I haved just returned from a trip to Shanghai. What a city. With 19 million people, it’s big and getting bigger rapidly. There’s building going on everywhere. From the moment you enter the immaculate, very modern airport, you can’t help but notice the sense of opportunity in the air. This place is booming. And the Shanghainese like to show it. For example, they have build the Maglev, a high-speed, elevated train that, suspended from the ground by magnetic fields, covers the 30 km to the airport in 7 minutes, reaching a top speed of 431 km/h.  The city struck me as very well organized, clean, buzzing with activity and full of people chasing their dream. In short, it's a very exciting place.

One of the things I was most interested in experiencing first hand is the alledgedly insatiable Chinese appetite for luxury brands. I can tell you,it's all true. The main shopping streets are about nothing else but the most famous brands. Whole malls are dedicated to them. Whilst China's middle class is still small and there are hordes of people that can't even afford half decent housing, there are also lots of people with a lot of money. Apparently 1 in every 1,700 Chinese is a millionaire. Out of 1.5 billion, that makes almost 1 million millionaires.

With wine, this translates into huge demand for those wines that have brand status. Almost invariably Bordeaux, these are not necessarily the best – they are the ones which have kudos attached to them. First and foremost Lafite and in its wake the other First Growths.

Lafite has a special status though. In China, deals don't just happen. They require a lot of hard work but they also need some "lubrication". And the lubricator of choice is Lafite, preferably of the great vintages. Westerners might think presenting your business partner, or indeed a government official, with a 40,000 pound case of 1982 Lafite as a present is outrageous. However, if that present will seal a 400 million pound deal it suddenly becomes good business...

On a more affordable level, there is huge demand for first growths and particularly for their second labels. Second labels are punching well above their (score) weight and have seen massive price increases. At the moment, it's Pavillon Rouge that's leading the charge. I could literally sell hundreds, if not thousands of cases if I had them. At the right price that is. Chinese customers might not think too much of buying and drinking hugely expensive bottles but they will never pay more than a fair and competitive price. And rightly so! Except in HK auction rooms of course...

There was also a wine fair on while I was in Shanhai. I managed to acquire some interesting leads but other than that it wasn't overly exciting. The one thing that really suprised me though that out of the 30 something booths, 3 were dedicated to fakes. Not a proper fake that would be hard to detect, but fakes where the original label is adulterated into something that vaguely resembles the original. You and I wouldn't fall for it, but I'm sure there a loads of people in inland China that do:

Trademark registration in China does very little to protect brand owners from this. Indeed, they show these fakes at an official wine fair! Apparently there is progress though. It's now possible to acquire "well-known trademark status" although only available to brands that are considered "truly famous". This prevents a third party from registering and using the same name or any similar word for commercial purposes in China. On top of that,there is now the possibility of acquiring a "geographical indication", imported Scotch whisky and Cognac being the first to have benefitted from this new, enhanced protection. Even so, fakes are still everywhere and pose a real threat to the wine business – as Jancis Robinson has eloquently as ever commented on. We often wonder about the amazing ride that top Bordeaux has had recently, fueled by the Chinese. Have we reached the top of the curve? Is it a bubble and if so, will it burst? Looking at the fundamentals and now having seen first hand how the Chinese think, I believe prices still have a long way to go. Probably the biggest threat to this happening though, is exactly these fakes.

Whilst second labels of the First Growth are popular now, I’m often asked what I think the next big thing is. So I asked the same question in Shanghai. The answer? Nobody really knows but l’Evangile, Cheval Blanc and Margaux were mentioned.

As promised, please see below for a quick update, a filling of the gaps since my last blog posts. A lot has happened...

The 2009 campaign revisited. Whilst the campaign itself was manic, the period immediately after was somewhat lacklustre. As expected. After the hyped up initial demand was satisfied and the summer recess kicked in, prices came down slightly. Please also see the Liv-ex blog for more information. Some wines however (Montrose, Pontet Canet, Poyferre, Lynch Bages, Pavillon Rouge, Forts de Latour to name a few) continued to see strong demand and the Lafite and Latour have been heavily traded again since the HK Lafite auction.

