The world’s top 10 most powerful fine wines

Once more, the drinks business has engaged Liv-ex – the global marketplace for the fine wine trade – to assess the world’s most powerful fine wine brands.

Domaine de la Romanée-Conti’s power cements the notion that Burgundies are the new darling of the fine wine trade.

And although each year yields different results, 2012’s survey is a marked departure from the usual Bordeaux-dominant list.

Notably, a quick scan over the tables, printed in full in the December edition of the drinks business (and November’s issue of the Hong Kong edition) attests to the rising demand for Burgundy, confirming the Asian collector’s thirst for famous growers along the Côte d’Or.

But the boost to Burgundy is not the only development – Right Bank Bordeaux also seems to be performing well.

Benefiting from high scores, scarcity, and, in the case of Pavie and Angélus, an upgrade in the St-Emilion reclassification, this area is seemingly en vogue.

Also conspicuous is the decline in power of the first growths. An increasing sense that these brands, particularly Lafite, are too costly in proportion to their peers has led to a significant price drop on the secondary market – a trend also witnessed among their second labels.

Meanwhile, demand has shifted towards lesser and cheaper châteaux deemed capable of making first growth quality wine.

Such interest has also extended into fine wine power brands from outside Bordeaux, particularly Italian regions Tuscany, and Piedmont, as well as the Northern Rhône, and Champagne.

In essence, the search for value has encouraged collectors to look more broadly.

Finally, there’s a bolt from blue this year: newcomer Clos Fourtet is 2012’s top performer in terms of price appreciation, and has entered the top 100 at number 55.

For the full list of 100 fine wine labels and their prices, production and scores, please refer to the December issue of the drinks business or contact our subscriptions department for a back issue.

Meanwhile, over the following pages we have brought you the top 10 most powerful fine wine brands of 2012.

It should also be noted for those new to this list, that the drinks business and Liv-ex have worked together on this project for the last seven years with the objective of ranking the world’s leading vinous labels using a range of criteria which, when combined, gauge brand power.

Although some measures are chosen to assess longer term performance, such as scores and average prices over the last five vintages, others are selected to assess current popularity, for example, price appreciation in the last 12 months, as well as quantity traded over the same period. Average production is also incorporated – because the perfect fine wine brand is widely available, as well as pricey and high scoring.

Click here to read the methodology in full.

10. Le Pin

Attesting to an increased interest among fine wine collectors in Right Bank Bordeaux, Le Pin, despite high prices, has entered the top 10.

Smallest of the 10 most powerful fine wine brands with just fewer than 600 cases produced each vintage on average, Le Pin’s strength stems from its high scores, high prices and relatively stable demand.

Le Pin’s new cellar

Indeed, despite turbulent times in the fine wine market, the tiny operation has enjoyed almost no price depreciation, partly due to its scarcity, but also the respect it commands among collectors.

Acquired by Jacques Thienpont in 1979, Le Pin is renowned for its age-worthy, scented 100% Merlot from some of Pomerol best vineyards.

The estate prides itself on manipulating the grapes as little as possible, and a new cellar was built in time for the 2011 harvest, which Fiona Morrison MW, wife of Le Pin owner Jacques Thienpont, said would give Le Pin even greater precision.

Speaking to the drinks business, Morrison said that the famous estate now had “the luxury of being able to divide 2.7 hectares into seven lots.”

As a result, she added, “I’m sure we will find more precision and details we haven’t found before”.

In late January, a case of Le Pin from the lesser 2007 vintage reached a new record when it traded on the Liv-ex exchange for £11,200 pounds, almost 90% higher than its price on April 1 2010.

A few facts:

• Pomerol’s Château Le Pin is usually referred to a just Le Pin.
• It comprises one 2.7 hectare contiguous vineyard surrounding the winery, which was rebuilt in 2011.
• Madame Laubie, whose family had owned the plot since 1924, sold the estate in 1979 to the Belgian Jacques Thienpont for 1 million francs.
• The property is called Le Pin after a pine tree that grows near the winery.

9. Château Lafite-Rothschild

Lafite has slipped from its position as the world’s most powerful fine wine brand in 2011 (as well as 2010 and 2009) to ninth place in 2012.

Although still the highest scoring first growth on average, Lafite’s change in fortunes stems from a sense the château has become too costly in proportion to its peers, precipitating a significant price drop on the secondary market last year.

