“Fine wine is one of the best performing asset classes of the
past 20 years”
Financial Times, July 2015
The term Old World refers to European releases and is primarily used when referring to French wine. Wines from Burgundy, Rhône and Champagne along with a select group of Italian, ‘Super Tuscan’ wines have a following that has allowed for an impressive performance. In 2014 a ‘super lot’ of 114 bottles of Romanee-Conti from Domaine de la Romanee-Conti sold for HK$12.6m. In Sotheby’s first autumn auction of 2015 in New York, they made US$4.8m in the two days with one of the standout wines being from Rhône, with a twelve bottle case of 1978 Hermitage La Chapelle, Paul Jaboulet Aine selling for over $17,000. Yet from the perspective of building a wine portfolio for investment the most relevant region by far has to be Bordeaux.
“There is a finite number of bottles in existence, and for the best returns a medium to long-term view needs to be taken. As the wines mature and improve they also become rarer and more desirable – which drives prices even higher.”
The Daily Telegraph, January 2015
A tier system was created in 1855 for Napoleon III, with wines from this region being classified into growths from 1 to 5 with strict Appellation d’Origine Contrôlée (AOC) laws of 1936 governing the acreage used by these classified châteaux. This has kept output unchanged and to a minimum. These limitations on production and the ongoing quest for perfection from the top châteaux mean that it is commonplace to only see 30-40% of the crop used to produce their premier wine, or ‘Grand Vin’. The First Growth wines or Premier Cru have remained unchanged with the exception of one addition in 1973 of Château Mouton Rothschild, promoted from a Second Growth to a First Growth wine. The original First Growth Châteaux are Lafite Rothschild, Latour, Margaux and Haut Brion.
New World wine is a general definition of a product hailing from outside of Europe with Australia and America producing some standout wines. South Australia and California produce a small quantity of exceptional wines and these products are differentiated from their French counterparts by virtue of their earlier maturity dates and lower production levels.
In the majority of cases, top-end wines from these areas start to mature within five to eight years, an average of ten years before their French equivalent. These wines are also made in significantly smaller quantities than the French products that in themselves are produced in finite quantities. With some New World wines being produced in volumes of no more than 250 cases per vintage, it’s not hard to understand why many of these wines have generated a devout following.
Traditionally, French wine has always been seen as superior to its competitors from the New World in terms of quality but with leading wine critic, Robert Parker Jr’s grading system eradicating any bias or conjecture, all wines are now judged on their merits. The bottle price of top New World wines also compares very favourably with the Old World and brings with it exciting potential for growth. With many of these wines produced from vines nearing 200 years in age and tested over time, Cult & Boutique offers clients the opportunity to build a healthy spread of the best wines from both the New and Old World.