WineLeaks #6
All about Saint-Emilion looming reclassification; a blind tasting; Figeac & Canon market performances in light of it. The collapse of EUR/USD.
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Wine Reports
🔴“St-Emilion: Worthy candidates for classification promotion“ (Decanter) ($)
The most awaited event on the fine wine calendar is the St-Emilion classification’s potentially controversial revision in September.
Key information:
Figeac and Canon are the two potentials for an upgrade from 1er Grand Cru Classe (1erGCC) B to the highest ranking of A.
2022 edition stipulates that performance in blind tastings by an independent panel counts for 50% of the overall grade for those vying for 1erGCC, compared to just 30% previously. Reputation, such as media coverage, counts for 35% (😲) of the tally, with 10% for terroir quality and 5% for winemaking techniques.
A minimum score of 14 out of 20 is required to be GCC, and 16 out of 20 to achieve 1erGCC. Obtaining the top ‘A’ level is ‘based on exceptional wine ageing ability and reputation, as determined by the commission’.
Panos Kakaviatos put together a list of the estates that could fit the bill for a potential upgrade.
🔴“Blind tasting Saint-Emilion Superstars“ (Jeannie Cho Lee MW Official WeChat)
In light of this re-classification, I thought it would be interesting to take a look at the results of the “longest-ever (blind) tasting“ of Saint-Emilion Superstars (in the words of Jancis Robinson). Although for a quite different reason — “the purpose of our tasting marathon” writes Jancis Robinson on the FT ”was to compare Quintus (owned by Prince Robert of Luxembourg — the host of the event) with the most celebrated wines of St-Emilion — Cheval Blanc, Figeac, Ausone, Pavie and Angélus”, I believe the results are quite telling.
On May 31, Jeannie Cho Lee, Jancis Robinson and other wine experts (Jeff Leve, Jamie Ritchie, Stuart Pigott, Jane Anson, and Alexandre Ma among others) were invited to a blind wine tasting of Saint-Emilion wines.
6 wines: Cheval Blanc, Ausone, Pavie, Angélus, Figeac and Quintus / flight
8 flights: the same 6 wines were tasted by vintage (2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2018)
The scores both about the vintages and the wines were aggregated to create the experts’ average.
Results:
The top vintage was 2016 (followed by 2015 and 2018). Cho Lee notes that 2017 and 2011 weren’t on par with the top 3, but there were some balanced wines.
Worst vintage (by a wide margin) — 2013.
Figeac 2016 had the highest score among all 48 wines tasted (beating Ausone & Cheval Blanc from the same vintage). Cho Lee’s favourite Figeac was the 2018.
Ausone suffered from vintage variability (esp. in 2011 & 2013), while Figeac and Cheval Blanc were very consistent. Robinson agrees on Ausone.
Quintus positively surprised with their 2016 and 2015 placing in the top 10.
Robinson was particularly critical of Pavie 2011, as “the owner Gérard Perse pursued a policy for many years of making a wine that was as concentrated, tough and exaggerated as possible”.
The Market Talk
🔴“Prices for Figeac have risen more than for Canon but the 2013 vintage has been a top performer across both estates.“ (Liv-Ex)
Liv-ex published a report on the market performance of the two châteaux, ahead of the re-classification.
The most traded names are the 1erGCC A — as expected; however, Figeac follows closely.
Key insights:
Prices for Figeac have (on average) risen more than they have for Canon.
Over the past three years, Figeac is up 47.1%, while Canon has risen 13.6%.
The real question is: will Figeac and Canon prices of old vintages increase dramatically — should they be reclassified as 1erGCC A?
Cult Wines thinks so. “An upgrade would certainly lead to higher prices as was the case when Château Angelus and Château Pavie attained Classé A status in 2012.”
Other insights from the 2012 classification:
Angelus’s EP price went from £1,470 in 2011 (12x75cl) to £2,000 for the 2012 vintage while Château Pavie’s EP price rose by 66% from 2011 to 2012.
Back vintages of the two wines also saw price appreciation at the time of the upgrade.
The upgrade effect may be greater on wines previously overlooked by the market than on those already enjoying strong demand due to high scores, such as ”the 2007 Angelus (92 points) price spiked by over 50% in the three years after 2012 whereas the 2005 (100 points) and 2010 (99 points) rose by 11% and 9% respectively”.
Cult Wines also believes the withdrawal from the classification will unlikely negatively impact Ausone and Cheval Blanc.
Demotions will be tricky. Demoted châteaux will no doubt consider suing the St-Emilion Classification (see 2006 and 2012), which, I am sure, the Institut National des Appellations d'Origine (INAO) is well aware of. (Please let me know in the comments below who, in your opinion, will be demoted!)
Lastly, I’m keeping an eye on the other potential upgrades mentioned above, namely Château Rochebelle, Château Fonplégade and Château Fleur Cardinale.
🔴“Who benefits from a weaker euro?“ (Bloomberg)
In other news, EUR is weakening against the dollar. Technically not quite on parity yet, but.
First — why is this happening?
From Bloomberg: “Europe suffers most from the war, which has sparked an energy crisis and could lead to potentially a long and deep recession. That places the ECB in a difficult position —trying to curb inflation and cushion a slowing economy as it aims to raise borrowing costs for the first time since 2011. At the same time, the US Federal Reserve is raising interest rates much faster than the 19-nation euro area […]”
Yields on US Treasury bonds are higher than those on Europe’s debt, driving investors to the dollar and away from the euro. “What’s more, the greenback benefits from its status as a haven, meaning that as the war drags on and the fallout gets worse, the euro keeps sliding.”
Who benefits from a weaker euro?
On a broader level, the euro’s weakness against the dollar helps European exporters as it makes their products more competitive and boosts earnings.
Fine wine currently looks a lot cheaper in the eyes of USD-based buyers.
As is the case in other markets, demand for fine wine (and its price) is in part driven by favourable exchange rates with merchants across the globe trading in multiple currencies.
The Americas account for more than 30% of sales of fine wines, and if USD-based buyers took advantage of the sudden weakening of EUR, it could lead to a significant rise in demand from across the world and a subsequent increase in fine wine prices.
Events
🔴Few events are starting to pop up as the wine world gets back from holiday.
Interesting Reads
🔴“What is 'Grower Champagne'?“ (Six Atmospheres)
Finally the answer to the question!
This is a great substack written by Tom Hewson, a musician & (traditional method) sparkling wine writer for Tim Atkins.
🔴“A rundown of the wines and what I thought they were at the time. Blind. In Exam Conditions.“ (dnkrby wine club newsletter)
If you are interested in reading, cheering on (and perhaps supporting) Dan Kirby through his Master of Wine journey, you can find his dnkrby wine club newsletter here.
It was quite enjoyable (yet somewhat painful) reading him going through the published answers of the Stage 1 assessment against his own answers.
Stay strong 💪
Until next Monday,
In the mood for wine (a.k.a. Sara Danese)
Liv-Ex reports the impact of the withdrawal of Cheval Blanc, Ausone and Angélus from the Saint-Émilion classification: https://www.liv-ex.com/2022/08/impact-cheval-blanc-ausone-angelus-withdrawal-saint-emilion-classification/
Controversial - but I am thinking Pavie might be declassified?