A long face is almost de rigueur for anyone working in the London wine trade right now. There was a brief outbreak of optimism in the late spring and early summer when the 2009 Bordeaux were sold en primeur (many of them at high prices), but since then the business has crawled back into the dumps. VAT is going up in January, the pound is still in intensive care and there’s another duty increase due next year. As the recession continues to take chunks out of people’s wallets and purses, almost no one is prepared to pay more than £5 for a bottle of wine.
The contrast with Hong Kong, where I’ve spent most of the last week judging the Cathay Pacific International Wine & Spirit Competition, couldn’t be more obvious. Here nobody has any problem spending large amounts of money on wine. Walk through the back streets of Kowloon and there’s a good chance you’ll find an every day off-licence offering vino for the Hong Kong equivalent of hundreds and even thousands of pounds. Some of it may be fake, but who cares? If it’s got the right words on label, people are prepared to flash their plastic.
The point was rammed home with an echoing thud on the day I arrived. You might have read about the sale of ex-cellar Lafite conducted by Sotheby’s on October 29th, but it’s worth pausing for a second to take in its implications. The sale raised HK $65.5m and smashed all sorts of records. Most of the younger vintages sold for prices that were twice the market average, while the yet-to-be-bottled 2009 Lafite sold for a jaw-dropping £43,120. That’s for a case of 12 bottles, folks.
And while you’re still digesting that, the highlight of the sale was three bottles of 1869 Lafite, which pulverised the 25-year-old record for the highest price paid for a bottle of wine at auction into shards of claret-stained glass with a hammer price of £437,900. Unlike the 1787 “Jefferson” Lafitte (sic) which sold for £105,000 at Christie’s in 1985 and remains highly controversial, the 1869 Lafite comes from an unimpeachable source: the château itself. Will they replace one of them if it turns out be corked? It’s an intriguing thought.
The Lafite sale has had a substantive impact on the price of top claret generally and the price of Lafite in particular. But the bids were still crazy. I wasn’t at the auction, but people who were have spoken of the frenetic atmosphere in the room. Everyone knows that you should bid with ice in your heart and veins at a sale, but that doesn’t appear to have been the case here. Call it big dick syndrome, call it stupidity, but as one fine wine merchant, Doug Rumsam of Bordeaux Index, put it: “The bidders got caught up in the excitement of the auction and neither was willing to back down. These prices are not a reflection of the market place, but they demonstrate that in an auction house environment some people can have too much fun.” Their bank managers may not see it that way.
Is this just Lafite mania, well attested in Asia, or is it proof of what economists calls “the greater fool theory” (however crazy the prices, there’s always someone out there stupid enough to pay them)? I may be proved wrong, but I think we have reached the top of the curve here, or The Peak if you prefer. However much newly rich Chinese industrialists may value Lafite as a way of buying political favour, surely even they will baulk at paying £43,000 for a case of the excellent 2009?
I was thinking about the price of Lafite and the way the top Bordeaux châteaux are courting the Asian market when I sat down at the Cathay Pacific competition to judge a couple of Asian dishes with wine. My panel was asked to taste dim sum and abelone (at HK$100 a portion, no less) with more than 50 different bottles. Even with the meaty, almost mushroomy flavours of the abelone, tannic wines were totally inappropriate. Pinot Noir, Pinot Gris and Chardonnay were a much better bet. We found the same thing with the dim sum. Softer, more textured reds and whites worked best, while almost all the Merlot and Cabernet-based wines tasted awful.
This raises an interesting question. Do any of the people who are buying top notch claret for increasingly exorbitant prices in Hong Kong actually drink these wines with Asian food? Is the brand mightier than the disappointing dining experience that ensues? My guess is that they’re not bothered as long as they are seen to be drinking, or rather serving, a luxury brand. Where Asian food is concerned, we should leave them to it. Meanwhile, who’s for a glass of New Zealand Pinot Noir?
Tim
A great read. An extraordinary thing about the record-breaking price of almost £150,000 for each of the three bottles of Lafite 1869 is that the estimate per bottle was just £3200 to £5200, according to Jancis Robinson on her website. It’s good to know that some experts are as much in the dark about all this as the rest of us.
Perhaps the London trade wouldn’t have such long faces if the Coalition Government could breathe some life into the UK wine business, just as the authorities did in Hong Kong a short while ago by removing their punitive sales tax on wine.
