60 / bottle)
NV Gusbourne Brut Reserve, 2019 Base (£45 / bottle)
2018 Bride Valley, Blanc de Blancs (£35.95 / bottle)
A couple of estates (Breaky Bottom and Bride Valley) were a first for me. Richard Bampfield, who is a Master of Wine himself, said he tasted Breaky Bottoms blind alongside other wine experts and they all applauded it for its precision and finesse. Bride Valley, an estate in Dorset, was founded by the late Steven Spurrier, an English wine merchant in Paris. You may remember him because he went on to organise the famous (or infamous, depending on which side you are on!) Judgment of Paris Tasting of 1976, when a Chardonnay and Cabernet Sauvignon from California were ranked above some of the most prestigious wines of Burgundy and Bordeaux. Spurrier, by his admission, said that the 2018 was the first great vintage of Bride Valley — but unfortunately was only able to taste it in its infancy.
Gusbourne NV showed off all of the winemaking skills to craft a harmonious and balanced wine, even in a notoriously tricky vintage in England such as 2019.
Hundred Hill’s Saignée has such a vibrant colour. You may remember it from the Saignée blind tasting in WineLeaks #8, as it was the standout and the top-scoring wine of the line-up. The other rosé, made by Wiston (an estate known for its daring winemaking), a 2014 vintage, eight years old and “fresh like a daisy“ — or better, like a bed of roses.
All in all, I thought it was a very impressive line-up, one that showed ageing potential, incredible winemaking skills and the different personalities of ESWs. 🥂
Lastly, I wanted to check in with you on content. I am thinking of making Thursday a fixture for more in-depth pieces. Please share your opinion in the poll below or the comments!
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My investment thesis, risk appetite, and time frames are strictly my own and are significantly different from that of my readership. As such, the investments covered in this publication and in this article are not to be considered investment advice nor do they represent an offer to buy or sell securities or services, and should be regarded as information only.