marketanalysispage3 countryindepthpage4 … · moldova’s wine exports went to other parts of the...

W ine investment appearsto be back in the mindsof high-end consumers,but they have beenturning away from

France in favour of Italy. Top names inItaly such as Brunello and Barolo havebeen usurping the long-establishedestatesofBordeauxorhard-to-findBur-gundies.

“For the past six to 12 months, thewords ‘wine investment’ have resur-faced,andIbelieve thecollapseofpricesfor blue-chip wines with the weakeningof the euro are getting people excitedabout wine again,” says Paulo Pong,managing director of the Altaya Group,awine merchant in Hong Kong withalmostadozenwineshops.

“Things likeBrunello2010areourhotpicks. They rank as some of the bestever produced in their respectiveregions.”

Indeed, the 2010 Brunello di Montal-cinos were the best wines ever producedin Italy’s famous region of Tuscany.These bold reds are produced using onlythe Italian Sangiovese grape and agedfor five years before release. The 2010vintage produced reds that are rich andpowerful, yet fresh and refined owing toa longer than usual grape-growing sea-son.

“2010 was a stellar year for Brunellodi Montalcino, with most estates pro-ducing their best wines ever,” says GaryBoom, managing director of London-based Bordeaux Index, a fine wine mer-chantwithclientsworldwide.

“Again, we had enormous demandhere and sold over 20,000 bottles acrossvariousproducers.”

I rated almost 400 different 2010Brunellos over the past 12 months.Some are regular bottlings that are onthe market and others are riserva andsingle vineyard reds that will bereleased in January2016.Somanyof thewines are superb quality. That is why Igave the following wines perfect ratings(100 points) including: Luce della Vite,Livio Sassetti, Siro Pacenti, Le RagnaieVV, San Polino Helichrysum, Casanovadi Neri Cerretalto, Assunto Riserva,Ciacci Piccolomini d’Aragona, Pianrosso

Santa Caterina d’Oro Riserva, RenieriRiserva, San Filippo Le Lucére Riserva,and Valdicava Madonna del Piano Ris-erva.

“Brunello 2010 has been spectacu-larly successful,” says Simon Brewster,senior private client sales manager atFine & Rare Wines in London. “A greatvintage, it has been backed by the criticsacross the board and comes from aregion that’s easy to understand. Moreimportantly, prices are reasonable andoffer fantasticvalueformoney.”

Reasonable pricing compared toother top collectibles, however, suggeststhat Brunello may not be the best wineinvestment from Italy. Super Tuscanwines such as Sassicaia, Masseto, Ornel-laia, Tignanello, and Solaia are traded ingreater volume on the secondary mar-ket and have a history of better priceappreciation.

Anthony Maxwell, director of Liv-ex,the online wine trading platform in Lon-

don, says: “Super Tuscans, whichaccountedfor75percentof Italiantradeon Liv-ex over the past year, attract themostsecondarymarketactivity.

“They are producing large volumes —similar to Bordeaux classified growths— and while Bordeaux has been out offavour, theyhave lookedattractive.”

Xavier Hornblow, general manager ofJeroboams wine stores in London,thinks Italy’s novelty may have beenworking in its favour. “The UK wineinvestor is characteristically well edu-cated on the wines of Bordeaux, Bur-gundy and Champagne,” he says. “So,with its plethora of artisanal producers,Italy feels like relatively undiscoveredterritory. Ithascapturedpeoples’ imagi-nation.”

Key wine merchants concur thatBarolo wines from the Piedmont regionis another Italian wine category not tooverlook at the moment. “Piedmont isthe Burgundy of Italy,” says Greg St

Clair, Italian wine buyer for K&L WineMerchants in San Francisco and LosAngeles. “You need to know more, sothe wines are generally for very savvyconsumers.”

But that is part of the interest for con-sumers with all Italian wines. “I havebeen buying Burgundy and Bordeauxfor years,” says London-based privateequity manager Philip Renaud and anactive wine collector. “But Italy is fasci-nating, especially Super Tuscans,Brunellos and Barolos. And you candrinkmostof themonrelease.”

Barolo has had a string of excellentvintages, most recently 2011, 2010,2008 and 2007. Sought-after producersinclude Giacomo Conterno, RobertoVoerzio, Bruno Giacosa and AldoConterno. Production can be small forthese producers because most makesingle vineyard bottlings similar toBurgundy. Some may only number 200or300cases.

Perhaps some of the current interestin Barolo is spurred from the disap-pointment inrareBurgundy.This ispar-ticularly so in Hong Kong, where the topwine collectors and investors areobsessed with Burgundy. The frustra-tion is not because of the quality. Thebest producers of Burgundy, both whiteand red, make excellent wines even insuchdifficultvintagessuchas2013.

However, many of the most collecta-ble wines are very difficult to find andwhat is available can be extremelyexpensive. Prices seem always to be onthe increase.

“Burgundy has all the necessaryrequirements: rarity, immense qualityand a touch of romance,” adds Fine &Rare Wine’s Mr Brewster. “Demand willalways outstrip supply for the best onrelease and you’d expect this to beheightened further as the wines becomescarcer and more desirable as theymature. That said, where the upsideswill be is harder to predict as the vol-umestradedareso low.”

The big question for 2016 is whetherdemand for fine Italian wines will con-tinue. Improved quality and collectabil-ity are not the only factors driving newinterest in Italy from the wine trade andconsumers. Italy has also been the bene-ficiary of a string of disappointing yearsin Bordeaux that has sent wine buyerslookingforpasturesnew.

“Whenever vintages in Bordeaux arenot terribly exciting, people seem tolook elsewhere,” says Patricio de laFuente Saez, managing director of LinksConcept, the Hong Kong-based winemerchants. “Italy has embraced theinternationalwinetastes . . . winessuchas Tignanello and Solaia are not expen-sive compared to similar quality winesfrom other countries. They age fantasti-cally and will always appreciate in valueaheadof thedemand.”

This love affair with Italy, however,might all change next year. The 2015vintage is expected to be outstanding inBordeaux and it has been five yearssince the global market welcomed ayoung vintage from France’s premierwineregion.

“Bordeaux looks prime for a come-back,” concludes Liv-ex’s Mr Maxwell.(see Tips Page 5) “There is potentially atop en primeur [futures market] vin-tage in the pipeline with the 2015, whichtraditionally boosts the wider Bordeauxmarket and brings interest and focusbacktoBordeaux—if theprice isright.”

JamesSuckling isawinecritic living inHongKongandchief executiveofJamesSuckling.com.He isalsowineeditorofAsiaTatler.

Does the Italian love affair have a future?Pricing Tuscanyhas benefited fromdisappointmentwith France, saysJames Suckling

‘Bordeauxlooks primefor acomeback.There ispotentiallya top enprimeurvintage inthe pipelinewith the2015’

Artisanalproducers: Italyhas capturedthe imaginationof wineinvestorsFranco Origlia/Getty Images

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In the becalmed heat off Torbay thissummerFrenchskippers in theSolitairedu Figaro used a race radio channel totease British rivals about their wines.Eventually the conversation on theradio waves turned to more seriousmatters — how to store wine on boardboats.

