For example, Gruaud Larose and Giscours did not do well with some importers. The vintages are up 68 percent and 43 percent, respectively, on the 2008 varieties – numbers that could prove to be too elevated for the US market to bear, especially considering the score and image of these two wines in parts of the industry.

Still, there is hope that the strengthening US dollar could help the situation, as no one can deny that it is an amazing vintage. In fact, the 2009 Duhart Milon and Gazin wines have actually sold out in San Francisco, and St. Emilion’s Barde Haut has come close in recent weeks. In addition, it is expected that US buyers who invested heavily in 2008 Bordeaux vintages will still purchase some quantity of the 2009, but how much is still virtually anyone’s guess.

Regardless of what happens, it has become clear that some chateau representatives are a bit nervous about the possibility of alienating traditional markets like the US. They and a number of other experts are cautioning the chateau to consider a wider picture than the Asian market, which could prove to be fickle and at the very least does not have the strong ties and long relationship that exists with the established markets.

The industry is aware that Bordeaux 2009 is an exceptional vintage, which could account for why some of the wines that rated well at the April en primeur tastings have already sold out. For example, the popular New York retailer Sherry-Lehmann Wine & Spirits has already sold out of La Fleur-Petrus at $135 per bottle, chateaux d’Angludet at $30 per bottle and Duhart-Milon Rothschild at $60 per bottle.

Also of note, many wine industry experts are predicting that the biggest names will announce the highest prices ever when they are released. This is due to the fact that most of the labels this year have show between a 5 and 70 percent increase over the previous, much-loved 2005 vintage. Although many of these wines have been able to garner attention despite their high prices, some experts feel that a portion of these wines could be overpriced.

Economic woes have also been a major concern throughout the industry, but many UK buyers do not seem to be affected. In fact, London merchant Berry Bros & Rudd reportedly received so many orders for Chateau du Tertre at $384 a case that its computer system malfunctioned, and ultimately sold out 700 cases in just one hour.

While the US market has been decidedly lukewarm so far, many Asian parties are getting into futures with the 2009 vintage. This has prompted some London merchants to offer translations of tasting notes in Chinese, and some estimates are predicting that Asian orders will account for up to one third of the total futures’ sales. Although this number is high, it still wouldn’t be enough to carry the vintage if other countries avoid purchasing due to price – a simple fact that could provide a cap of sorts to the price of Bordeaux 2009

For example, this is the first time the fine wine industry has witnessed the short selling of wine, a development that has received mixed reviews, with some seeing it as a natural progression in efforts to develop fine wine as a highly regarded asset class. Furthermore, wine merchants tend to dislike this practice the most, since it tends to cause chateaux to increase release prices, and merchants have to deal more directly with the clients.

On the other hand, some industry veterans believe the short sales will not actually affect the release prices, while still others point out that short sales are very common investment vehicles outside of the fine wine industry, and that they could be key to price recovery in the market. Regardless, Liv-ex claims that all trades will be fulfilled and that their en primeur supply is secured by bank guarantees with limits in place for all suppliers.

Although several of the top chateaux have released some initial prices, including Lafite and Mouton, the quantities have still remained quite small, leaving many merchants to wonder what their actual allocations will be and how much they will ultimately cost. In fact, many industry experts have noted that it can be a challenge to procure a significant quantity of the first growths, a fact that has caused much attention to fall on the second tranches, which will be offered in the very near future.

This fact alone has been enough to make some industry leaders note that it seems as though the high prices of the Bordeaux 2009 first tranche were little more than a publicity stunt, and may not provide much of a real indication about the actual final prices. Still, since May of 2010, Liv-ex has already sold 16 cases of Lafite 2009 for €10,000 – €13,232 per case, and a case of Latour sold recently for €10,213.

Regardless, many top merchants will not publicize prices for the First Growths until they have observed the prices and quantities of both the second and third tranches. This will allow them to get a real feel for their true cost averages, and in some cases it could even provide an indication of future availability and its possible effects. In addition, it is important to note that allocations of First Growths have been declining for years, regardless of demand by consumers and investors.

This year, many merchants are reporting steady sales and most expect to have little trouble selling Bordeaux 2009. So far, other expensive wines have experienced robust sales in many markets, leading merchants to believe that Bordeaux 2009 will be no exception.

NICE wants to use the measure in conjunction with a number of other restrictions to reduce alcohol-related deaths in the UK, but in addition to questioning its legality, the WSTA argues that it won’t stop determined drinkers. In fact, minimum pricing could instead increase the burden on the wine industry and everyone who drinks wine, while failing to address the ever-present issue of problem drinking. In fact, evidence shows that individuals with a drinking problem will often go to almost any length to get alcohol.

Instead of minimum pricing for alcohol, the WSTA has been supportive of efforts to carry out intensive early education about the dangers of alcohol abuse. When people fully understand the risks, they are often less likely to overindulge in any substance, including alcohol. In addition, many opponents of the minimum pricing measure have pointed out that prohibition has never worked – just look at American history during the 1930s! Other measures, including education and perhaps even a ban on loss-leading promotions, could potentially be much more effective in combating alcohol abuse than monetary penalties.

In addition, some fine wine investment houses have changed their approach in lieu of this year’s price increases, since it could result a low three to five year return or even a loss, in the event of an Asian correction. Also, some buyers expect prices to drop once the current frenzy subsides, which would be a game-changer for investors worldwide. As a result, some merchants are cautioning buyers against purchasing certain wines at the current high prices. For example, although the Sociando Mallet 2009 is arguably the best wine they have ever produced and has been very well-received by critics this year, some investors are opting to purchase the 2008 vintage instead, believing that it provides a better value for connoisseurs of this classic Bordeaux.

