By Scott Reyburn
(Bloomberg News) Surging demand for Chateau Lafite and other French trophy labels, especially from Asia, has pushed both prices at auction and wine futures to records. Not all wine dealers are happy.
The prices for some of the most expensive bottles are starting to discourage even billionaire collectors, said dealers -- some of whom had warned in January of a bubble that could burst in 2011. Chinese and other buyers balked as some Bordeaux producers raised prices as much as 80 percent last month for the new vintage offered "en primeur," when it is still in barrels.
"En primeur sales have halved," Simon Staples, fine wine and marketing director of the London-based merchants Berry Bros & Rudd, said in an interview. "It's a combination of high prices and the fact that the chateaux released less than last year."
Sales growth is also slowing at auctions. Takings at the biggest three wine auction houses in the first six months of 2011 were up by 46 percent on the same period in 2010, according to Bloomberg calculations, down from the 88 percent sales increase in 2010.
The Liv-ex Fine Wine 50 index, tracking daily price movements of the 10 most recent vintages of Bordeaux's five First Growth chateaux, declined from 445.49 points on July 1 to 433.51 points on Aug. 2. The London-based index, based on trade sales, rose 136.67 points to 401.11 last year.
The future sale prices were boosted by scores of more than 90 for the vintage from the critic Robert Parker.
Futures Increase
Chateau Latour 2010 was released at 780 euros ($1,106) a bottle, a 30 percent increase on the also highly rated 2009 vintage. Chateau Ausone was pitched at 1,120 euros a bottle, 17 percent higher than last year. The 108 euros being charged for bottles of Carruades de Lafite -- the second wine of Chateau Lafite -- was a 59 percent increase.
Last year, Asian buyers snapped up a third of the Berry Bros. Bordeaux 2009 futures allocation. Only 5 percent of the merchant's 2010 wines have gone to the region, Staples said.
"The 2009 vintage was the first that attracted a lot of Chinese en primeur investment," said Staples. "They've seen it has really increased in value and have been put off by the prices of the 2010s. If it isn't in a bottle, they can't show it off to their friends."
Chinese consumers continue to spend millions on older vintages in bottles at specialist auctions. Sotheby's, Christie's International and Acker, Merrall & Condit took a record $258.3 million in wine sales in 2010, more than double 2009. About two-thirds of the most expensive lots were selling to Asian bidders, according to both Christie's and Acker.