“With restricted accommodation,many clients, who may have 500 to1,000 bottles on board, look at the lastunutilised space for securing and stor-ingwines,”saysAndrewAzzopardi,gen-eral manager of Malta-based mer-chants, No 12, adding that this oftenmeans choosing locations that are par-ticularlyunsuitable.

He explains that wines can age or“move forward” faster at sea because ofthe movement and engine vibration,possibly causing change at a molecularlevel, disrupting the tannins and affect-ing the structure of the wine. “It’s diffi-cult to pinpoint exactly what happensbut we know that heat and the quality ofair conditioning are important becausewhen wines are tasted after storing indifferent areas they can taste quite dif-ferently. Something is changing thequalityof thewine.”

A specialised wine fridge is the bestlong-term solution and merchants sug-gest keeping stocks fresh by holdingwines for the shortest possible time androtating stocks — moving valued collec-tionstoonshorecellars inthewinter.

The fridges are sometimes on gimbals— pivoted supports, which minimisemovement.

No 12 has just delivered one of these“floating cellars” with a capacity for 500bottles.

Meanwhile, crew training is advanc-ing. Enjoy Discovering Wines, a wineeducation company, offers courses inthe off-season specifically aimed atsuperyachtcrews.

How to getthe best outof the bottlewhen youare all at seaYachts Specialist fridgeson gimbals are agood solution, writesSimon Greaves

Moldovan winemaker Purcari’s Free-dom Blend was created in 2011 to com-memorate Moldova, Georgia andUkraine’s 20 years of independencefrom the Soviet Union. But it took onanother meaning when Russian tanksrolled intoCrimealastyear.

Purcari’s creation is a blend of winesfrom all three countries. However, inMoldova’s capital Chisinau, wine enthu-siasts joke that instead it representslands partially invaded by Russia,including not just Ukraine’s Crimeapeninsulabut theoccupiedterritoriesofSouth Ossetia in Georgia and Moldova’sowndisputedTransnistriaregion.

In recent centuries Moldova’s wineindustry has relied heavily on customfrom its eastern neighbours, none moreso than Russia. But that is now startingto change. Strained by geopolitics and

hurt by periodic import bans imposedby Moscow in retaliation for Moldova’sfriendship with the EU, the country’svineyards are turning west for invest-ment and new export markets, keen toproject themselves as a modern regionwitharichhistory.

“There is a regional crisis and thesetraditional markets do not work for usany longer,” says Dumitru Munteanu,director of the National Office for Vineand Wine, the industry’s lobby group.“Our strategy is to be less dependent oneastern markets. We are trying to reori-entate our exports to find moreopportunity and more reliablepartners.”

In 2004, 90 per cent ofMoldova’s wine exports went toother parts of the former SovietUnion, with almost 40 per centgoing to Russia. Last year 68per cent of the 67m bottles ofwine exported from Moldova,worth $156m, went east. Theindustry’s aim, Mr Munte-anu says, is to reduce thatto 33 per cent before theendof thedecade.

“Until 2006, majorinvestments that came to

the wine sector were Russian. But thenthe first Russian ban was imposed andsince then more and more interest hascome from Germany, the US and thewest,” Mr Munteanu says. “Many grow-ers understand that without a reliablepartner outside the country, it is veryhardtoaccessmarkets.”

Wedged between Ukraine and Roma-nia, Moldova’s geography plays an inte-gral part in an industry that produces15m decalitres of wine each year,accordingtoWineofMoldova,agovern-menttradepromotionbody.

Rolling hills abound, with theslopes of valleys accounting for

almost 60 per cent of the coun-try’s surface area. A long summeralso helps: Moldova’s latitude

matches that of Bor-deaux and Bur-

g u n dy. T h eMoldovans saythat they havewine in theirblood. “For us,it is . . . a key

element of our national identity,” saysVictor Bostan, chief executive at PurcariWinery. Purcari sells 65 per cent of itswine in the EU, thanks to strong growthin countries such as Romania andPoland.

Like many regions looking to expandin the crowded European market,Moldovan growers started in the valuesegment, aiming to ape the rise of Chil-ean and Australian wines. Today brandssuch as Purcari want to position them-selves as an exotic option for drinkerskeentoexploreundiscoveredwines.

Investors are taking note. The pastseven years have seen 30,000 hectaresof vine plantations in the country, saysWine of Moldova, with €330m of invest-ments in land, production equipmentandtechnologyoverthepastdecade.

A European Investment Bank pro-gramme provides up to 50 per cent offinancing for investments in the coun-try’s agricultural sector, with a focus onattracting business keen to export to theEU. A Moldovan government subsidyfund provides a list of financial incen-tives to invest in the industry. MrMunteanu says investors as far away asChina, South Korea and Nigeria are tak-inganinterest inhiscountry.

Moldova turns its eyes to the westMarkets About 90 percent of exports used togo to other parts of theformer Soviet Union,writesHenry Foy

F or many wine lovers theexpectantgloomofasubterra-nean wine cellar is all part ofthe fun, but a new breed ofoenophile is now choosing to

forgo this in favour of something rathermorehi-spec: thefeaturewinecellar.

Hand-crafted from walnut, oak,bronze and glass, artfully lit andequipped with the latest cellaring tech-nology, this new style cellar is nottucked away in the basement, it is anarchitectural feature — and even anentertainingspace—initsownright.

“In the old days you’d go and get thewineoutandnooneevensawthecellar,”says Richard Miller, managing directorof cabinet makers Halstock, which hascreated a number of high-end designsfor private clients. “It would be dankand dark, possibly with a frog in it andan old bicycle — good for keeping the integrity of the wine, perhaps, but notvery welcoming. Now we’re seeing cel-lars increasingly being located in prox-imity to the games room or the kitchen,so they’reaccessibleandvisible.They’resomething that people can share withtheir friends, much like a gun room oranartcollection.”

At the more modest end of the scale,that cellar might be a climate-control-led, glass-fronted feature wall inte-grated into a hallway or games room.The spiral cellar — which sees bottlesracked round a corkscrew staircase inthe ground — has also become a popularsolution for properties tight on space.But a growing number of wealthy clients

are now commissioning fully-fledged“winerooms”,accordingtoMrMiller.

These are spaces which marry state-of-the-art cellaring with professional-standard tasting tables (equipped withsink, spittoon and decanting area), barsand glassed-off dining areas which allowguests toadmire theirhost’swinecollec-tionwhile theyeat.

Halstock’s biggest project to date hasbeen a 70 sq m wine room for 8,000 bot-tlescompletewithtastinganddecantingareas, wine conditioning cabinets and agated zone for the rarest crus, says Hal-stock’s senior designer and project man-agerPaulWalton.

“Precision is everything,” saysAndrew Richards, development direc-tor at London-based architectural andinterior design practice Studio Indigo.“Not just in the design of the climaticequipment but also in the design andexecution of the finer details of the cabi-netryandmetalwork.”

That means ensuring that drawers arecushioned to minimise vibrations.Smooth finishes are important, as is anodour-freeenvironment.LEDlighting isused throughout to eliminate tempera-ture fluctuations. Bare metal edging isalso discouraged in order to protectlabels fromtheslightestnickorscratch.

More tech-savvy collectors are nowalso equipping their cellars witheSommelier, a piece of software thattracks every bottle using a unique bar-code.