Above all, its must-have status in Asia has suffered – China has been responsible both for the brand’s rapid price appreciation from 2009 to 2011, and last year’s 30% decline.

And just as Lafite’s rise to prominence in Asia was clouded by speculation, there’s no single reason for its fall from favour.

Simon Staples at Berry’s Bros & Rudd says his customers are put off by tales of fake Lafite on the Mainland, while others blame economic and political uncertainty in the run-up to the five-yearly Chinese National Party Congress.

A further possible reason is the reduction of excessive spending by government officials on luxury goods, a significant source of sales for fine wine and super-premium spirits.

Fashion is also a factor. “The Asian market works on trends – what’s hot and what’s not,” states Justin Gibbs at Liv-ex.

Lafite was en vogue, but interest his since broadened into other Bordeaux superbrands, while Domaine de la Romanée-Conti has the become vinous icon in China, although other Burgundian growers are growing in prominence, particularly particularly Ponsot, Rousseau, Roumier and Comte Vogüé.

However, Lafite has fallen, it’s felt, as far as it can. As Liv-ex researcher Jack Hibberd points out: “You are now seeing an off-vintage first growth at £250 a bottle, and at that price you wouldn’t feel guilty drinking it… My guess is that we are a long way down the road of the first growth correction.”

Certainly Lucas Robertson from Korean-owned Wine Networks, one of the largest buyers of Bordeaux worldwide, when asked for the focus of demand for his customers, tipped the first growths. “There is a definite resurgence in demand of the first growths in lesser vintages and for Lafite in all vintages.”

In short, a sense the price declines have now been stemmed and confidence is creeping back into the trade can only mean one thing: it’s a buyer’s market, even for Lafite.

A few facts:

• Lafite own one of the largest vineyards in the Médoc, with 107 hectares planted to vines in Pauillac.
• A total 35,000 cases annual average production is split between Château Lafite and second wine Carruades de Lafite.
• Lafite has been managed by Eric de Rothshild since 1974.
• The name Lafite comes from the Gascon word “la hite” which means “small hill”.

8. Château Latour

The most powerful first growth of 2012 was not Château Lafite for the first time since 2008, but the famously long-lived Latour.

While the first growths have seen price declines of up to a 60% depending on the vintage, Latour has been least-affected of the five, with an average performance drop of 12% (compared to over 30% for Lafite).

Of course it never benefited from the sudden must-have status of Lafite in Asia, and to a lesser extent Mouton, but there’s a sense Latour has retained much of its strength because it’s the first growth favourite among the trade.

“Latour has not been hit as hard,” says Simon Staples of Berry Bros & Rudd, speaking to the drinks business late last year.

Continuing he explains, “It’s considered more often than not the best [of the first growths]…. Latour is less likely to be dumped.”

Restricted supply has also helped – Latour’s owner, François Pinault has been gradually reducing the amount released en primeur since he bought the property in 1993, and, although the impact of the château’s decision to withdraw entirely from the futures market will not be seen until next year, the announcement earlier in 2012 precipitated an increase in trading.

Looking back over the seven years since Liv-ex and the drinks business have run the fine wine power list, Lafite has always led the first growths except in years of market turmoil – that is 2012 and 2008 – when Latour’s inherent strength sees it hold its prices while Lafite and others suffer declines.

7. Screaming Eagle

Cult Napa Valley Cabernet blend Screaming Eagle is the only non-French wine brand in the top 10 most powerful fine wines.

Credited for cementing the cult wine concept in the early 90s, Screaming Eagle has endured to become California’s ultimate collectible brand.

Proving its ongoing appeal, the brand was 2012’s highest new entrant in the Liv-ex Power 100 survey of the worlds 100 most powerful fine wines, and one of only a handful of non-Bordeaux brands that shot up the list as collectors diversified into other regions.

However, Screaming Eagle’s current general manager, Armand de Maigret, doesn’t like the term “cult”, and considers the estate to be a Napa “first growth”.

With the average price for a case of Screaming Eagle around £16,500 per case, only Pétrus ranks as more expensive among the top 10.

As previous analysis in the drinks business has shown, Screaming Eagle is mostly bought for investment, along with Harlan and the newly collectible Sine Qua Non from Santa Barbara.

“The Screaming Eagle phenomenon is not healthy. Very few people buy Screaming Eagle to drink it. It has become a pure instrument of speculation, which is sad, as it’s a great wine,” said Antonio Galloni from The Wine Advocate.