The enormous interest among Chinese traders in 2009 Bordeaux has contributed to fraudulent trading on the Chinese mainland, ultimately prompting the UK’s Wine & Spirit Trade Association (WSTA) to issue a new list of precautionary recommendations for fine wine investors. This, combined with recent probes by law enforcement officials, has worked to fuel fears surrounding the scam among potential investors.

Initially, the fraudulent trade was discovered because several private investors were persuaded to invest in the purchase of top Bordeaux 2009s, even though they have not yet been released by the chateaux and the prices have not been established. Unfortunately, the largely unregulated and sometimes uneducated nature of the fine wine investment market can leave it more vulnerable to fraud than some other investment vehicles, but many savvy investors felt little surprise upon hearing of the recent scam. In addition, it is widely believed that this kind of criminal behavior is unlikely to stop immediately, since access to top vintages like 2009 Bordeaux remains quite new in China.

The good news is that investors can take precautions to avoid the risk of fraudulent purchases. According to the WSTA, it is imperative to consider the size and reputation of the wine merchant, for example, and also to be certain that all invoices and statements clearly state your claim to the wine. In addition, ask the merchant if they can provide insurance or other guarantees, and do a bit of research to check that prices are in line with market norms and that delivery is included. Keep in mind that honest merchants and wine brokers will not balk at proving their legitimacy. And, as always, if it sounds too good to be true, it probably is! So don’t be afraid to ask tough questions and never hand over money until you feel satisfied with the relationship.

The fund expects wine indices to grow by 18 per cent this year, stoked by demand from the rising middle-class in China. Sotheby’s sold all of the 840 lots at its Hong Kong auction to hit a record-breaking $6.8 million (£4.4m) in a day, the fund said.

The wine market in the United States also showed some signs of recovery, the fund said, with a sell-out auction in Chicago.

Wine Investment Fund director Andrew della Casa said: “It is good news that the US market is recovering, but we suspect that, once the Chinese new year effect wears off, there could be better buying opportunities than were available in January when well-priced stock was quite scarce.”

The story of Château Lafite over the last three years has given collectors and investors alike an early insight into the impact that the Far East can have on the fine wine market as a whole.

The “whys and wherefores” of how the Lafite brand has managed so successfully to capture the imagination of the Chinese business elite remain subject to inventive speculation. The effect that this has had on Lafite valuations, however, are beyond doubt and plain for all to see. The analysis is based on standard in-bond (SIB) cases of wine, ie original wooden cases of 12×75cl held in bonded warehouses. In 2001, the Lafite 1982 traded at a 15% discount to the Mouton 1982. At £21,000 SIB today the Lafite 1982 trades at a 200% premium to its Mouton cousin from the same vintage. Similarly, at the start of the decade Lafite 1996 and Château Margaux 1996 traded at parity, about £1,900 SIB. At £6,500 SIB the Lafite 1996 now trades at a 50% premium. It is the same story with Lafite 2000 and Margaux 2000.

One of the key points to take from this is that the consequences, certainly in terms of existing vintages, are practically irreversible; due to the greater actual physical consumption in China of the various released Lafite vintages, the supply of Lafite stock for these vintages is decreasing faster than that of its peers. In effect, the Chinese love affair with the brand is decreasing the length of time an investor needs to hold the wine before increasing scarcity value becomes relevant. This rings true even with younger vintages like 1996 and 2000, which are already being consumed.

Other brands will follow suit. Château Lynch Bages, by classification a fifth growth but in reality a “super-second” growth, is already beginning to make a name for itself in China. Mouton itself, the worst performing first growth over the last three years, may well benefit from its association with Lafite. It is our strong conviction that in time the whole market will benefit from the growing culture of fine wine appreciation in the Far East, predominantly represented by the grand cru classé reds of Bordeaux. Clearly the three Lafite vintages we have used in the examples here have performed exceptionally well since 2001, averaging a 22% compound annual growth rate (CAGR).

It is worth noting that the CAGR of the comparators (Mouton ‘82, Margaux ‘96 and Margaux 2000), although not quite as good, are still all in very healthy positive territory, and this takes into account the sharp correction experienced in the second half of 2008. Over the same period the MSCI World Equity Index has a negative CAGR of -3%.

Miles Davis, 18.03.10

According to a number of major merchants, Asian fine wine investors, collectors and consumers are expected to buy into Bordeaux 2009 in record numbers for the first time in history, much like American wine connoisseurs bought into the 1982 variety. While Asian investors have previously been more attracted to buying in-bottle versus pre-paying for wines, this trend is widely expected to change this year, despite widespread projections regarding the high prices of Bordeaux 2009.

In addition, interest among Asian investors in Bordeaux 2009 will most likely continue beyond the most celebrated first and second growths, according to many top managing directors and proprietors. This thinking centers around the fact that if Asians are captivated with this vintage enough to buy the top growths, the attraction will most likely extend to encompass successive offerings as well.

This year several respected wine merchants have already reported up to a 60 percent increase in the number of wish lists they have received from China’s mainland compared to last year. This fact alone has helped to make the level of interest among Asian investors a truly unprecedented phenomenon in the world of fine wine investment. In fact, in addition to the premier first growths, a number of Chateaux including Cos, the Pichons, Lascases, Pontet and Palmer have also received extraordinary attention this year. Also of note, additional Asian interest in the iconic right bank wines has extended beyond the usual Le Pin, Angelus, Petrus and Cheval Blanc to also include Pavie, L’Eglise Clinet, Figeac and Conseillante.

While this increased demand will be a good thing for the first and second growths, many experts and savvy investors are concerned about the effect it could have on successive offerings. If prices for initial Bordeaux 2009 soar too high, the campaign could potentially lose steam after the first growths.