“This allows you to see your wholeinventory, along with tasting notes,

valuations and cellaring advice,instantly, on your i-pad,” explains MattTipping, fine wine sales manager atBerryBros&Rudd, thewinemerchant.

Showpiece cellars demand a differentstyle of curation to the traditional cave,says Mr Tipping. “Normally you’dorganise bottles by type or maturity in acellar, but in this instance it’s findingsome highlights or centrepieces to makea feature of — perhaps a selection ofmagnums, or one really large format, ora bottle of each of the first growths fromaspecificvintageondisplaynext toeachother. Something that really draws theeye in.”

In some cases, these displays cancome closer to art installations. Smith &Taylor, the wine storage specialists,recently completed a wine wall in May-fair showcasing 68 vintages of MoutonRothschild’s celebrated label series fea-

turing work by artists including FrancisBacon, Salvador Dali and Jeff Koons.The wine wall “looked almost like a but-terfly case”, says managing directorSebastianRiley-Smith.

“Along with pools, gyms and screen-ing rooms, prestige cellars are increas-ingly a way that developers are trying tooutcompete each other,” saysMark Wilkinson, partner at KnightFrank, the estate agents, giving theexample of Lillie Square, a new develop-ment of luxury apartments in Earl’sCourt which features a dining space for12 flanked by a wall of glass-fronted, cli-mate-controlled cabinets which resi-dentscan lease inorder tocellaranddis-playtheirwine.

“Even if they don’t drink it,” he says,“it allows people to have a more per-sonal, tangible connections with theirwinecollection.”

Why the dustycellar turnedinto a high-spec‘wine room’

ShowpieceWealthy clients want top designs andthe best technology, writesAlice Lascelles

On display: oneof Halstock’sdesignscomplete withdecanting area

‘They’resomethingpeople cansharewiththeirfriends,much like agunroom’

Victor Bostan:wine is in theblood

Halstock Cabinet makers specialisingin bespoke cellars, particularly in oakor walnut. Prices start at around£50,000 for a feature wall rising tomore than £1m for a wine room.www.halstock.comCellar Maison Cellar designers with astrong line in more contemporary winerooms, back-lit feature walls and glass-sided, walk-in wine “pods”. Prices startaround £20,000 plus VAT.www.cellarmaison.co.uk

Spiral Cellars Provides a range ofingenious designs for wine collectorsshort on space. Prices start at around£11,500 for a build-your-own spiralcellar, and rise to £63,000.www.spiralcellars.co.ukSmith & Taylor Has created bespokecellars for Le Manoir aux Quat’Saisons,a luxury hotel with a Michelin-starredrestaurant, and Morton’s, a Londonclub. Prices are £50,000-£250,000.www.smithandtaylor.com

Putting it down Premium storage solutions


ContributorsLucy ColbackLex writer

Simon de BurtonFreelance writer

Mure DickieScotland correspondent

Henry FoyCentral Europe correspondent

Simon GreavesSailing correspondent

Alice LascellesFreelance writer

Alan LivseyLex writer

Chris NewlandsAsset management editor

Margaret RandFreelance wine writer

Rochelle ToplenskyLex writer

Emma BoydeCommissioning editorSteven BirdDesignerAndy MearsPicture editor

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Drinking in tradition67 Pall Mall, the former premises ofHambros Bank in London, is set to openits doors as a members-only cluboffering wine storage, dining facilitiesand a place to learn more.

ft.com/wine

21 November/22 November 2015 ★ FTWeekend 3


C hina has acquired a seem-ingly unquenchable thirstforwine.

In 2013 it surpassedFrance as the world’s biggest

consumer of red wine and this year itsconsumption will jump 10 per cent to1.75bn litres, according to figures fromtheEuropeanUnion.

But the country’s taste for Frenchclaret has kept not only the sommeliersof Shanghai busy. The spike in con-sumption has also occupied the time ofChina’spolice force.

In the summer of 2013, news reportsindicated more than 40,000 counterfeitbottles, valued at $32m, were seized in araid by Chinese police, while the previ-ous year more than 350 cases of bogusChâteau Laf i te Rothschi ldand 60 cases of fake Château Margaux

wereconfiscatedbyChineseauthorities.Concrete statistics are hard to come

by but even the most conservative ofestimates from experts suggest 40 percent of fine wine being sold in China isfake.

Some believe that figure is closer to 80per cent. The result is a serious worryfor investors.

Romain Grudzinski, a China expert atLiv-ex, the independent wine exchange,

puts it simply: “Investors in fine wineshould not be buying in China. Not onlybecause of the potential of buying fakesbut because the global market will notbuyitback.”

Those risks have also created oppor-tunities, however. Bottles proved to bethe genuine article have fetched recordsums, and in February Château MoutonRothschild’s first “ex-château” (storedat the château until the sale, thus reas-suring investors concerned about prov-enance) auction at Sotheby’s in HongKong raised $4.1m — more than doublethe presale estimate. A rare 66-bottlecollectionwassoldfor$376,900alone.

“Wine fraud in China is both a prob-lem and an opportunity,” says WilliamGrey, investment manager of the WineInvestmentFund.“Ofcourse, it’saprob-lem from the ordinary consumer’s per-spective as it is difficult for them to besure that what they are paying for is thereal thing.

“But the flipside of this is that stockwith impeccable provenance — in otherwords, which cannot be fake — is highlysought-after and will command the bestprices.”

In May last year the authorities inChina and France signed an agreement

to increase efforts to reduce the amountof bogus French wine for sale in China.Fleur Pellerin, France’s secretary ofstate for foreign trade, said at the cere-monial signing in Beijing: “This bilateralco-operation reflects the commondesire of France and China to protectproducersagainstcounterfeits.”

And the sense is the situation may beimproving.

Solicitor Nick Bartman, who was pre-viously based in Hong Kong and focuseson wine fraud in China, says: “Thingshave improved, particularly as moreChinese are able to identify rubbishwine. As their taste buds attune, fraud-sters are having a tougher time, andsomearefallingawaytoseekalternativeproducts to leechfrom.”

Victor de la Serna, who has writtenaboutwineformorethan30yearsandison the advisory board of Vini Catena, aglobal equity fund specialising in theindustry, says: “Things are on the way toimproving. The Chinese authoritiesseem to be becoming increasingly awareof themagnitudeof theproblem.”

Perhaps the biggest issue in China,however, is excessive pricing ratherthan counterfeiting. According toMr Bartman, the trade price of a 2007

Le Blason de Larrivet Haut-Brion is £15,while the same bottle can be found inrestaurants inChinafor£200.

Jim Boyce, a Beijing-based wine con-sultant and founder of the blog GrapeWall of China, says: “If you have con-sumers who buy simply because of alabel, with little knowledge or apprecia-tion of the wine behind it, you open thedoor forabuseof that ignorance.

“But the good news in China is that weare seeing a shift toward a more taste-based market, with new waves of con-sumers going beyond Bordeaux, beyondFrance, and beyond the red wines con-sumersareconvincedthey like.”

Mr Boyce, who has lived in Beijing for12 years, cites an experience he had dur-ing his early years in China. He says: “Iremember being at a wine fair where aFrench salesperson was pouring sam-ples of some faulty Bordeaux. When Ipointed out the wine was bad, he said itwas fine, and went on trying to convincepeople to buy it based on the region’sname and the supposed expertise hehadsimplyduetohisnationality.

