Many experts in the realm of alternative investments agree that there are really only three ways to deal with rapid price fluctuations in the fine wine market: either be dedicated to weathering the storm, start to drink from the bottles, or buy more to take advantage of the low prices. Those who have put some hard-earned money into fine wine investment may have seen bad times in the last quarter of 2008, but the prices rapidly picked up again in the first quarter of the following year.

According to experts, now is the best time for collectors to invest in fine wine, in part because it will give them a chance to fill in any expensive gaps. After the major corrections were made in 2008 and again this year, the biggest names in the wine industry were affected, particularly those that belong to the first growth Bordeaux category. Examples of such wines include Lafite, Latour, Mouton Rothschild and Chateau Margaux, among others.

To further support this stance, Charles Curtis, who is in charge of Christie’s wine department in North America, has recently said that now is a very good time to purchase fine wine. In fact, he mentioned that now is the best time in the entire last ten-years. Today, many people have become eager to take a part in fine wine as an alternative investment. The current market has brought unprecedented access to such alternative investments these days, and even ordinary people who do not have millions or billions to spend now have a chance to experience the fine wine market.

Aside from the ever-increasing prices of fine wine, another advantage for collectors who are interested in buying fine wine today comes with the ready availability of many sought-after vintages. Even if the cost of investment-grade wine still ranges in the hundreds to tens of thousands of pounds for each bottle, the exquisite flavour of the most popular vintages is virtually guaranteed to make the wine a highly prized drink, with many of the wealthiest collectors buying fine wines for consumption instead of investment purposes.

In another good example, consider Aubrey K. McClendon, Chesapeake Energy Corporation’s chief executive. A 2009 auction brought nearly $9 million dollars for his fine wine collection of more than 9,000 bottles, when he decided to sell the entire lot in response to a cash crisis. The sale was done in two parts; half in New York last March, and the other half in Hong Kong during the following month. The presale estimate was only $5 million, but McClendon actually came out well above the expected sale price for his fine wine investments.

China’s Shandong province will make an appearance in the film when the team travels there to document the majority of large Chinese and western wine producers. For example, Chateau Lafite, the leading fine wine in current Chinese markets, owns 25ha of vineyards in the province, and there are approximately 10,000ha of vines planted throughout the entire region.

“We want to capture the scent and voice of Bordeaux; its wines, its people, and those that follow its progress with such energetic passion,” stated Caillard. As a result, the upcoming film is already eagerly anticipated by fine wine investors and connoisseurs from around the world.

Warwick Ross, one of the film’s directors, says he wants to explore “the idea of a Chinese bubble – if there is one – and how far it can go.” This exploration will undoubtedly shed some light on the fast-growing Chinese fine wine market that has been sending case prices soaring every month.

David Roach will be directing the film with Ross. In the past, the pair have worked together to produce other successful Australian films, such as “Beneath Hill 60,” “Young Einstein,” “Reckless Mr. Kelly,” and “Mr. Accident.”

A survey was conducted in order to determine the reputation of various French wines. The survey interviewed more than 6,000 consumers across seven European countries. Some wine regions, like Bordeaux, were found to have a very high reputation. This great reputation attracts many new consumers, and as a result members can increase their prices due to the perceived high quality of the wines. A great reputation is also thought to provide incentives for wine agents to maximize their efforts, which is great for the entire brand. Additionally, regional reputations were found to encourage cooperation among the component wineries for price fixing, producing high quality products and erecting barriers to competition.

The study discovered that the leaders accrue significant benefits from the Bordeaux brand. This would include Saint-Emilion, Bordeaux Supérieur, Sauternes, and Médoc. On the other hand, Graves, Margaux, Premières Côtes de Bordeaux, Entre-deux-Mers, and Côtes de Bourg seemed to derive little benefit from being part of the group. It is posited that this was due to the last group not having a strong enough association with the Bordeaux brand. This was especially true for Entre-deux-Mers and Côtes de Bourg, which were found to have a more modest reputation than some of the other Bordeaux wines. The AAWE suggests that specific marketing efforts be used to strengthen the link between these individual appellations and the Bordeaux brand within the consumer’s mind.

The working report concludes by indicating that further research still needs to be done. Thankfully, the fascinating field of wine reputations, their effect on group brands, and the individual members of the group, is at the forefront of modern research. Further studies promise to add to the ideas presented in this working paper.

The record heat in 2010 has some French regions moderately concerned, while others are expecting respectable yields. In general, however, many of the chateaux have already indicated that the excellent weather in July has helped some vineyards confidently predict an average harvest. Conversely, since the extreme heat was mixed with quite a bit of rain, especially right after flowering occurred in May, some vintners have reported seeing a bit of coulure – a condition that occurs when the grapes do not develop as strongly after flowering.

Specifically, Champagne has set yields at 10,500 kilos per hectare, which is up around eight percent on the 2009 vintage, which only yielded 9,700 kilos per hectare. Also of note, June was the hottest on record for nearly 35 years in Bordeaux, followed by temperatures during the first two weeks of July that were the hottest on record since 1921, which has some experts concerned that it could bring about an unnatural level of early maturity. Furthermore, Alsace vintners are currently predicting a ‘classical harvest’ at best, due in part to some difficulty flowering early on, as well as to the threat of mildew from recent heavy rains.

The Burgundy region also experienced a delayed growing season due mostly to rain-induced coulure, but the recent heat in July has reportedly helped the vineyards to make up some of the lost ground. This now has some experts from the region predicting a later than usual harvest with near-average yields for the 2010 vintage, although most foresee around 20 percent less volume than an average harvest as a result of the coulure.