This explains the rapid price appreciation of the label after its first release, with Elin McCoy, Bloomberg’s wine critic estimating that at least a third of Screaming Eagle’s mailing list customers immediately flip their bottles on the secondary market – an act the estate is keen to nip in the bud.

Nevertheless, such a trade ensures eye-watering prices at auction, with a 75cl bottle of 100 Parker-point 1997 selling for £2,267 at Christie’s New York in April last year.

Despite or perhaps because of its high price tag, Screaming is doing well in China, favoured in wealthy circles for its rarity.

“The combination of money and early-curve interest that drives cult wines has migrated to Asia. China wants Screaming Eagle, Harlan and Colgin as much as they once wanted Lafite and Latour,” believes Jon Bonné, columnist for San Francisco Chronicle.

A few facts:

• Screaming Eagle founder, Jean Phillips, released her first vintage in 1992. Made by Heidi Peterson Barrett, the wine scooped a 99-point Parker score.
• With just 2,100 bottles produced, its scarcity led to unprecedented demand. Working across 20 hectares of Cabernet Sauvignon, Cabernet Franc and Merlot in Oakville, Napa Valley, production has increased since its early days, though it remains under a 1,000 cases a year.
• In 2006, Phillips received “an offer [she] couldn’t refuse,” from investment banker Charles Banks and property tycoon Stan Kroenke, and sold the winery for an estimated US$30m. Banks subsequently pulled out of the partnership in 2009, leaving Kroenke as the sole owner.
• The estate’s current general manager is Armand de Maigret.
• The current release price for Screaming Eagle hovers around US$750 a bottle, with a maximum allocation of three bottles a year for those on the mailing list.

6. Château Pétrus

Declared “the king” of wine investment by Anthony Hanson MW last year, Pétrus is not just one of the world’s most famous fine wine brands, but also a remarkably resilient one.

Although the high-priced label has seen some slide in prices, relative to its left bank competition, the first growths, it has performed well throughout the difficult 2012.

“It has yielded an average annual return of 14% all the way through bull and bear markets – it is incredibly dependable as a château,” says Hanson, referring to the prices fetched for Pétrus at auction over the last decade.

He adds that Pétrus has produced “so many great vintages from ’89 onwards,” and praised the property for creating wines of “purity and richness, and they are never dominated by new oak.”

“It is not modern winemaking technology that is driving that wine, which is why I believe it has been so dependable,” he concludes.

Liv-ex analysis later confirmed his suggestion Pétrus is a dependable investment brand.

“Looking at the CAGR (compound average annual return), recent Petrus vintages are averaging a 13.4% return, almost matching the 14% noted by Anthony Hanson MW,” Liv-ex noted.

A few facts:

• The vineyard of Pétrus covers 11.4 hectares in the eastern portion of Pomerol and is planted to 95% Merlot and 5% Cabernet Franc.
• The estate belongs to the Moueix family.
• There is no château on the estate, but two-storey country house.
• Christian Moueix is reputed to have said, “Pétrus doesn’t deserve the name château. It’s just an old farmhouse.”

5. Château Montrose

Montrose’s leap into the top ten most powerful fine wine brands is testament to the market’s search for value.

Like Pontet-Canet, Montrose is one of the highest scoring and cheapest wines among Bordeaux’s classed growths, and proves that the fine wine collector is looking for plenty of bang for their buck while times are tough.

Interestingly, the deuxième cru classé was not on Parker’s list of wines making first growth quality wine during his Magical 20 presentation in Hong Kong, but the château was awarded a perfect score by Parker for its 2009 vintage.

“Montrose and Pontet-Canet are solid drinking wines – they are affordable and high quality, and now have 100-point scores in 2009, which has a massive impact,” explains Justin Gibbs at Liv-ex.

A few facts:

• Montrose is a second growth château in Saint-Estèphe.
• Jean-Louis Charmolue sold Montrose in 2006 to Martin and Olivier Bouygues, owner of the construction firm Bouygues.
• It is located on a gravel knoll just 800 metres from the Gironde estuary.

4. Krug

Often described as the wine lovers’ Champagne, Krug is the only sparkler to make it into the top 10 fine wine power brands.

Benefitting from its rock-solid image, high scores and moderately high production, Krug has broken away from Cristal and Dom Pérignon in terms of price appreciation during 2012.