“I bring this up because part of whatmakesBordeauxaneasytarget for fakesis that people are focused on statusratherthantaste.”

A good nose is needed for the grape haul of ChinaFraud Investorsmustbe careful of fakeswhen buying insidethe country, explainsChris Newlands

‘Thingshaveimproved,moreChinese areable toidentifyrubbishwine.Fraudstersare having atoughertime’

Buyer beware:fixation on‘brand’ labelshas encouragedabuse ofcustomers’ignoranceReuters

For some wine lovers it is not about thepop of the cork, but the bang of thegavel. The thrill of bidding on the finestand rarest wines can drive wealthy col-lectors to pay otherworldly prices fortheir targets. Years of rising world stockmarkets and ultra-low interest rateshave generated enough wealth to fundanother year of healthy wine auctionactivity. But beyond the hype, there is aquestion:arehammerpricesata peak?

The most sought-after wines continuetograbtheheadlines.Overthepastyear,top marques from Burgundy and Bor-deaux have dominated, selling at orabovereserveprices.

Even so, auction wine prices have nothit new highs this year. “After severalyears of steady improvement, prices areflattening,” says Peter Gibson of theWine Market Journal. The WMJ tracks

prices for top wines at auction andclaims to have data for vintages post1980 from all leading auction houses inEurope, Asia and the US. Its index forthe 150 best-selling wines has slippedabout3percent thisyear.

Still, auctionhousesdofindhomes forthe most collectable wines. “Big collec-tions,” says Stephen Mould, head ofEuropean wine at Sotheby’s, “with goodprovenance and impeccable storage,havesoldwell”.

In May, Sotheby’s auctioned the col-lection of New York financier DonStott,bottles lovinglygatheredovera half century. Almost all of thewine — more than half from Bur-gundy — sold to North Americancollectors and fetched more than$8.4m, against a high estimate of$6.2m. The highest price was for acase of Montrachet 1973 Domainede la Romanée-Conti that wentfor $58,188 to an Asian privatecollector. The estimate had been$25,000to$35,000.

Last month, an auction ofwines direct from ChâteauMargaux, offering virtuallyguaranteed provenance ofthe bottles, made morethan $2.8m — doubleSotheby’shighestimate.

Sotheby’s and Christie’sas well as specialist wineauctioneers Acker, Merrall& Condit all report goodsell-through rates — theproportion of inventorysold — for their auctions ofthe top collections. Acker,Merrall & Condit reportedan average sell-throughrate of more than 93 percent by the end of Septem-ber. Top houses that dosecure these collections are

raking in the commissions. In 2014Sotheby’s claimed it was top global auc-tioneer recording more than $65m insales of wine. Acker, Merrall & Conditlooks set to top that this year, reportingsales of $40m in Hong Kong and NewYork in the six months to the end ofJune. More than two-thirds of that fig-urecamefromsalesofBurgundies.

Buyers have raised their hands notjust for theperennial favouriteDomainede la Romanée-Conti but also for HenriJayer. The current sweet spot is for thedecadesencompassing1980-2000.

Top châteaux in Bordeaux once regu-larly topped the rankings, but after adecade of rising prices WMJ data showBordeaux prices have declined and Bur-gundies have risen to dominate auctionmarkets for the past couple of years.Domaine de la Romanée-Conti is nowseen as one of the most desirable pur-chases, but even so, its prices haveslipped this year for the first time since2010, while other top Burgundies haveheldupmuchbetter.

Buyers are also increasingly lookingoutside France for collectable wines asthe reputations of Italian and US vine-yards swell. Makers such as Bruno Gia-cosa of Italy and Screaming Eagle in theUS attract top prices. “Market powerhas switched from the critic to thebrand,” notes John Kapon, chief execu-tiveofAcker,Merrall&Condit.

Second and third growths (Bordeauxrankings that are second and third fromthe top) have succeeded in the Asianmarket,asbuyers thereare fast learningthe quality of many of these châteauxcan approach the excellence of the firstgrowths (premiers crus), says DavidElswood, head of wine at Christie’s.

Also, the second wines of the greatBordeaux châteaux remain popu-lar, though not at the inflatedpricesofa fewyearsago.

Moreover, buyers have soughtout other, less-travelled roads. Forexample, Mr Elswood at Christie’ssays vintage port and Madeirahave also had a revival over thepastcoupleofyears.Vintageportis one of the few sectors withhigher prices this year, accord-ing to WMJ’s Mr Gibson. Vin-tage champagne — usuallyreserved for drinking — hasalso done well this year.Salon’s blanc de blancschampagnes are increas-inglypopular.

Overall, though, whileauction prices haveshown signs of losingmomentum, top winesare still drawing goodbids.

And for those worriedprices have been flatten-ing, Mr Gibson at WMJsays: “The market didneedabreather.”

Top marqueshold their ownas they gounder thehammer

Auctions Prices have beenflattening, but good namesfrom certain regions havesoldwell, saysAlan Livsey

Wine price indices

Source: The Wine Market Journal

Rebased

80

100

120

140

160

2010 2012 2014 2015

BDX1st - Bordeaux first growthsBurg50 - selected grand cruBurgundiesDRC - selected Domaine dela Romanée-ContiWMJ150 - selected vintagesof 30 wines

Perennial favourite:Domaine de laRomanée-Conti

‘Market power has switchedfrom the critic to the brand’John Kapon, chief executive ofAcker, Merrall & Condit



In a cellar in Burgundy, the strains ofMozart’sEine Kleine Nachtmusik roll outover the rows of oak barrels. Earlier inthe month, the fermentation processbegan with the ringing of a Tibetanbowl; the juices have also been “hypno-tised”.

An unusual approach for a Burgundydomaine, perhaps, but veteran wine-maker Marc Jessiaume insists it has anoticeably positive effect on the qualityof the wine. His son, Jean-Baptiste Jes-siaume, chief operating officer and chiefvintner of Domaine Chanzy, agrees.They are not playing with such methodslightly: their reputation — and that ofthedomaine—resides inthosebarrels.

Bought out of bankruptcy in 2012 byParis-based private equity fund Olma, Domaine Chanzy has big ambitions. Itwants to turn the Chanzy brand into onesynonymous with luxury, as well asdevelop a range of “festive” reds andwhites that can achieve the same uni-versal recognitionaschampagne.

For the luxury offering, the domaineis aiming to broaden the appeal of winesfrom a region that Chanzy chief execu-tive Philippe der Megreditchiandescribesas“inaccessible”.

One of the challenges lies in demysti-fying the appellation system. Mr derMegreditchian, who is also managingpartner of Olma, explains that Bur-gundy has 40 of the top 50 most expen-sive brands in the world but “no oneunderstandshowtoreadthe labels”.

Burgundy winemaker Alex Gambalconcurs. “It’s a totally confusing system.You automatically think just becauseyou’ve got a grand cru or a premier cruyou’ve got a good wine — but it is just aranking of the potential of the land.”The quality of wine produced from asimilar piece of land will vary greatlyaccording to who has made it, he says.“The key word,” Mr Gambal stresses, “ispotential.”

