Jancis Robinson on how to invest in wine, part one

The instinct for collecting is so strong that many of those who start to buy wine seriously end up with collections that would take several lives to consume.

As a particularly passionate collector told me when I asked him how long it would take to consume each bottle: “I never did the math because – unless I lose my taste buds and have a sale garage – I know I will kill him with a lot more wine in my cellar than I can drink. And I always buy as fast as I can, if not faster. “

Ian Mill QC saw the writing on the wall at the right time. On October 26, 2019, he sold about 65% of his collection via Zachys, New York, obtaining $ 8 million and setting 353 world records for the prices of individual wines, mainly in Burgundy fashion.

He intended to leave the wine on bond in England but, to encourage offers from the American wine trade, Zachys advised him to ship the wine to the United States before the sale. It happened a few days before the imposition of a 25 per cent duty on wine imported from Europe.

With 7,000 bottles of fine wine handpicked and stored by professionals for sale, Mill was strongly wooed by the main auctioneers. Sotheby’s had originally proposed to halt the sale in Hong Kong, which, given the turmoil and economic collapse, would not have been as smart as it turned out.

As Mill notes now about the sale of Zachys to the three-star restaurant Le Bernardin: “The timing was right, because the market was just starting to plunge. The prices of high-end wines have dropped considerably since its sale.

Mill chose the American wine retailer and auctioneer because he felt Zachys’ love for his collection and was impressed by their creativity as to the best way to sell it.

The company organized dinners for potential bidders: at Alain Passard in Normandy; in Fäviken just before the definitive closing of the world famous Swedish restaurant and at the Modern in New York. The idea of ​​these dinners was to show some of the wines. As Mill happily reports: “Each bottle sang, and I’m sure it had an effect.

“People at dinners have bought a lot and I have only had nice words since the sale about how the wines look. The wines have been sold under my name and I think that probably also helped, so that buyers can trust the provenance of the wine. ”You cannot complain about out-of-state bottles to an anonymous supplier.

Mills’s love of burgundy was sparked, as often, by just one bottle. A white Burgundy Grand Cru, the Bâtard-Montrachet from Domaine Leflaive 1982.

“It was infanticide to drink it in 1995, of course, but it blew me away.” Mill reports that he became “brainwashed” when he lived near the store operated in the 1980s by Jasper Morris, who would become a notorious Burgundy expert.

“When I started buying from Jasper, I met all of these incredible Burgundy producers. It was a magical time, ”he recalls cheerfully, thinking more about the psychology of buying wine.

“You start out completely convinced that you are going to drink whatever you buy. So, for example, I bought everything initially duty free. But, around 1999, I started buying bonds because I realized that I “was going to sell some of my wine. 15 years ago, I considered stocks to be an extremely boring investment and that I could do better in wine.”

In 1992, he was already a shareholder of Morris & Verdin, and later owned a 10% stake in Jean-Yves Devevey’s Beaune Premier Cru. Today, he is also a shareholder of Cabotte, Burgundy restaurant located in London.

I was inspired to write about the sale of wine by Thomas De Waen, a Belgian manager of Belgian private equity. He enthusiastically emailed me about his experience: “I had too much wine in my cellar and I thought that, like Marie Kondo, I would sell anything that would not cause joy. It was very liberating. Everyone with a large cellar should do it. “

He realized that about half of his wine collection, bought when he was less sure of his tastes, aroused no joy, in particular “bombs with New World fruits, special cuvées Châteauneufs and old wines that should have been drunk long ago ”. He also admits having been caught up in the hype surrounding certain producers and certain wines.

“If at some point you develop a real independent taste, you wake up one day and realize that you have in fact no interest in all this Super Tuscan, Bordeaux, Grand Cru white Burgundy, Guigal La Las, etc. that you bought because they were desirable. “

He systematically and critically looked at each wine he owned. “For me, the results were revealing,” he said, and suggested, “once you get over £ 20 a bottle, there is very little relationship between the price of a bottle and how much you look forward to to drink it. ” As a result, he has eliminated these unwanted bottles and says he is “very happy” to have done so.

You do not need a large collection to earn money. My brother-in-law has amassed quite a few bottles of Dom Pérignon during his previous career. He was very pleased with the three-figure sum obtained by his local auctioneer who, unlike the large auction houses, was not particularly interested in the exact manner in which they had been stored.

However, the collection enthusiast mentioned at the top of this article only sold wine twice: “A case of 1983 Le Pin, which I sold when it reached £ 3,000 [having paid less than £300 for it], and half a case of Chateau Lafite from 1982, when the Chinese were looking for value – or rather price – and it reached £ 24,000 per case. “

He thus defends his habit of collecting: “I tell myself that since I mainly bought good wine, which generally appreciates, I can still sell it when the conservatives destroyed the NHS and I need money for a high price, privately turned the wooden leg. “

But prices can go down as well as up. Wine is by no means a safe investment, as shown in the paragraphs below. Auctions are the most obvious place to sell wine, but there are many other options for collectors these days. I will review them all next week.

Less successful wine investments

All prices for a case of 12 regular 75cl bottles, of Liv-ex, the database and trading platform for fine wines.

The purchase of Bordeaux for the first time, in the spring after the harvest, was only financially rewarded for the 2008, 2012 and 2014 vintages of the last years.

The most obvious examples are the first growth of Bordeaux in 2009. Examples: Ch Lafite 2009 published in 2010 at £ 13,000 and peaked at £ 14,500 in January 2011. It is now £ 7,000. Ch Margaux 2009 was released in 2010 at £ 8,500 and peaked at £ 8,950 in April 2011. It is now £ 6,080.

Many of the 2010 Bordeaux wines were too expensive. Liv-ex compared the prices published in 2011 with those of February 2020 and found that 23 of the first 50 wines had dropped since they were first offered.

The most extreme example of rising and falling is Ch Lafite 2008, embossed with a “lucky” eight for the then delighted Chinese market.

It was released at a relatively modest price of £ 1,850, but if you bought at the peak of the market in February 2011, you would have had to pay £ 14,200. It currently sells for £ 7,000.

The prices of Sauternes in general have also fallen, unfortunately. Ch d’Yquem 2010 has dropped steadily since its release in 2011 to £ 4,700. It is now £ 2,580.

Follow Jancis on Twitter @JancisRobinson

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