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Bordeaux 2012 Vintage - A Taste of Things to Come for Wine Investment?

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Last week I, along with many other wine enthusiasts from across the globe, headed to Bordeaux to spend several pleasant days having a first taste of a range of wines from the 2012 vintage.

It's a particularly important time for the industry as prospective buyers visit the region to form first impressions and assess the quality of the vintage at the commencement of the 2012 wines being offered en primeur. This is a key event in determining how these wines may perform as alternative investments.

Whilst sampling wines at some of France's finest chateaux might sound like an idyllic break, I can tell you that this was strictly business with serious work to be done on behalf of the Vin-X team. The information gleaned during these few days, will certainly impact on investment decisions made so getting as much detail on the vintage as possible was imperative.

What is clear from the tastings is that 2012, unlike the sublime vintages of 2009 and 2010, is going to be a complex year for investors. The region experienced a reduced harvest due to challenging climate conditions with a particularly dry August followed by an unusually wet picking season. Overall grape quantities were down a third, as chateaux sacrificed undeveloped grapes to salvage promising bunches.

The Merlot grape faired best but production volumes across the 2012 vintage has really suffered and in a market with a finite supply it means that there will be even greater demand for the outstanding wines of the year. Investors will have to do their research to identify the best opportunities of this challenging vintage.

I was fortune enough to visit a number of great chateaux including Cheval Blanc, Pavie, Angelus and Haut Brion, however my personal favourite was the tasting at Margaux. Earlier en primeur tastings this season have already flagged up stand-out wines including the ever reliable Lafite, Latour and Haut Brion, along with Cos, Leoville Poyferre, Palmer and Ducru Beaucaillou.

One of the most striking observations of the trip was that whilst the overall number of visitors to the tastings was down, more than a third of those who did attend were from the Far East. This could be perceived to be evidence of the continued growth in demand from consumers from China and other emerging economies in the region, as they becoming increasingly discerning regarding their wine choices. This love affair is expected to continue to grow with the population of high net worth investors, particularly from Asia Pacific, set to increase in future.

As with all vintages, value will be key and it will be interesting to observe the en primeur release prices, which we expect to be revealed within the next few weeks, to see whether or not chateaux suffering cash flow issues due to poor 2011 sales will opt to discount the 2012 vintage. My initial thoughts are that this is unlikely.

In comparison to the numbers of perfect score wines of the 2010 and 2009 vintages, 2012 will require wine investment teams to put in overtime to seek out the real gems and all prospective investors should keep a keen eye on the region over the coming months in a bid to pinpoint the wines which will offer real value.

It's widely believed that the 2012 vintage will be problematic for the ongoing sale of 2011. The big risk of the 2012's undercutting that of 2011 is that this would make the earlier vintage difficult to sell, forcing chateaux to tie up money in wine stocks for which there is little immediate demand.

Others argue that 2011's time will come and that chateaux must accept a need to store wines until this moment arises. Many vintages such as the 2004, 2006 and 2007 faced similar problems, yet all sold eventually when economic conditions changed.

My impression coming away from the chateaux last week was that with 2012, for the first time in more than ten years, Bordeaux is a buyers' market.

For more information please visit www.Vin-X.co.uk.

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