Chanzy will rely on winemaking fam-ily Jessiaume,spearheadedbysixthgen-eration Jean-Baptiste, to develop luxurywines of consistent quality across

Chanzy’s 40 appellations. At 25, Jean-Baptiste is young to be heading adomaine. When Olma recruited him torun Chanzy in 2013, people in the indus-try said it was “absolutely crazy”. Mr derMegreditchian, however, was confidentof Jean-Baptiste’s pedigree: in 2012, thefirst year he took solo responsibility forthe red vintage at the family’s olddomaine, Jean-Baptiste won Burgundy’syoungwinemakerof theyearaward.

Olma also knew that it could rely onthe family — Jean-Baptiste’s father Marcand uncle Pascal — to give him support.The three work together — Pascal on thevines, Marc on the whites and Jean-Bap-tisteonthereds.

Still, as Mr Gambal observes: “Makingthe wine is the easy part. Selling it anddeveloping a brand is the hard part. Ittakesso longtomakeaname.”

Called simply “B”, Chanzy’s festivewines come in bottles encased in sleek

opaque sleeves: white for white wineandblackforred.

B is aimed squarely at the party set: apromotional video playing in the tastingroom alternates between shots of pool-side DJs and bikini clad revellers. It waslaunched this year in St Tropez, retail-ing at €80 a bottle. The company is inadvanced discussions to sign a contractsupplying 30,000 bottles to a globaldrinkscompany.

A challenge to scaling the business issecuring volumes — especially in Bur-gundy. From the hillside overlookingthe Côte de Beaune’s Meursault appella-tion, the autumnal patchwork of tinysquares marking out individual landholdings illustrates the difficulty for anyone winemaker of making a product involume. The appellation system exacer-bates the situation. With premier andgrand cru at the top of the peckingorder, those with access to even a smallslicearereluctant togive itup.

Adding to the problem are poor har-vests; since the bumper year of 2009,weather conditions have resulted in lowyields. And as prices have risen for Bur-gundy wines, more grape growers haveopted to make their own, leaving lesssurplus for other domaines to buy in tosupplementvolumes.

Still, in the Côte Chalonnaise, whereChanzy is located, volume contracts areeasier to obtain. It may help, too, thatChanzy has used less popular varietalaligoté grapes for its first offering ofwhitewineundertheBbrand.

The domaine has other plans to growB, by incorporating new wines from asister vineyard in the Côtes du Rhône.With nearly 100ha to Chanzy’s 30 or so,the southern stable mate — the two aredue to finalise a union in December —will add another region to the line-up, aswellasnewgrapevarieties.

Investors will have to wait a bit longerto buy into this new Burgundy story.This year Chanzy pulled a crowdfundedinitial public offering, pending comple-tion of the Côtes du Rhône deal. Now,the company wants to increase reve-nues fourfold, to €10m, before it tries tofloatonastockexchange.

Domaine Chanzy aims toenchant the party setBurgundywinemakershope the brandwillbecome synonymouswith luxury, explainsLucy Colback

Jean-Baptiste Jessiaume: at 25 he is young to be heading a domaine

‘It’s a totally confusingsystem. You automaticallythink just because you’vegot a grand cru or a premiercru you’ve got a goodwine’

C hile’s unique geography,with its mountains to theeast, oceans to the west anddesert to the north confers aunique advantage to the

country’s wine growers. They are, ineffect, protected by physical barriersfrom invading pests such as phylloxera,which has blighted vines across theworld.

In addition to these advantages, Chilenot only offers an ideal climate for grapegrowing, it has also been making eco-nomic reforms and increasing efforts toencourage trade — it is a signatory, forexample, to the recently agreed Trans-PacificPartnership.

Overseas vineyard investors, espe-cially those looking for growing regionsthat might offer protection from theeffects of climate change, are takingnotice.

What they are witnessing is a massiveincrease inwineproduction inacountrythat Miguel Torres, one of Spain’s bestknown winemakers, has called a “viti-cultureparadise”.

Vineyards have extended the areasundercultivationby25percentoverthepast five years. Meanwhile, increasinglysophisticated viticulturalists are discov-ering new growing areas as the effects ofclimate change and the positive effectsof improved techniques encouragethemtoinvestigate furtherafield.

About 138,000 hectares of land arecurrently devoted to growing grapesacross an area that spans more than 14degrees of latitude — a distance of about1,700km. New growing regions are

being developed such as the Itata Valleyin the far south and Chile Chico andLimariValleytothenorth.

Because of the country’s natural pro-tection from pests, the organic segmentof the industry is seeing particularlystronggrowth.

Chile’s vineyards are set among twomountain ranges of the Andes with val-leys that cross from east to west. Tem-peratures are regulated by the coldHumboldt current that flows throughthe Pacific Ocean along the west coast ofSouth America and by the mountainsthemselves, both helping to mitigate ris-ingglobal temperatures.

The vineyards are dispersed acrosshillsides, in valleys and in coastal areaswhere limited water forced the industryto modernise water management andreplace traditional flooding irrigationwith a drip system that has a benevolenteffect on the quality of the grapes. Thegrapes are picked earlier, are lower inalcohol content and produce wines thataremucheasier todrink

In the past, people talked about thedifference between wines from thenorthern and southern valleys. Today,however, it is also possible to taste thedifference between wines from the foot-hills of the Andes and those from thecoastal regions.

The developments have been nosmall achievement. Wineries are culti-vating Sauvignon Blanc as high as 900mabove sea level in the foothills of theAndes, producing exquisite white, min-eralisedwines.

In the Elqui valley there are vineyards

at almost 2,000m above sea level. In thesouth, Pinot Noirs are coming from thelakedistrictofChile.

Meanwhile Muscat of Alexandriagrapes are being grown as far south asthe 38th latitude. New varieties havebeen introduced and Mourvèdre, Carig-nan, Cinsaut and Gewürztraminer, areamong a few that have adapted remark-ablywell.

Chile has also become an attractiveproposition for foreign investors. Itoffers a strong legal and judicial systemandhasmadeefforts toencourage inter-national trade. In 2010 it became thefirstSouthAmericancountrytobecomeamemberof theOECD.

Foreign direct investment totalledmore than $23bn in 2014, an increase of15 per cent over the previous year,according to CieChile, the governmentagency that oversees foreign invest-ment. FDI in the rest of the regiondropped by 19 per cent in the sameperiod.

At the same time, prices have becomemorecompetitive followingthedepreci-ation of the Chilean peso as a result ofthe country’s weaker growth outlookcaused by the collapse in the price ofcopper — Chile’s main export. Add tothese incentives the fact that the recentdrought has brought down land pricesandlabourcostsremain low.

New foreign investors will be walkinga well-trodden path. Mr Torres iscredited with helping Chile’s wineindustry to take off in the early 1990swith his company’s investments in

mainstream wine producers. Other for-eign investors include the Marnier Lap-ostolle family, Mondavi, and BaronPhilippe de Rothschild who have helpedto bring new technologies to the indus-try ingeneral.

In more recent years new investorshave formed joint ventures or allianceswith smaller producers such as the O.Fournier Group, Siebenthal and Gill-more helping to bring further diversifi-cationtothe industry.

MarcelaMolinaShawisabusinessconsultantwho lecturesonthewineindustryatSanSebastiánUniversity,Chile.