Fat chance. But I think that’s what the UK wine trade needs. Otherwise it will cease to matter. First the US and now Hong Kong have challenged (and I think usurped) London’s postion at the centre of the wine world. One Hong Kong based expert told me that she had “predicted” the high prices, but I think that’s rubbish. NO ONE realised how silly the prices would get. But surely they are unsutainable? It’s only wine after all. A one off experience, however wonderful, unlike a car that you can drive every day, or a painting that you never tire of looking at. It’s time we realised that wine is a drink, not a vacuous status symbol. Do the First Growths get this? Answers on a blog post…..
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For a bit more amusement on the Asian obsession with Lafite, see http://www.artinfo.com/news/story/36219/wine-auction-at-sothebys-hong-kong-makes-history-as-a-barons-tipple-fetches-84-million/
too much dirty money and the need to show off
Agree with pretty much everything apart from one thing – don’t like the thought of Kiwi Pinot Noir, usually far too juicy and big for me!
Depends on the Pinot. Have you tried Ata Rangi, Churton, Neudorf? All lighter styles. But maybe I should have said Pinot Noir full stop.
There’s a story about a gut who meets a Russian of dubious origin; the Russian admires the man’s suit. “It’s Armani”, says the man, ” hand-made, it cost me £5,000!”.
“£5,000?” says the Russian, “Why, I could have got it for you at twice the price!!!”. If you don’t flaunt it, have you really got it?
Great line. It’s all about conspicuous consumption.
In defensive of my Hong Kong/Chinese buddies, high-priced wines are not just about showing off…they are also about respect. We serve these wines to our friends to show that we treasure and respect the friendships (and/or business relationships). We do actually drink the wines, not just display them!
No doubt the auction market is frighteningly over-heated, but auctions appeal to two cultural dynamics: we are very accustomed to the ‘fun’ of bidding (and overpaying) at charity auctions; competitive bidding offers the same adrenalin rush afforded by the horse races and gaming tables. Lafite’s a lot cheaper than a horse and offers higher probability of return.
Yes, that’s a good point, Debra. But isn’t there a fair amount of what economists call “signalling” going on in both cases. In other words, the host wants to show that he or she is the kind of person who can afford to pour Lafite. I still mantain that claret doesn’t really work with most Asian food….
We, Chinese do not flaunt…not anymore…
The Lafite bidder will probably drinking it with a Chateaubriand in a 6star hotel in Shanghai.
Most Turbo charged Clarets will only work with Wintery Chinese dishes. But matured Bordeaux and Chinese food provide orgasmic pleasure!
The whole wine industry is chasing the enthusiasm of 1/1,000,000,000+ Chinese. Does it make sense to spot light every Chinese person or brand it a Chinese?
Tim, I have just given you my Blog Virginity
Simon. I’m honoured!
There is a simple explanation for Lafite’s supernova prices in recent years. To paraphrase Robert Browning, the Chinese like whatever they look on, and their looks go everywhere. In China, everyone – or at least every billionaire – must have Lafite. But why Lafite?
Clearly, the Chinese adore Lafite. But it is less obvious why they are drawn to it like iron filings to a magnet. Apparently the name is memorable and easy to pronounce. Some suggest that the etched label is also an attraction; this might also at least partly explain the increasing interest in Duhart-Milon, Clerc-Milon and Beychevelle in the Far East.
Asians also appreciate some of the broader cultural implications of Lafite and other fine wines. They like the “invented tradition”, to use Eric Hobsbawm’s phrase, of fine claret. There is a nascent interest and understanding in China, or at least in Confuscianism, of what fine wine supposedly represents – balance, harmony (ho) and a sense of place, and that this ho comes from the unique conditions of a specific geographical site.
A Hong Kong wine merchant suggested to me that Lafite had appeared in one of Jackie Chan’s early films (Drunken Master, perhaps) but surely this is apocryphal.
Perhaps the greatest reason for Lafite’s success is its embrace of the free market economy. It releases its wines to the world – now (shrewdly) with an etched Chinese symbol on the bottle – and then lets the market do its work. By contrast Latour, which is arguably as great a wine and brand as Lafite, maintains a dirigiste regime and keeps a tight rein on its sales. Consequently it has had nowhere near as much impact in the Asian market.
Debra Meiburg is right to suggest that Hong Kong is “over-heated”. The current Asian wine market is like a queen bee fed on royal jelly. But caution is advised. The Hong Kong fine wine market is generating heat but it also generating light. It is becoming crowded and some people are already feeling the squeeze. Eventually there will be a shakeout.
Great blog, by the way – keep up the good work!
SDG
Maybe Margaux will be the next big thing for Asian wine lovers, it’s certainly easy to pronounce and definately more elegant than austere.