by Wine Owners
Posted on 2020-12-16
Luke Macwilliam, December 2020
At the beginning of December, Mouton Rothschild announced that Chinese artist Xu Bing had been chosen to design the latest installment in their famous long running series. The label itself features the words Mouton Rothschild styled to resemble Chinese characters. Visually it’s attractive enough, it’s certainly quite clever and effective in the way you are compelled to look beyond the characters and see the recognisable letters hidden in the design.
Predictably the price jumped around 12% after the announcement, Mouton Rothschild, Chinese artist, good vintage, it's a banker! Isn’t it?
The last time Mouton entrusted the honour of designing their label to a Chinese artist was a decade ago in 2010, on the release of the 2008 Vintage. Now the market was very different back then, and the Chinese market was the main driver of the wine market as it grew and grew despite the financial crisis of 2008. Upon announcing the label design, prices skyrocketed.
The excitement was short lived, however. The Chinese bubble burst in the summer of 2011 and prices came tumbling down.
If we compare the big five from 2008 (nb. Lafite also included a Chinese Symbol on their 2008 label), you can clearly see the over inflation the hype caused compared to the other 1st growths. Those who bought Mouton and Lafite 2008 between Nov 2010 and June 2012 will have been licking their wounds for some time, destined to never recoup their losses.
If you bought in 2014 however, you will have seen Mouton 2008 perform in a much more sensible manner.
The last 5 years performance is a much healthier representation of the Bordeaux market in general, steady growth between 2015-2018, a flat 2018-19 (read THIS market report from Sept 2019 for the explanation) and finally strong resilience in a really difficult 2020 for markets of any kind. Has Mouton 2008 performed in this way because of it’s label or because it’s a top wine?
All of the 1st growths have tracked steadily, but more recently, Mouton and Lafite 2008 have begun to diverge in price once more showing that continued demand for these special labels does still exist.
In 20 years time when supplies of these vintages become more scarce, will Chinese demand for a label outrun the global demand for the greatest vintages (2010, 2016 etc)? That is the million dollar question.
Let’s look at the example of Mouton 2000, we have a golden combination of a special wine from a special vintage in a special bottle (not just for the Chinese Market, but for the world). The result? Steady increase in value over time as demand remains high and stocks steadily run down. The troubles of 2011 did not affect Mouton 2000 in the way they did affect Lafite and Mouton 2008.
If you buy into a Chinese label, you are buying into the notion that China is, and will continue to be the main driver of the top end of the fine wine market. If you buy into a wine, then the whole world will potentially be after what you have.
Wine is a long game, and snap reactionary decisions based on hype come with great risk. If you are looking to make a quick buck then you are likely to come unstuck. Call me boring, but I find trends more compelling than one-off anomalies. There is a place for special editions in your portfolio, they do tend perform well over time, so long as the wine is up to the task as well.
Oh, and if you fancy picking up a case of Mouton 2008 BID or BUY here.
Luke MacWilliam, December 2020
Banner Image: http://www.domainedechevalier.com