Advances inviniculture add toChile’s attractionfor investorsRegionsA natural protection frompests helpsproduction, writesMarcelaMolina Shaw

Chileanwinemakersaremakingwines thatcarry an authenticexpression of their origin

Rancagua

Talca

Concepcion

Temuco

Valparaiso

La Serena

ACONCAGUA REGIONAconcagua Valley

Leyda Valley

San Antonio Valley

Casablanca Valley

ATACAMAREGION

CENTRALVALLEY REGION

SOUTH REGION

AUSTRAL REGION

COQUIMBO REGIONElqui Valley

Limari Valley

Choapa Valley

MaipoValley

RapelValley

Cachapoal Valley

Colchagua Valley

Teno Valley

Claro Valley

Tutuvén Valley

Loncomilla Valley

CuricoValley

MauleValley

Itata Valley

Bio-Bio Valley

Malleco Valley

Cautin Valley

Osorno Valley

Copiapo Valley

Huasco Valley

Chileanwine regions

40 km Source: Wines of Chile

40o

38o

36o

34o

32o

30o

28o

Costal areasBetween mountain rangesAndes areas Sub regions and zones

Lontué Valley

Pacific Ocean

Santiago

Individual flavours: improvedtechniquesmean vines can even begrown high in the Andes

21 November/22 November 2015 ★ FTWeekend 5


W hat lies ahead for Bor-deaux futures? Ask anyBritish wine merchantand they will say theyare disappointed with

the so-called en primeur system thatallows people to buy wines from Bor-deaux while they are still in the barrel.Consumers are turning instead to Bur-gundy and Italy: younger collectors areshowing less interest in laying down thegreatnamesofBordeaux.

Château Latour has left the futuresmarket to sell direct, when its wines arein the bottle, and a great many otherchâteaux, you can bet, are watching itveryclosely.

Yet the futures market continues toworkwell for thechâteaux: it isconsum-ers who feel it has let them down. Howdidthishappen?

The futures market works in a com-plicated way. The châteaux, in thespring after the harvest, sell the newwine to a group of Bordeaux négociants(ormerchants)knowncollectivelyasLaPlace. These négociants sell to othermerchants, who sell to consumers orendinvestors.

There is also constant tradingbetween merchants, and when thefutures market works it means profitsfor all, including consumers, who seethe value of their wine rising during theyears it spendsmaturing intheircellars.

But if châteaux decide they should begetting a bigger share of those profits,and set the initial price too high, con-sumers find the wines can fall in priceoncetheyarebottled.

In the past 10 years, the only vintagesin which consumers have seen theirpurchases increase in value are 2005and2008.Evengreatyearssuchas2009have fallen. That is not an inducementto buy futures. As Chadwick Delaney,managingdirectorof Justerini&Brooks,

the wine merchants, says: “It’s all aboutprice, really. There’s more demand nowfor the 2009s, but at the new prices,whicharedown.”

British merchants have been warningthe Bordelais for years that openingprices set by the châteaux are too high.But as they then pay those prices, it isnot surprising the Bordelais learnt nottotakethemseriously.

The structure of the futures marketmeans that the châteaux’ customers arenot the end consumer, but La Place. If

the négociants from La Place do not buythe wines every spring, they risk losingtheir allocations. So they keep buying,and the châteaux are reassured becausethey have sold their wines. Therefore,they feel the price was right. Visit Bor-deaux and talk to the château ownersand you will find little suggestion theyfeel theymighthavegot itwrong.

The top châteaux are profitable, saysnégociant and château-owner Jean-Christophe Mau: “The châteaux havestocks of the 2013s, but they made

profits on 2011, 2012 and 2014.” Con-sumers did not queue to buy the 2014s,but the châteaux sold them. If there wasany doubt about the châteaux’ profita-bility, one need only visit Bordeaux andseetheamountofbuildingwork.

The châteaux, therefore, do notbelieve they have a problem. The 2014swere good but not that good, and open-ing prices en primeur were about 10 percent higher on average than the previ-ous year. The 2015s are looking verypromising, and prices will undoubtedlyriseagain.

Who will buy? Mr Mau sees someproblems:“Chinaisn’t there.Russia isn’tthere. The British market will be therebut not at the price of 2010. The US iscomplicated and just takes a few names.The French market is very price con-scious.”

Justerini’s Mr Delaney warns it allcomes down to price. “If the Bordelaisprice the 2015s properly they have achance to recreate demand, and we’dhave an active primeur campaign againfor thefirst timesince2010,”hesays.

“People would start talking aboutBordeaux in a positive way again. But itdepends on the estates,” he says, adding:“Prices for the 2014s were mostly notcorrect.”

The 2015s are being talked up alreadyby the châteaux in Bordeaux. Prepare forsubstantialprice increases.

In the meantime, merchants who tra-ditionally relied on Bordeaux have beenadapting to a world in which Bordeauxforms a shrinking part of their turnover.“Bordeaux has been a declining part ofour turnover for four consecutive years,while we’ve seen growth in Burgundy,ItalyandChampagne,”saysMrDelaney.

Burgundy and Italy, in particular, arecomplex wine regions that demand, andreward, a lot of attention by collectors.However, once you have started explor-ing the intricacies of the Côte d’Or, forexample, Bordeaux can look mundane.And if you do want Bordeaux, recentyears have shown that you will usuallypay less if you wait until the wines are inbottle.

If you want wines to drink rather thanas investments thereare,however, still anumber of châteaux offering goodvalue. Mr Mau’s own Château Brown isone: it is in Pessac-Léognan, it is unclas-sified, but the work Mr Mau has put intothe vineyard and winemaking means itis punching well above its weight. Thewhite, inparticular, is looking lovely.

In the Médoc, Sociando-Mallet, alsounclassified, is making wines of greatsucculence and elegance. At somewhathigher prices, Angludet and Phélan-Ségurarereliablyexcellent.

In the upper reaches of the classedgrowths, Pichon-Lalande and Lynch-Bages are not cheap, but not overpriced.Butyoudonothavetohurrytobuy.

Liv-ex 50, an index of the most tradedBordeaux wines, rose nearly two-thirdsin the16months to June2011.Today it isdown40percent fromthatpeak.

The fortunes of the venerable vin-tages that make up this index illustratethe opportunities and peril of investingin fine wine. Like markets for otherassets such as technology stocks orhousing, wine is susceptible to pricebubbles.

Despite the uncertainties, however,investors have more tools to help evalu-ate price movements today than everbefore. Companies such as the LondonInternationalVintnersExchange,whichprovides the Liv-ex indices, are makingfine wine investing easier. “We havebrought transparency to the marketplace,” says Justin Gibbs, Liv-ex co-founder.

“Liv-ex indices are the pre-eminentpricing index,” says Gary Owen, a pri-vate account manager with wine mer-chantBerryBros&Rudd.

Liv-ex publishes five fine wine indi-ces. There are two Bordeaux bench-marks. The Liv-ex 50 index tracks theprice of a 12-bottle case of each of the 10most recent vintages (excluding wine enprimeur, that is traded before it is evenbottled) of the first growths, or highestranked, Bordeaux — Haut-Brion, LafiteRothschild, Latour, Margaux and Mou-ton Rothschild. The Bordeaux 500tracks the 10 most recent vintages forthetop50wines.

