Fine wine comment: Believe the hype

Unlike the 2005 vintage, yields in Bordeaux were not always high in 2009, which will no doubt lead to even higher prices. Miles Davis, partner at Wine Asset Managers considers the implications of the quantities made, in particular the impact of low production figures from Latour and Margaux.

Given the hype surrounding the 2009 vintage, we flew to Bordeaux at the end of April to see what all the fuss was about.  

As documented many times in the past, we don’t normally buy en primeur, but we are naturally interested in the impact such a vintage may have on the market as a whole, and we will one day be buyers in the secondary market.

What we discovered was not quite what we were expecting, but exciting nevertheless. Excellent vintages that have resulted from ideal weather and growing conditions tend to have high yields, such as 2005, because a high percentage of grapes make the grade for the grand vins, and the winemakers are less challenged.

This was not the case for 2009. The normal yield for the Médoc first growths is c.43 hectolitres per hectare (H/H). While Lafite and Haut-Brion both achieved the norm, Latour and Margaux reported significantly lower yields at c.35H/H.

Latour has produced less than 9,000 cases of its grand vin, and Margaux only 11,000 versus 14,000 in an average year. Lafite, on the other hand, has produced 20,000 cases of the grand vin, a typical year.

Also of interest were the exceptionally high tannin levels, with TPI readings of between 80 and 90, against a norm of 65-70 (TPI is the total polyphenols index, which measures tannin content).        
         
Putting this into context, we think that the low production numbers for Latour and Margaux may well lead to very high release prices from those châteaux. The high tannin content affords great ageing potential, and yet these wines were amazingly approachable at this early stage. They are therefore likely to appeal to drinkers and investors alike.

When the 2005s were released at what were considered astronomical prices at the time, the effect was positive on the back vintages (see chart, left). Not only did the older, scarcer and more mature vintages appear relatively cheap, but the fanfare surrounding the vintage aroused a general interest in fine wine.  

Something similar may well happen as a result of the 2009 vintage.  

Miles Davis, from the May 2010 issue of the drink business