I haven’t seen any official data for October yet but based on our trades, my feeling is that Fine Wine is doing pretty well.

For a very welcome change, it’s not Lafite or its siblings that have been driving demand. Prices for Lafite have been stable in the last few weeks and the physically available vintages of Carruades have actually softened in price, while volume traded has significantly declined. Looking beyond Lafite, demand has been healthy and quite widespread: not just Asia, but a lot of UK trade, investors and private customers are buying. As a consequence, prices have generally increased. This is true for the trade and especially for auctions, who have seen some stellar sales and "sale-through" rates. Every auction that is currently held boasts very good sales and prices.

Whilst prices on the whole have increased, there is one vintage and one Chateau that have attracted particularly high attention: 2008 and Mouton.

From our own experience, we have seen a lot of demand for 2008 Bordeaux, quite a step up from previous months. Particularly for Lafite, Latour, Mouton, Ausone  and Petrus. On the surface of it, this is rather puzzling, seeing that these wines had already increased a lot since primeur. Take Lafite: first traded at roughly GBP 1,500 and post Parker at GBP 3,000. There it stayed for a while but in the last 2 months it has gone up to as much as GBP 4,500. Latour sees a similar development. It looks like investors take the view that Parker was right in praising 2008 so high and that therefore, the top scoring 2008’s still have some upward potential.

Mouton Rothschild merits some extra attention. I have mentioned before that Mouton might be the next in line to benefit from the extreme demand for Lafite. I was not the only one who predicted this. Perhaps it’s a self fullling prophecy because we now indeed see Mouton really take off.

In the last say 20 years, Mouton has been underperforming – in both scores and prices - when compared to its First Growth peers. Partly because, ever since 1986, Robert Parker didn’t particularly like it and partly because Mouton did indeed go through a rough patch. That might have changed with the 2006 vintage (the wine of the year with 98+ points from Parker). Baroness Philippine de Rothschild – the proprietor of Mouton – has really upped their game and invested a lot of money and knowledge into making a top wine once again.

On top of that, there’s sentiment. Again, there has been a widespread expectation of Mouton being the first one to follow in the footsteps of Lafite. Mouton is getting increasingly "hot". Whereas for the last few months, there was just talk about this potentially happening, the last 2-3 weeks have seen the prospect actually become reality: prices of Mouton are going up fast. Particularly the 1982 and 1986 – both 100 pointers – but also 1995, 1996, 1998 and indeed the cheaper, more recent vintages. Demand is there and vendors are not keen to sell so prices are on the up. Interestingly, demand for Mouton is not just coming from Asia. Rather, there are a lot of investors piling into Mouton, anticipating an increased demand from Asia. There’s heavy buying of the top scoring Moutons and on the back of it, vintages like 1996, 1998, 2001, 2003, 2004 and of course 2006.

I must say that it’s a very welcome change after the frenzy for Lafite and nothing but Lafite. It was getting both boring and unsustainable. Obviously, it’s very healthy for the market in Bordeaux Grand Cru Classes that there are more flavours than just Lafite. It also shows that Asian demand is getting more mature, inevitably leading to increased attention for other top wines. Mind you, Lafite is still top dog, but slowly other contendors are taking the stage.

One final thought: If Lafite would no longer be the "primus inter paris" of the First Growths, will this lead to a) Lafite becoming cheaper or b) the other First Growths going up in price?  Another question: after Lafite and Mouton, which remaining First Growth will be next in line to become the "new flavour"? Is it c) Latour, d) Margaux or e) Haut Brion?

My answers are b) and c). But that's just my opinion. I'd love to hear your thoughts or indeed any other feedback. Please let us know by sending an email to info@dittonwinetraders.co.uk

At least, that's what the consensus seems to be.

I know, it sounds pretty incredulous doesn't it? After all, every year we get these reports. Definitely from Bordeaux and sometimes from elsewhere as well. If not "great" or "the best since 19xx", then the vintage is at least "classic". So why should we believe the first reports on this vintage?

Well, for starters, pretty much all the critics as well as the wine trade – who have an interest in playing down the quality in order to keep prices down – seem to agree that weather conditions have been perfect. Until about 2 weeks ago, there was even a risk in some Bordeaux areas, of the grapes being overcooked - not unlike 2003. But then, just at the right moment, the rain came and generally in the needed amounts. By now, all the Merlot has been picked and the Cabernet Sauvignon should just about have been secured as well.