Wines from Bordeaux feature promi-nently in all five indices. “Bordeauxremains the cornerstone of fine wineinvestment, primarily because ofliquidity,” says Giles Cooper, head ofmarketing at Bordeaux Index, a winemerchantandtrader.

According to Liv-ex, more than threequarters of the fine wine trade by valueon Liv-ex is Bordeaux. Burgundy,Champagne and the Italian fine winesshareanother fifthof themarket.

The three other indices — the Liv-ex100, 1000 and the Investables — are lessformulaic. They include wine with his-toriesofcriticalacclaimthatareactively

tradedinthesecondarymarket.BeyondBordeaux, they include Burgundy,Champagne, Côtes du Rhône andselected Italian wines (for example,BarolosandSuperTuscans).

The wines that compose the bench-marks are adjusted quarterly. Expertopinions from the likes of Antonio Gal-loni,AllenMeadowsandJamesSucklingareconsideredalongwithLiv-extradingdata, which is based on trade valuesratherthanretailprices.

Valuations are updated monthly,except for the Liv-ex 50, which isupdated daily, using the mid pricebetween the highest live bid and lowestlive offer on Liv-ex’s market giving a fig-ure that is then validated against recent

sales. The Liv-ex 100 is widely consid-ered to be a market benchmark — a sortofFTSE100for finewine.

Mr Gibbs and James Miles — bothformer bankers — started Liv-ex in Lon-don in 2000. They gathered price infor-mation from fine wine merchants andauctions and created a market wheremerchantscouldtrade.

Fifteen years later Liv-ex has 440 reg-istered merchants from 35 countrieswho buy and sell 5,000 wines in themarket. They claim these merchantsaccount for 90 per cent of the fine winetradebyturnover.

Liv-ex also provides three services in

addition to the indices: a tradingsystem where merchants buy and sellfinewine;astorageanddeliveryservice;and Cellar Watch, a service that allowsusers to see trade prices, track theirwine and receive advice on when todrinkit.

Most wine collectors drink at leastsome of the fine wine in which theyinvest. Only a 10th of wine investorssurveyed held wine purely for invest-ment, according to a Barclays survey in2012.

However, recent academic researchsuggests fine wine is a good investmentover time. Bordeaux premiers crus pro-vided a real annual financial return of4.1 per cent (after costs) from 1900 to2012. And investors might want to con-sider if prices might be attractive. “Afterfour years of declines and into the fifthyear, there is every chance that you arelooking at an entry point,” says MrGibbs.

Butexpertscounselcaution.“Provenance, authenticity and condi-

tion are critically important in termsof . . . having a valuable collection andmaintaining that value,” says JamieRitchie, chief executive and president ofAmericasandAsiaatSotheby’sWine.

To get around this, Liv-ex has devel-oped in-bond contracts to attest to theconditionofacaseof finewine includinginformation on tax status, physical con-ditionandstoragehistory.

The fine wine market is volatile. Itmoves with the economy and fads. Theopinions of a handful of experts can dra-matically shift values, suggestingdemand for services such as that pro-videdbyLiv-ex isunlikelytogoaway.

Liv-ex indices illustrate whybuyers should exercise cautionTools Finewinemarkets are volatilebut wise investors canstill make profits, saysRochelle Toplensky

2008

Bordeaux’s share of trade*Annual average (%) % rebased (Jan 29, 1988)

10 12 14 2015

0

20

40

60

80

Liv-ex Fine Wine Investables

Return comparisons

15102000FT graphic Sources: Liv-ex; Thomson Reuters Datastream; FT calculation

*By value

1988

2500

2000

1500

1000

500

0

FTSE All-shareS&P 500MSCI World $

‘After four years of declinesand into the fifth year, thereis every chance that you arelooking at an entry point’

Bordeaux investors should not hurry to buyFutures Buyers aresceptical about enprimeur as high pricesdent demand, saysMargaret Rand Don’t miss buying and/or drinking

some 2005 Bordeaux soon. I havebeen tasting and drinking some ofthe top wines in recent months andthey are spectacular.

The word radiant springs tomind. The reds are energetic andfull of character yet precise andrefined. They are beginning todrink very well, underlying theattraction of modern Bordeaux.Prices are attractive too.

Top wines are less expensivethan just a year or two ago. Forexample, Château Mouton-Rothschild was selling for as muchas $9,000 a case but currentlytrades for about $6,000. The 2005Grand-Puy-Lacoste, one of themost popular wines at a recenttasting in Beirut, sells for about$100 a bottle. That is not muchmore than what it sold for when itfirst came out in bottle in 2008. Allthe first growths such as ChâteauMargaux and Château Latour aresuperb quality 2005 as well asChâteau La Mission Haut-Brion.But some personal favouritesinclude Château La Conseillante,Château Rauzan-Ségla andChâteau Grand-Puy-Lacoste.James Suckling

Buying tip Get the2005 Bordeaux

Purchasing plans:the region iscounting on 2015being a good yearJean-Pierre Muller/AFP/GettyImages

‘Bordeauxhas been adecliningpart of ourturnoverfor fourconsecutiveyears’



H is first vintage wasdescribed as undrinkableand his second harvestyielded only enoughgrapes for two or three bot-

tles, but vineyard owner ChristopherTrotter insists his pioneering effort tomakewine inScotlandisbearingfruit.

Upper Largo, Fife may seem anunlikelyspot foravineyardbutacciden-tal oxidisation of the 2014 crop and poorweather in 2015 do not undermine thecase for producing wine north of the56thparallel,MrTrottersays.

“What I set out to show was that youcan make wine in Scotland. I’ve donethat,” the food writer and events organ-iser says at his home overlooking 200lush green vines on a south-facing slopeabovetheFirthofForth.

While others have grappled with thechallenges of growing grapes in Scot-land, Mr Trotter is sure his Largo vines

break new ground. “I have ripenedgrapes in Scotland outside for the firsttime since the Romans,” he says. “That’smystraplineandI’mstickingto it.”

Mr Trotter’s wine adventure beganwith the remark from a farming friendthat global climate change could giveScotland the climate of France’s LoireValley in a couple of decades and heshould start planting Sauvignon Blancgrapes inadvance.

When his friend agreed to fund theexperiment,hebeganplantingvines.

Instead of Sauvignon Blanc, he choseSolaris, Rondo and Siegerrebe, grapevarieties suited to cool climates, withSolaris so farprovingmostsuccessful.

Vines were bought from the UK’smost northerly commercial vineyard,250km or so south in North Yorkshire’sRyedale. Ithasnotbeenplainsailing.MrTrotter’s hopes for his first vintage, theLargo 2014, were dashed when the first

bottles were opened. Journalists seizedon the verdict of Edinburgh wine mer-chant Richard Meadows, who pro-nounced it “not yet drinkable” and onlyenjoyable “in a bizarre, masochisticway”. But he also said the wine was“structurallysound”andhadpotential.

“Basically, before the wine started toferment, it oxidised,” says Mr Trotter,blamingtherelaxedapproachhetooktoharvesting and pressing the grapes on a

warm day. “We were treating it like asortofpicnic, really,”hesays.