Nevertheless, prestige cuvée Champagne as a whole performed well in 2012 as merchants declared the likes of Krug, Dom Pérignon and Cristal good value relative to the likes of top grower Burgundy or Right Bank Bordeaux.

Having pushed hard on the recent run of first-rate vintages from Champagne, the merchants have brought the region a new audience of fine wine collectors.

Furthermore, as Justin Gibbs at Liv-ex points out: “Champagne delivers a consistent five to 10% return [on investment] because it’s pretty much drunk the moment it’s released, and fairly recession proof.”

As previous drinks business analysis has shown, Champagne has avoided the peaks and troughs seen from blue chip still wine brands but has shown a slow and steady increase in price over the last decade.

Hence, it’s often seen as good defensive stock when times are tough. Indeed, it’s interesting to note that the last time Krug featured in the top 10 was in the 2008 fine wine power survey, which incorporated the market correction after the Lehmann Brothers collapse.

Moving back to today, it should be added that the market for Champagne has broadened from the big names. “It used to be just Krug, Cristal and Dom Pérignon, but this year we’ve traded a lot of Taittinger and Bollinger,” says Gibbs, noting in particular the success of Taittinger’s Comtes de Champagne 2002 vintage launch.

A few facts:

• Krug was established in 1843 by Johann-Joseph Krug and was kept in the family until the 60s when a major stake was sold to Rémy Cointreau. LVMH the bought Krug from Rémy Cointreau in 1999.
• The Krug lineup of wines currently includes:
• Grande Cuvée NV
• Rose NV
• Vintage bottling
• Clos du Mesnil vintage
• Clos d’Ambonnay vintage
• Krug Collection (a recently disgorged older vintage bottling

3. Château Pavie

Pavie was a standout performer in 2012, up 18 places to become the third most powerful fine wine brand.

Profiting from both a perfect score in 2009 and an upgrade to cru Classé A status in the recent St-Emilion reclassification (along with Angélus to join Cheval Blanc and Ausone), Pavie is now, officially, a Right Bank first growth.

“It’s no longer a bad boy, but firmly part of the establishment, and we do a lot of trade on Pavie,” comments Jack Hibberd at Liv-ex.

Continuing he adds: “In a year like this when there is volatility, you need consistency – a good brand, a good price and a good score.”

The rise of Pavie, like Pontet-Canet above it, and Montrose below, also signals an increasing demand for more affordable labels.

Pavie has also been the subject of sustained investment in the vineyard and cellar since the rich retailer Gérard Perse bought the château in 1998, having previously purchased Monbousquet and then Pavie-Decesse.

It was also famously the source of disagreement between the wine world’s two most famous critics: Jancis Robinson MW and Robert Parker. Robinson described the 2003 vintage as “reminiscent of a late-harvest Zinfandel” while Parker rated it highly, commenting, “A brilliant effort, it, along with Ausone and Pétrus, is one of the three greatest offerings of the right bank in 2003.”

A few facts:

• Château Pavie lies on the plateau to the southeast of the St Emilion village.
• In 2012 it was upgraded to the first rank of the Classification of Saint-Émilion becoming a Premier Grand Cru Classé (A) having been a Premier Grand Cru Classé (B) since 1954.
• Gérard Perse bought the château in 1998 for US$31 million from Jean-Paul Valette.
• Perse invested in vineyard improvements and hired wine consultant Michel Rolland.
• The estate takes its name from a peach orchard which once stood on the site.

2. Château Pontet-Canet

The position of Pontet-Canet as the world’s second most powerful fine wine brand is a highly impressive achievement for the fifth-growth château.

And Justin Gibbs, director at Liv-ex believes that it still hasn’t reached its performance peak.

“It looks extraordinary up there at number two, but worthy, and what stands out is that it remains possibly undervalued,” he comments.

Continuing he says, “It’s the cheapest wine in the top 25, and the third best ranking in Bordeaux – it’s only outscored by Ausone and Lafite – and yet it’s 84th in terms of price.”

Adding to the praise for this property, Jack Hibberd from Liv-ex says: “It’s the superbrand that every wine collector has in their cellar and there isn’t a wine writer in the world that doesn’t think Pontet-Canet is good.”

It’s also part of a trend which began to emerge last year – as the firsts and their second labels began to lose lustre, the so-called super seconds and flying fifths have picked up.

In particular, it’s Parker’s Magical 20 which have hogged the limelight (a list of labels on which Pontet-Canet features). These are wines featured by the famous critic at late 2011’s Wine Future conference in Hong Kong, and described as making wine of “first growth quality”.