The quality of the grapes is dependent on a lot of things and the most variable and uncontrollable of them must be the weather. Looking at the top estates, those who have the financial means, the knowledge and the incentive to produce the best possible grapes - every year - the weather might be the only variable. 

So, let's have a look at the weather. I found this very refreshing article, which I haven taken from the website of Jancis Robinson, that just states the naked facts. Judging by these facts, conditions have indeed been very favourable if not exceptional. Whether that translates into superb wines depends on the individual winemaker, as Decanter points out: there seems to be a risk of over-extraction (although that might have subsided to some extent by the rain that has fallen since that article was written).

Well well. Another fantastic vintage? After 2000 (general consensus), 2003 (at least in the eyes of Robert Parker), 2005 (everybody agrees, including Parker although his scores don't match the rhetoric), 2008 (just Mr Parker, with skyhigh scores), yet another superlative vintage?

I'm not going to get involved in the debate over whether this is or isn't a good vintage. Other people are much better at that. After all, is anybody going to be influenced by reading the scores of Mark Schuringa?

What I will do is share with you -on this blog - the views of wine critics that do matter. And the trade. So you can be as well informed as you possibly can be, from an insiders point of view. And I'll also add some thoughts on pricing and buying opportunities, in due course.

Let's have an early peak at pricing. Although it's very early days, I thought you should be aware of this: the 2009 top Chateaux are already being sold! Prices obviously have not been released, allocations have not been secured, but already some customers want to buy. Not at any price, but they are willing to lock in at 2005 pricelevels (...!). Why? To make sure they actually get an allocation of a vintage that could indeed be superlative.

It's October and the En Primeur 2009, in a quite creative way, has started.

Today, the UK stock market (FTSE) closed at a one year high – its highest point since September 2008. Since the bottom was reached in March this year, the FTSE has gone up by 44%.

At the end of last month, the Liv-ex 100 - widely regarded as the most reliable gauge for the Fine Wine market – was up 12.2% year-to-date although still down 9% on last year. From the bottom in December last year, it has gained 15%.

What is going on here? Surely the world hasn’t changed that much since the financial world was imploding last year to warrant such a rebound ? Or has it? The real economy is still reeling from what happened. Unemployment is very high and rising. Production is still low with massive overcapacity so any investments in increasing it are not likely. Governments around the world are facing massive debts that have to be somehow repaid. Consumers are laying low, either because they just don’t have the money or because it has become unfashionable to be seen spending.

So why, if the real economy is struggling, are wine and shares going up?

I think because for starters, these 2 markets don’t have much correlation to the real economy. Of course, stock markets look at corporate earnings, which are partly dependent on spending habits of the public at large. For another part though, these indices are made up of a lot of companies that don’t have an intimate relation with the real economy. I’m thinking of banks and companies involved in commodities, who I’m sure make up a significant portion of any stock market. And these sectors seem to be doing rather well.

Fine Wine is even less correlated to mass spending habits. Especially the top wines from Bordeaux. These are either bought and consumed by people who had and still have lots of money, or they are being purchased for investment reasons.

There is an astonishing amount of cash looking to make a return. Interest rates are far too low to attract this money so it has to go elsewhere. The point I would like to make is this: in order for this money to be at work, in the stock- or wine market – there needs to be a relative stable and certain investment climate. After all, the main reason why both markets went down so much is uncertainty.

At the moment though, there seems to be relative consensus over the immediate future of the economy: it will be hard for several years to come and any upturn is likely to be small, but at least there doesn’t seem to be a substantial risk of things going haywire anymore. If the major obstacle of uncertainty is largely out of play, focus will once again turn to making rather than protecting money. And as said: there’s lots of it that need to make a return. Given the fact that both stocks and wine still are well below their alltime highs, it might not be such a strange thing that all this cash is piling in again.