With the processing lesson learnt, MrTrotter was looking forward to his sec-ond try. But an unusually wet and coldearlysummer,whichhascausedtroublefor farmers all over Scotland, means theLargo 2015 will be one of the world’s rar-est wines. Still, Mr Trotter says thatdespite the weather, some vines yielded30 or more bunches, a promising signfor futureharvests.

He isnot the first to try toapplyoenol-ogy in modern Scotland. South Africanchef Pete Gottgens took on an evengreater challenge by planting 800 vineson a north-facing slope on the banks ofLoch Tay in the central Highlands. Butthe venture, part of a hotel and restau-rant development, foundered when MrGottgens’banks lost faith in2010.

Small amounts of wine were pro-duced in the 1990s from table grapesgrown in a Victorian greenhouse vine-yardatClovenfords intheBorders.

And in the windswept north-westernOuter Hebrides, smallholder DonaldHope produces a wine from Black Ham-burggrapesgrowninapolytunnel.

InAberdeenshire,knownfor its toughwinters, semi-retired geologist AlanSmithhasalsoresearchedgrowingvinesoutside in shallow trenches, but theirslow growth has shifted his focus to rais-ingwine-varietygrapesunderplastic.

Mr Smith says he hopes to be able toproduce some wine, perhaps next year.

“There is no problem with sugar levels,”he says. In Upper Largo, Mr Trotter iskeen to expand, but his partner haspulledoutandhelacks funds.

“I reckon there’s room for 5,000vines . . . which is a reasonable vine-yard and you could make a little busi-ness out of that,” he says. “I just wantsomebody with a bit of cash and a bit ofromancetosay, ‘yes,we’llhaveago’.”

Optimists can find a precedent in therecent revival of English winemaking.Though English wines were once con-sidered poor quality, their reputationhas been rising fast and England’s 135wineries produced a record 6.3m bottleslastyear.

Mr Trotter waxes lyrical when hethinks about the possibilities for whathe expects will be a light and delicateLargo wine that would go well with Fifecheeseormackerel fromtheForth.

Much will depend on how the climatechanges infutureyears.While it ispossi-ble Scotland will become warmer, thatcould also mean more rain and therehave even been suggestions that Scot-tish temperatures could fall if the warmAtlanticGulfStreamfails.

Still, Mr Trotter has already foundsome upsides to growing grapes in Scot-land. His vines have been remarkably untouched by local pests, such as roedeer,orbirds.

“The birds have never attackedthem,” he says. “I think Scottish birdsdon’tknowwhatagrape isyet.”

Hoping for more thana case of sour grapesScotland Enterprisingwinemaker aims to revive successeslast enjoyed inRoman times, saysMure Dickie

ChristopherTrotter: I justwant somebodywith a bit ofcash and a bitof romance tosay, ‘yes, we’llhave a go’

‘I don’tthinkScottishbirds knowwhat agrape is yet’

Go in search of a 2007 Ridge VineyardsMonte Bello from California’s SantaCruz mountains and the chances areyou will pay something north of £125 abottle for a wine that is generally ratedas a 90-plus pointer on a 100-pointscale. For the same money, however,Kensington-based merchant HandfordWines will sell you three bottles of 2011Cabernet Sauvignon from the MonteBello estate and you will take home athoroughly drinkable blend of 82 percent Cabernet Sauvignon, 14 per centMerlot and a little bit each of Petit Ver-dotandCabernetFranc.

It has been described by one winemerchant as the “little brother” toRidge’s more famous, more expensivepremier bottling and is typical of thesecond, third and even fourth-tier “buynow,drinknow”winestowhichproduc-ers are turning to satisfy customerdemand for less expensive, youngerlabels thatdonotneedtobe laiddown.

“The trend for younger wines is realand it’s one that is particularly notableamong French producers,” says GregSherwood,Handford’sheadbuyer.

“Bordeaux, for example, has shiftedits focus from the traditional ‘grandsvins’ to early-drinking wines and now,for every 3,000 cases of ‘first’ wine pro-duced, there might be 8,000 casesintended for early drinking. The resultis that the prices of aged wines havegone up even further — thus maintain-ing the important, premium brand —while those second- and third-labelwines have now become massive com-mercial ranges.

“Just 10 or 15 years ago suchwines were generally releasedonly to the home market forsale in bistros and so on.We’re not, however, talkingabout the really cheapwines sold in supermar-kets but good quality,affordable products thathavebeencreatedspecif-ically for the fine end ofthe market andwhich can attractas loyal a followingas ‘first’wines.”

As a furtherexample, MrSherwood citesa 2 0 0 9 L eDifese, thethird wine ofSassicaiaproduced byI t a l y ’sf a m e d

Tenuta San Guido estate. Le Difese sellsfor £15-£19 per bottle, compared witharound £45 for the estate’s second wine(Guidalberto) and £140 or more for anaged, first-labelbottle.

According to Simon Taylor, founderofHampshire,UK-basedwinemerchantStone, Vine and Sun, there are severalreasons for the increased popularity ofyoungerwines.

“It’s difficult to know whether it is aresult of producers making wines thatare enjoyable younger, or strong con-sumer demand for earlier drinkingwines, especially from America andAsia. Whichever is the case, the worldhas moved on since the days when noone would ever consider drinking a Bor-deauxuntil itwasat least10yearsold.

“From a purely practical point ofview, people don’t commonly have cel-lars in which to store wine these daysand, while dusty bottles topped withgold foil were once rather revered, I’mnot sure they really are any more,” MrTaylor says, adding that tastes changeand old Rioja, for example, is no longeraspopular.

“Ourpalateshavealsobecomeusedtoa higher-sugar diet so wine needs to bemade with fully ripe grapes. The movetowards that produces softer tannins,and therefore a wine that can be drunksooner.

“Increasingly, too, the reputation of achâteau is determined by the way jour-nalists review wine — and that means itis important to keep producing some-thing good that can be drunk young,rather than wines that are impenetrableuntil theyhaveaged.”

Mr Taylor also cites the warmer cli-mates enjoyed by New World producersasbeingconducive tomakingwines thatcanbedrunkwhentheyareyounger.

“Extra warmth and general improve-ments in viticulture now make it possi-ble tomakeatopwine forearlydrinkingnine years out of 10. These days, reallygood wine can be good when it is young,but also have the capability to last 10 or20years,”headds.

Equally supportive of young wines isSerena Sutcliffe, a Sotheby’s wine spe-cialist since1991.

“Many people feel that if they are pre-sented with an older wine then they

ought to like it. But, in reality,many young wines are truly

delicious,”saysMsSutcliffe.“New Zealand Pinot Noirs,

for example, are definitelypreferable at four or fiveyears old rather than sevenor eight, and people arereally lapping up white Bur-

gundy from 2010, 11 and12.

“For the sheerpleasure of drink-ing, I wouldn’t hesi-tate to recommendan Austrian Blau-fränkisch from2010-2012 thatcan be bought forless than £15 perbottle or, for ayoungwhitewine,a 2014 Friuli foraround£10.“After all, we

can’t drink Lafite orLatoureveryday.”

Sweet tooth drivestrend for ‘buy-now,drink-now’ rangesPalatable Tastes havechanged, few people havecellars and youngerwinescan be truly delicious,writes Simon de Burton

Sotheby’s expert:Serena Sutcliffe

‘Bordeaux, for example, hasshifted its focus from thetraditional grands vins’

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