Georges Haushalter, who is a respected negociant, the general manager of Compagnie Medocaine des Grands Crus, and the newly announced CIVB president, has unveiled a plan known as ‘Bordeaux Tomorrow.’ The idea is to increase overall production by around 12 percent, while simultaneously reducing the 1.1m hectolitre of ‘basic Bordeaux’ that is currently being produced. By definition, ‘Basic Bordeaux’ is generally considered to be any wine that is sold for less than €2 in France.

To accomplish this, grants and subsidies will be used to destroy existing vines and/or encourage winemakers to retire, and in some cases they will even be used to hire experienced winemakers who can improve the quality of borderline properties. Although the number of growers is expected to decrease by around 26 percent and vineyard surface to decrease by around 7 percent as a result of the new plan, it will also require the more profitable areas of Bordeaux to ramp up production.

In addition, Haushalter’s new plan includes the development of a simplified labeling system that is designed to help consumers more easily identify the many different types of wine that are available on the market. From a wider perspective, it also seems as though more aging winemakers are now having greater trouble finding younger replacements upon retirement. This has created an environment in which some vineyards have fallen into disrepair, and has prompted the new plans to restructure the entire area, bringing winemakers together and preserving any vineyards that can be saved. A major hope is that this move will make room in the marketplace for more profitable Bordeaux vineyards and improve the overall quality of wine produced in the region.

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

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.

Some of the most famous of the world’s great wines are made within the Bordeaux region of France; with the Saint-Emilion, Medoc, Pomerol and Graves sub-regions producing some of the best fine wines. With more than 10,000 wine growers and 57 appellations Bordeaux has some 9,000 wine-producing chateaux which produce 660 million bottles of really excellent wine every year.

The most revered (and expensive) Bordeaux wines comprise the five “first growths”: Lafite-Rothschild, Margaux, Latour, Haut-Brion and Mouton-Rothschild as well as other top-level investment calibre wines such as Petrus and Cheval Blanc.

If you’re buying wine as an investment, it is advisable to consult a reputable advisory company. But here’s a brief summary of some of the best recent vintages of the Bordeaux sub-regions that would have historically yielded good returns:

1. 1982: Considered an “exceptional” vintage. Go for wines from St. Julien/Pauillac or Pomerol sub-regions.

2. 2005: Considered by many the vintage of a lifetime across all of Bordeaux, although Robert Parker’s scores do not necessarilty reflect that.

3. 1986: All regions had good yields.

4. 2000: St. Julien/Pauillac, Graves and St. Emillion should be considered, then Margaux and Pomerol. This was one of the best vintages in the last decade and while ready to be drunk, can improve further.

5. 2009: Three massive questions will dominate this springs Bordeaux en primeur campaign: will this turn out to be the spectacular vintage that most are predicting? With increased demand from the far East confirmed, will the Bordeaux negociants (those who set pricing) use this as an opportunity to hugely increase release prices after 2008’s (mostly sensible) pricing structure? Finally (and probably most importantly): what will the hugely influential Robert Parker think?

Generally, even among the best vintages, the prices of individual wines will rise at a different rate. Furthermore, even within a single wine, price will generally vary a great deal across vintages…

One fact remains true – the longer one is able to hold onto one’s selections, the greater the chance of a good return; most Bordeaux wines are constructed in such a way as to improve greatly over a period of time, usually up to 50 years.

In the rush to find a safer alternative asset class, it is wise to consider the following points before you place your hard earned funds:

Not all wines appreciate in value. Only the top wines of each vintage can yield good returns. Bordeaux wines make up more than 70 percent of the fine wines market.
Consider the wine’s rating/score. A high rating/score from influential wine critics, such as Mr. Robert Parker or Ms. Jancis Robinson, could create a demand for that vintage with the inevitable rise in prices.

Keep an eye on price trends. In general fine wine prices rise but some wines do see a fall in demand. In a given vintage, different labels could see a different rate of price increase. For instance, a 2005 Lafite may appreciate at a different rate from a 2005 Mouton. Even within a label, demand will vary. For instance, demand for a 2005 Lafite is greater than the demand for a 2007 Lafite. The fine wine investment market consists mostly of Bordeaux vintages which have, over time, earned their reputation as quality wines that improve with age. Ensure that you only select the best Bordeaux from the best vintages.

Beware of fake wines! Experts believe that around 5 percent of the fine wines available are just plonk in original bottles. Buying from a reputed distributor could save you a lot of trouble.

That was for a wine that could no longer be consumed, having been kept for over 200 years whereas the normal maturity time is 50 years after which the wine becomes more or less expensive vinegar.

While not all Bordeaux wines would fetch such an astronomical price, most First Growths from the region command a price that is out of the range of the average middle-class wine lover. There are many reasons for Bordeaux fine wines commanding such incredible prices, but let’s take a look at some important factors:

The Bordeaux region in France is ideal for growing the best quality grapes that yield the highest concentration of flavours and aromas. Combine that with their centuries of experience in grape cultivation and you understand why the vineyards are special.

Their wine-making skills have been honed over the years, enabling wine producers to get the best out of each year’s vintage, even a bad one. Add to that their use of better tools and equipment including the best oak barrels, premium glass bottles and cork for bottling them.

Then there’s the aging of the wine: most Bordeaux wines taste better when they’re allowed to age over a period of time, usually up to 50 years.

There’s also their relative scarcity. Only a limited quantity of a vintage wine can be produced. Each time a wine connoisseur opens a bottle of Lafite or Mouton Rothschild, there’s one less bottle available for the rest of the world.

Finally, more people, mainly the nouveau riche Asians, are discovering the pleasures of drinking wine – so as demand increases we are seeing prices rise.