Rob Moshein - The Austin Wine Guy

There are two forms of Reality. Depends on your bank account.

August 27, 2010

I am repeating a recent article here from Reuters because it bears sharing. One huge reality is the fact that in the US, the market for expensive wines is about dead in the water.  As I reported on earlier this year, once recession proof icons like Caymus and Silver Oak are going begging on sale in grocery stores and most people are turning down their current allocations of Screaming Eagle and Dalla Valle (at least accoring to the guy who used to grace these customers with these allocations until he quit because he had no sales).

Yet there is another reality. China and the Far East.They want First Growths ONLY. They don't care about the price. It was explained to me in Bordeaux that the Chinese believe that First Growths have a special Ch'i or force simply BECAUSE they are so expensive and desireable.  Interesting article, enjoy:

NEW YORK (REUTERS).- Like gold, top wines are highly prized, represent wealth and are selling near their historical highs.

Prices of the five premier cru Bordeaux -- Chateaux Lafite Rothschild, Haut-Brion, Margaux, Latour and Mouton-Rothschild, and the grand crus of Burgundy, particularly Romanee-Conti, are at or above 2007 levels.

"During times of economic stress and worry, buyers look to safe investments and gold is seen as a defensive strategy. It's tangible, has intrinsic value and is a good diversifier ... The same can be said for the top growth Bordeaux and for the same reasons," said Jennifer Simonetti-Bryan, an independent wine consultant.

"With markets such as China coming on board with eyes only for the top growths, it is a promising outlook for them."

Promising for the auction houses, too.

Sotheby's four Hong Kong wine auctions last spring were successful, according to Robert Sleigh, the company's vice president of wine. "Obviously, Asia continues to drive the prices in wine."

Christie's wine auctions in London, Hong Kong, New York, Geneva and Amsterdam, had sales of $13.9 million in the first half of the year, up 18 percent from the same period a year earlier. Asian wine buyers represented 43 percent of the sales figure, Christie's spokeswoman Erin McAndrew said.

Christie's is starting its fall season early with its first auction on Sept 18 in Hong Kong followed less than a week later by another in New York, according to Charles Curtis, its head of wine sales.

"I'm an optimist," he said. "I'm feeling overall very positive about the fall season - and even 2011."

Prices at spring auctions exceeded expectations. Seventy bottles Chateau Lafite Rothschild, which auction house Acker Merrall & Condit expected to fetch between $125,000 and $175,000 in Hong Kong sold for $320,250 - including the buyer's premium. That's $4,575 a bottle.

Sotheby's has 2,000 bottles of Lafite coming up for auction in Hong Kong in October with a pre-sale estimate of between $1.5 million and $2.5 million.

One Singapore-based wine broker, who managed to get a case of each of the top five growths for roughly $77,000 during spring sales, said they were being snapped up.

Saeed Shah, who works for Premium Liquid Assets Pte, Ltd, described the Asian demand for Lafite as an "obsession."

"As we get more and more millionaires worldwide we see that these same people drink these wines," Shah said, adding that with their limited production the law of supply and demand takes over.

As for gold, it is nearing its record high of $1,264.90 that it touched on June 27.
(Reporting by Leslie Gevirtz; Editing by Patricia Reaney)

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Raves, rants, musings, ponderings and wine whines... trends, tasting notes, the Austin Wine Guy Rob Moshein shares his world of wine and thoughts about it with you.

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