Prices and demand in general. Demand continues to be very strong. In addition to Asia, there is a massive uptake from European investors. Asian demand has been stable but it is remarkable how much (UK) investment money is flowing into the wine market. Consequently, prices are firming. See here for a chart. The First Growths and their second labels lead the way, but in their wake there a quite a few other wines appreciating rapidly as well.

Lafite 2008... Lafite have released the news they will emboss the Chinese symbol for 8, which stands for eternal blessings and good luck on the 2008 bottles. It looks stunning.

And sure enough, it provoked a frenzied run on the vintage. All merchants sold out in no time at the then price of around 9,000. Now, 1 week later, you will struggle to find it for less than 14,000 and the market seems to think it will hit 20,000 by the time it will become physically available (early 2011).

And therefore Mouton 2008, again. Mouton was the first to enjoy the rumour of the 2008 label being special i.e. designed by a Chinese artist. This news came out what must have been about a year ago and the price of Mouton 2008 went up. Then, people probably forgot about it as the price remained relatively stable. After what happened to Lafite 2008 though, Mouton 2008 is now red hot. In 2 days time, the price went up from 4,250 to 5,750 with hardly anybody offering.

HK Lafite auction. Just over a week ago, Sotheby’s has auctioned a large selection of Lafite wine, direct from the cellars of Lafite. The result was astonishing. Prices fetched were over twice the (then) market value. See the Decanter website for more info. Truly remarkable. And whilst HK auction prices are generally met with sceptiscism, this time around they caused a run on Lafite and prices – once more – surged. On a personal note, I can sort of understand why ex-chateau 1869 bottles fetch outrageous prices, because of the provenance. However, the 2009 vintage going for 43,000 pounds – over 3 times market value – is insane. After all, if I offer the 2009, it’s ex-chateau as well, isn’t it? Yet, it is the 2008 and 2009 that have seen most demand post auction. Some say though we Westerners should stop judging Chinese behaviour with our own values. The world works differently in China, according to Decanter again. Quite.

Indeed. Shame on me. I get so many calls and emails from people saying how much they enjoy this blog and yet I have found it difficult to update it regularly. The purpose of the blog has always been to keep you informed of the fine wine market. To provide you with information from within the wine trade. A no-nonsense approach without the aim of selling. I do enjoy writing these posts, I get a lot of pleasure out of the (very positive) feedback from readers and I'm sure it will, indirectly help the business grow.

At the same time, it's very time consuming and difficult to actually live up to the promise of keeping you informed. And I got told off by my marketing people... They say the content is great: highly informative and with a unusually direct and authoritive approach which customers will love. Moreover, they say, the wines you write about are actually available. In a market where scarcity rules, Ditton Wine Traders actually offer Lafite 2008, Mouton 2008, Lafite 2009, various vintages of Pavillon Rouge and Petit Mouton. And all at great prices. The only problem is that hardly anybody manages to find your website or blog, so what's the point? You need activity on your website in order for people to find it, they say.

Thirdly, with my blogposts I have to make a selection of news and developments that I think are most relevant and then voice my opinion on them. Whilst very meaningful, by nature this approach is also depriving you of lots of other information you might find very useful. Wouldn't it be nice if you would know that in visiting www.dittonwinetraders.co.uk you would have access to all of the most relevant information about the fine wine market and you could be confident you don't need to look anywhere else?

So, after thinking about the above, I have decided to take a new approach. I think you will be better served if I continue writing my personal views on this blog but add news to it. Selected, frequent, relevant news from a host of sources. Basically, sharing with you all the information we ourselves are getting. And by doing so, there will also be more people that will find the website, which in turn will allow us to keep our prices low.

As per the beginning of December, you will be able to find – on this website – daily, relevant news about the fine wine market, wine investment, the wine trade and the hottest picks. This will hopefully give you a proper overview of what's going on in the world of fine wine trading. I also intend to use social media, both as a source of news and as a platform to share it. So, watch this space.

In the meantime I have to fill in the 5 month gap in news and developments, which I will do in tomorrow's post.