Summing up Pontet-Canet impressive performance, the fine wine trading platform points out that its share of trade on Liv-ex has risen from 0.6% in 2009 to 2.99% in 2012 and its average score from 94.10 to 96.31 over the same period. During this time it has seen its average price increase from £471 per case to £941 – yet it is still the most inexpensive wine not just in the top 10, but top 25 most powerful fine wine brands.

A few facts:

• Pontet Canet is a fifth-growth château in Pauillac.
• In 1975, Herman Cruse sold Ponet-Canet to Cognac merchant Guy Tesseron, owner of Château Lafon-Rochet in Saint-Estèphe.
• Today it is run by Alfred Tesseron with his niece Melanie Tesseron.
• Like Domaine de la Romanée-Conti, Pontet Canet is farmed biodynamically.

1. Domaine de la Romanée-Conti

2012’s most powerful fine wine brand – Domaine de la Romanée-Conti – cements the notion that Burgundies are the new darling of the fine wine trade.

Described as “the ultimate rich man’s wine”, DRC has moved from fifth place in 2011 to its number one slot for the twelve months to the end of last year.

Although it hasn’t seen price increases during 2012, it has benefited from the first growth’s fall from favour – Lafite, Mouton, Haut-Brion and Latour sat above it last year.

As Jack Hibberd, head of data and research at Liv-ex says: “The key thing is that the firsts have fallen in price and so they have less power in the market now. Two years ago it was all about the firsts, now they are one of many.”

Essentially, DRC shows greater stability through tough times, so when Bordeaux has a bad year, DRC retains its strength.

Drawing advantage from consistent high prices as well as relatively large volumes, it comes second only to Dom Pérignon in terms of weighted production (Dom Pérignon’s average 150,000 case output yields a weighted production figure of almost £150 million, some £30m more than DRC).

In fact, DRC amounts to just over 7,000 cases in total, even if its most expensive variant, Romanée-Conti, accounts for just 500 of those.

Notably, the last time the Liv-ex Power 100 saw DRC top the table was in 2008 – a survey that reflected the fine wine market correction after the Lehman Brothers crash.

A few facts:

• Domaine de la Romanée-Conti is co-owned by the de Villaine and Leroy/Roch families
• The Domaine is currently run by Aubert de Villaine and Henri-Frederic Roch and it is farmed biodynamically.
• Domaine de la Romanée-Conti comprises:
• La Romanée Conti (average production: 450 cases)
• La Tâche (average production: 1870 cases)
• Richebourg (average production: 1000 cases)
• Romanée St Vivant (average production: 1500 cases)
• Grands Echezeaux (average production: 1150 cases)
• Echezeaux (average production: 1340 cases)
• Le Montrachet (average production: 250 cases)

And finally…

The Liv-ex Power 100 has been compiled since 2006. Here is a look at the top 10 most powerful brands each year since the survey’s inception:

Source: Liv-ex.com

Liv-ex Power 100: Methodology

Liv-ex and db have worked together on the Liv-ex Power 100 for seven years

A list of all trades on the Liv-ex Fine Wine Exchange from the last year (August to August) were generated, and from that we identified a basket of 180 brands. These were then ranked in order of how much monetary value total trade had occurred on the exchange in the last year (Ranking 1).

Where the brand is a grower, we then identified a basket of their most famous wines, which we used for all subsequent calculations. We also identified the five most recent vintages for each wine available in the marketplace. For Bordeaux, the vintages used were 2006-2011. For other regions this was done on an individual basis.

We then calculated the average score from Robert Parker for each brand for the last five vintages available in the marketplace, and ranked them from highest to lowest (Ranking 2). Where no Parker score was available we used scores from The Wine Spectator. For Burgundy wines Allen Meadows’ (Burghound) scores were used.

We calculated the current average best price based on merchants’ price lists for each brand for the last five vintages (Ranking 3).

To measure performance, we calculated the average case price for each wine a year ago and compared it to its current price. We also modified the vintages used to ensure we were comparing like with like. The bigger the price increase, the higher the ranking (Ranking 4).

We then multiplied the current average price with an average production figure to get a production-weighted average price and ranked the brands according to this (Ranking 5).

Finally, we totalled up the rank number of each brand for all five components to get a score, the lower the score, the higher ranked the wine.

Where wines have the same score, the wine that scores better in the most categories is ranked higher.