John Varley, the boss of Barclay’s Bank, has indicated that the availability of credit has to shrink. In an interview with the BBC, he says: "The amount of credit available is shrinking, it absolutely is, and that is a painful process, it’s a process through which the world absolutely has to go".
The pressure mounts. The Bordeaux Chateaux owners and Negociants are always asked to keep their En Primeur prices down, particularly by the UK trade, so nothing new there. However, for the 2008 campaign, there are many more voices that advocate this point of view.
Recently I was asked if Ditton Wine Traders "do" wine investment. The short answer was no, but we can give you some advice. When drafting the advice for this potential, first time investor in the fine wine market, I came to the conclusion that there are a lot of companies around that offer fancy brochures and services and undoubtedly do a very good job. The flipside of this is that you do pay for that. And in the end, you don't really need that. What you do need is some basic advice that will allow you to select the right wines and avoid some of the pitfalls.
Last Saturday, Christie’s held its first Hong Kong wine auction since 2001. After a series of disappointing results in recent auctions by other houses, it’s good to see that demand is still there. Christie’s fetched US $ 4m on a pre-sale estimate of US $ 3.2m with 94% of lots sold. That is a very encouraging result, no doubt helped by some very rare vintages of Latour, ex cellar, bought by Francois Pinault in 1993.
In a bid to boost demand, the Chancellor of the British Government has temporarily lowered the VAT rate from 17.5% to 15%. This of course only applies to duty paid wine. Whilst the drop in the VAT rate might help to increase demand for other goods, it won’t do any good for wine, champagne and port, as the excise duty rates are simultaniously increased as per below:
Duty per 9 litres:
Red & white wine
On their news website, the BBC have placed this article. We have been commenting on the recent price fall several times in this blog, so it comes as a bit of non-news. In the article though, Berry's uses the example of Lafite Rothschild 2005 falling in price from the high of gbp 10,000 to gbp 7,500. Interestingly, you can pick up this wine from Ditton Wine Traders for gbp 6,500 – proving our point that our prices are very difficult to beat.