At what price will ’08 Latour ‘work’?

Next week will usher in the now annual spring release of ex-cellar stock from Château Latour, the 2008 is expected to be offered but at what price will it ‘work’ – at least in theory?

This year is the the seventh since the Pauillac-based first growth announced it was quitting the en primeur system in favour of releasing stock at its own time and choosing back in 2012.

This year Liv-ex has reported that the 2008 grand vin and 2013 second label, Les Forts de Latour, are lined up for a re-release in the case of the ’08 and brand new release in the case of the Forts.

It was a similar situation last year when the château re-released the 2006 grand vin and then released the 2012 vintage of Forts for the very first time.

The appearance of the first ‘new’ Latour wine in six years led to a relatively enthusiastic response from buyers and collectors and it sold well.

The 2006 grand vin however suffered from the fate of many of the past releases, being offered at a substantial premium (16% in this case) to other 2006 Latour already in the secondary market.

Therefore, Liv-ex has asked, at what level should Latour price the 2008 in order for it to make buyers interested?

Using its ‘fair value’ methodology which correlates market prices with scores from The Wine Advocate, it’s clear from the graph (pictured below) that the 2008 vintage of Latour is currently plum on the line of what would be considered ‘fair’.

That is using the score last given to it back in 2011 by Robert Parker (95+) before he ceded Bordeaux tasting to Neal Martin.

Martin himself actually rated the wine 96 points when tasting the vintage 10 years on last year and by that score the wine is rather more comfortably inside the ‘fair value’ side of the line.

The 2008’s current market price is £4,559 per dozen. Gong on the strength of Parker’s last score a release at (for argument’s sake) £5,000 a case would represent a premium of almost 10%.

Going on Martin’s more recent score, £5,000 would (arguably) represent absolutely ‘fair value’ while still having a premium over the current market price.

Should the price begin to creep up and over £6,000 per 12 though and into the pricing realm of the 2005 vintage, then things might start to get a bit wobbly.

There almost certainly will be a premium and indeed an increase on the market price is not in-of-itself something that puts buyers off as collectors always have myriad reasons for buying.

The important thing is that the price looks compelling for the wine in question. The 2006 release largely failed because it’s not the most exciting of vintages and with a 16% premium to the market it looked too expensive.

The 2008 vintage is arguably one that the market as a whole smiles on more fondly, it is a more approachable vintage, has long been seen to represent ‘good value’ and due to its low release price has been one of the biggest earners for those who were able to buy en primeur.

As such a ‘reasonable’ premium up to and not much exceeding 10% would (possibly) be enough to generate some interest.

The situation in the UK at least is however complicated by the Damoclean spectre of Brexit.

Non-UK-based readers will probably be aware of the current turmoil in the British political landscape over this thorny issue but are likely as in the dark as even UK nationals are about what it could all possibly lead to.

That said, as professor Colin Hay lays out in a report on this topic on the drinks business today, both the Latour release and primeurs in general are falling at a less than propitious time for the UK market – which, lest we forget, remains an incredibly important buying block for Bordeaux futures.

The success of both Latour’s release and primeurs may depend on the British government securing a deal or failing to.

In the event of ‘no deal’ and an inevitable drop in sterling, it makes sense to buy something like a Latour release now and not later when it will be more expensive by about 15%.

If a deal is secured then the value of sterling may very well jump and it would therefore make more sense to buy later with the pound having more buying power.

Arguably, Latour’s releases are largely aimed at the buy-to-drink Asian market but here too a Brexit deal or no deal will have implications.

A no deal and weaker pound could make Asian buyers more open to buying Latour than the alternative scenario.

So there is a price at which Latour’s next release can work, without question, but what that price is and at what point to buy is, at least for UK buyers, much more difficult to say.