Who turned Lafite into vinegar?
Hi Friends and Clients,
As the title suggests, the reaction of the market to Lafite and the other first growths for that matter, is seemingly one that would sway your thinking that someone had in fact turned Lafite into vinegar. This of course can not be true because if Lafite had turned into vinegar the price would of surely gone up instead of down. The Chinese market (whose buying influence were the reason why Lafite and all the other prestigious first growths from Bordeaux sky rocketed in the first place) enjoy a good vinegar which is often used as a condiment to most types of Asian noodles. The rise and fall of the Bordeaux market would suggest that they were not connoisseurs of the flavours of Lafite. It suggests they merely bought on the back of a rising market and maintaining status to either owning or giving away Lafite as an auspicious gift.
So who loses out now that the prices have plummeted over the last few years? Well everyone of course, merchants who have seen your revenues diminish in comparison to the good times, the chateau who must now be wondering whether it would be possible to skip the next vintage, the negociants who have to please all and still make sure they sell their allocations and not forgetting the investors who came in late when the market was at its peak. Investors of course, includes the Chinese market; who have probably made the biggest investment in Bordeaux over the years and consumers who now look down on some of the best wines in the world.
Investors who entered the market more than 7 years ago have not much reason to complain as they’ve benefited from triple digit growth, (If you were prudent and took profit along the way). Whichever party you bear arms to, I am sure you have something to complain about. Enough said, I will not rub any more salt on your wounds.
So what has changed? Did Lafite throw away their best equipment? Did their vines get infected with a dreaded disease? Did they just forget what they had been doing for hundreds of years and start producing bad wine? No they didn’t, in fact many of the Chateau in Bordeaux invested largely in upgrading their Chateau during the peak of the market to produce even better quality wines than before (if it was even possible to improve their quality). And if you venture to Bordeaux these days, you will find business as usual and winemakers going about their daily business of producing outstanding wines with exceptional quality. With such complex tastes, characters and bouquet. It would be hard to find even somebody who didn’t care much for wine to disagree with the quality of these wines. When presented with a good aged vintage of Lafite, it is hard to utter any bad comments at all about this superb wine. That fact right there is what has been somehow misplaced from our short term memory. Perhaps prices went up and people turned up their noses, because they couldn’t afford to drink them anymore? Pride of those who snubbed them then, who are too eager to swallow their pride and accept that the Bordelais, really do know what they are doing when it comes to wine making. Perhaps they haven’t been too conscious or sensitive to the market’s expectations on price, but other than that, they’ve really not changed their game plan much at all.
So now that the dust has settled, I invite you all to take a look at your portfolio and if it contains Chateau Lafite or any other top first growth for that matter, don’t snub it and look down on it like a bottle of wine that has gone off. Instead, be proud to know that you have some of the best wines in the world. Hold your hand steady when the temptation rises to sell off into the market because you’ve seen prices falling. I am confident that prices will come back at some point, if they are not already starting to make moves in the right direction as we speak. And if you can afford it, don’t forget to celebrate your collection by drinking a good bottle of the finest wine you can lay your hands on, perhaps a first growth Bordeaux? After all, the age old market maker is, if the wine is being consumed then quantity will reduce. If quantities are less then this will create demand which in turn will command a higher price.
Let’s face it nothing has really changed only our perceptions and confidence.
Feel free to email me if you have any questions or comments.