Having said that, I still experience a nagging feeling of unease. It has all gone up a bit too quickly for comfort, I feel. Stock markets have a habit of fluctuating and I feel a correction is due. Focussing on the Wine Market, there are 2 elements that contribute to that unease. The first one is that the wider Wine Market, beyond the most coveted wines, is not moving up. The second element is that the increase in the Liv-ex 100, is for 75% due to Lafite Rothschild. Not the typical top 8 investment wines, just Lafite. Moreover, that 75% is not just due to one Chateau, it’s carried by demand from just one, albeit massively big, country.

What is encouraging though is the fact that a good number of Wine Investment Funds are buying, and not just Lafite.

The conclusion? I don’t know. There are enough fundamentals to support the Fine Wine market: loads of cash waiting to be employed, no feeling of major economic uncertainty around the corner, vast demand from a massive and growing new wine market and the fundamentals of Fine Wine are unchanged (ever diminishing supply has to drive up prices as long as demand is there). What I would like to see though is a wider demand than just for Lafite and just from China in order for me to answer the question in the title with a resounding "true".

I must have been boring you to death will all my talk about Lafite. I have also speculated on the next in line to Lafite. A wine that, possibly, will enjoy some of the demand that we see for Lafite, given that at some point in time quality might catch up with status. Or, failing that, a wine that will somehow – at least from an Asian perspective - will start to become "the next best First Growth after Lafite".

Well, I think it’s about the right time to wager a bet on that: I think it will be Mouton Rothschild.

Why? Because, recently there have been some significant developments in demand and prices of Mouton, where the other First Growths - bar Lafite of course – have not experienced a similar price increase.

Let’s start with the 1982 Mouton. This is a 100 Parker point scoring, iconic wine. Always has been. It traded at GBP 7,000 at the start of 2007. Now, you would have a hard time finding it below GBP 11,000. An astonishing return of 50% in just a few months.Why this jump? The other 100 point scoring First Growths – Lafite and Latour –  didn’t see such a move in price.

The reason, IMHO, is twofold: 1) Parker’s re-scoring of 1982 and 2) Mouton is hot.

Parker did revisted 1982. He downgraded Lafite to 97+. At GBP 25,000, this was the most expensive 1982 First Growth. Given the downgrade, it’s expected that other wines will be closing the gap – potentially even overtaking Lafite. Yet, GBP 25,000 for Lafite is quite a difference to the prices of Latour (GBP 13,000 and stable) and Mouton (GBP 11,000). Mouton having increased so much, this wine seems to be the one that is stepping in the void left by Lafite.

But this is just 1982. Hardly enough to validate my claim to Mouton being the next in line to Lafite. So let’s have a look at the other vintages.

The 1986 Mouton is the next 100 point scoring wine. It peaked at GBP 7,000 and was last traded at Liv-ex at GBP 5,000 (see below graph, courtesy Liv-ex). Current market price is around GBP 5,700. A nice return, but quite in line with the overall market so not really a case in point. At the same time though, does this make a good investment opportinity....?

To put some more flesh on the bones of my statement that Mouton will be the next in line to Lafite to experiece lofty prices increases, let’s look at some other vintages.

I see demand for the next best scoring vintages of Mouton, notably 1996, 1998, 2000 and 2006. This demand comes from investors most of all, but complemented by orders from our Asian customers. Most telling though is demand for "off – vintages" like 1999, 2001,2002, 2003 and 2004. After Lafite and Carruades, these are the most demanded by our customers.

More and more requests we get are for Mouton, in addition to Lafite. This of course drives up prices. Have a look at below graph for the Mouton 2004 (again, courtesy Liv-ex) to illustrate this:

After having dropped to an astonishingly low GBP 1,000 a case in January 2009, prices are now at the GBP 1,600 mark and rising. Unbelievably, still below the price of a case of Carruades de Lafite 2004 but at least rapidly closing the gap.

Now, above is by no means a thorough analysis of why Mouton Rothschild should merit your attention. Rather, it’s based on some facts on the one hand and some observations from our own trades on the other hand, meant to raise your attention to what we believe is a very interesting wine to follow.

Just very briefly and very much against my habit, I will tease you with four upcoming topics:

1 – Wine auctions are doing very well again. And 87% of all fine wine on auction is bought by Asian customers....

2 - Bordeaux 2009: an article in itself but for now, it’s even better than 2000 and 2005!

3 – Both the stock market and the Fine Wine market are booming -True or false?

4- Mouton Rothschild – the one to watch?

Watch this space!