Latour's first ever 2012 release - but the rest of the First Growths will need to try an awful lot harder with 2019 en primeur

by Wine Owners

Posted on 2020-05-27

So Latour 2012 is out today at £350 a bottle. What’s that got to do with 2019 EP I hear you ask? Well coming as it does just before the releases of the 2019 big boys, and because it’s the first release from Latour that wasn’t previously released EP, it’s seen as a test of the market and what the consumer’s appetite is for laying out hard earned spondoolies in The Time of Covid.

I’ve seen emails from merchants this morning gushing that this is the cheapest Latour in the market today, and how they’ve got the pricing right.

The retail channel needs to see the 2019 releases come out minus 30% v 2018. That would put Lafite et al at around £2,000/ 6 and at that price it would sell. Plus it might just re-energise the Bordeaux secondary market with a dollop of positive sentiment.

However If we compare 2012 Latour to other comparable vintages of Latour, so say 2008, 2006 and 2004, which I think is rather realistic, we see a very different picture.

Here’s the market price and JR points plotted for 2012 and those benchmark vintages selected:

And here’s the weighted effect of that taking into account scores:

The longer the bar the better the value, the bigger the gap between the longest and the next, the more compelling the buy. Not much in it is there? Which says that Ch. Latour, far from doing their 2019 EP peers a massive favour, have given absolutely nothing away. There’s no Covid discount baked into this price. The best you can say is that there’s no guff about ex Chateau premium.

So, as a curtain raiser, it's a damp squib. But that’s their release model now and who’s to say they are wrong? At least we know what we’re drinking. The reply to this question, answerable only by Lafite et al, will come soon enough.

Bordeaux 2015 – hopes and strategies for the new release

by Wine Owners

Posted on 2016-02-18

Looking ahead to the forthcoming Bordeaux En Primeur release, it seems like there’ll be plenty to be excited about, at least from a quality perspective, and there’s already a good deal of speculation about release strategies.

It’s fascinating that Chateau Mouton Rothschild has come out with a similar announcement to Chateau Latour’s 2013 En Primeur campaign withdrawal. It amounts to essentially the same thing, nuanced differently.

“Sales of our wines in bottle are growing a lot and we’ve got to the point where we don’t have enough bottles left in our cellar."

“We won’t be buying our wine back but we will be releasing less of it en primeur as we have to rebuild our inventory.”

“We haven’t lost faith in the en primeur system but you have to be reasonable with your pricing as there are so many reference points for consumers now.”

This roughly translates, into words that you and I will understand, as: "in an increasingly transparent world where discerning consumers can analyse and evaluate young wines by their relative value to past vintages, the only way we can get an en primeur campaign away is by pricing at a discount to comparable previous vintages, that recognises the end-user buyer needs a reason to buy early. That doesn’t seem to make a great deal of sense if we wish to capitalise on growing worldwide demand. Going forward, we would rather not give that discount away to more than a tiny number of en primeur buyers who will help us establish (hopefully higher) future secondary market pricing. That will create the preconditions for us to capture a much bigger slice of the downstream value of our wines, satisfying shareholder requirements for income growth and capital (land) appreciation.”

With Latour and Mouton effectively ‘out’, how will the remaining Firsts respond next year?

Last year there were only a small handful of wines worth buying early. That’s not to say there were not plenty of lovely wines made in 2014, but very few were sufficiently well priced to justify tying up cash. Given the overall superior quality of 2015, producers will hike up their prices, possibly quite a bit. Given that, it’s quite likely that savvy wine buyers will do well to continue to focus on relative values from comparable back vintages and revisit 2015 in a few years’ time. Meanwhile the impending campaign is bound to throw a spotlight on 2000, 2005 and even the better values within 2009 and 2010.

Reasons to be cheerful?

by Wine Owners

Posted on 2015-10-29

Quite a lot of members we speak to these days assume that the market prices of Bordeaux are still stagnating or falling. The morosité that had descended on the region's finest wines in by 2012 does not appear to have lifted. 

Wine traders will point to volumes that are much reduced since the giddy heyday of 2009-2011, and that is of course true.

However, it does not mean that in aggregate, prices of Bordeaux have begun an upward trend.  In the last year, the Wine Owners Medoc Classed Growth Index is up 8.2%.

Whereas the Wine Owners First Growth Index has only managed half of that in the last year, up 4.1%.

That's still better than the performance of the FTSE100, which is fractionally underwater over the last year, and exactly where the S&P500 has clawed it's way back to after the summer's wobbles.

Wine Owners 150 = Turquoise

FTSE100 = Navy

S&P500 - Green

However, when looking at First Growth performance over the last 12 months, it is far from broad-based. 'The further they rise, the longer they fall' seems to hold true, with Lafite 1986 and 1989 performing the worst at -8% and -9% respectively.

Among the vintages populating negative territory, 1986 has suffered with the exception of the very great Mouton. The exceptional 1989s and 1990s have fallen, along with with the dull 1999s.

The risers are headed by Mouton, Haut Brion and Latour. The top 10 performers registering double digit growth are entirely accounted for by these three Châteaux.

Crossing over to the right bank, predominant top performers over the last 12 months are St EmillMedoc Classed Growth Indexon 2005s and the 2001 Class A relative newcomers. Since March 2015 The Wine Owners Libournais Index is up 7%, coming off it's 3 year lows at that point.

What can we conclude from this? Some commentators are suggesting that value is returning to older back vintages on the back of 4 year declines. Relative value vs quality is likely to be a key driver of future value, for which we recommend you check out the new price per points builder on Wine Owners to which you'll need to subscribe.

Liv-ex have recently seen a predominance of trades of the 2010 vintage, and whilst there seems to be value returning selectively to the Classed Growths, one wonders if it's a little early yet the First Growths, whose starting release prices were in nose-bleed territory. Since 'the further they rise, the longer they fall' it may yet be a bit early to call.