Who, during a wine tasting or a dinner with friends, has not asked himself one day: “What is the most expensive wine in the world? Without much surprise and without any untimely chauvinism, it is indeed a French wine. A grand cru classé from Bordeaux? A vintage champagne? An exceptional sweet wine? Wrong. The most expensive nectar on the planet is the Romanée-Conti grand cru (red) from the eponymous estate in Burgundy, well known to insiders under the acronym DRC. More precisely, it is the 1945 vintage, auctioned at 482,000 euros on October 14, 2018 by Sotheby’s
This bottle with a stained label and an exorbitant price is one of 600 produced during this vintage that signed the end of the Second World War, just before the famous Burgundy estate tore up its vines and then replanted them. The last record for a standard bottle of wine (75 centiliters) was 201,000 euros for an 1869 Chateau Lafite Rothschild sold in Hong Kong in 2010. The same year, an imperial (6 liters) of Cheval Blanc 1947 was bought for 304,000 euros at an auction in Geneva.
Although many countries on the planet produce wine, the production of exceptional beverages is limited to a few territories. Cocorico, France has the lion’s share, placing 8 bottles in the top 10 of the prestigious Wine-Searcher ranking carried out in 2018 and 37 in a top 50 where 32 “pins” come from the Burgundy vineyards which, from Chablis to Mâconnais, offers an exceptional variety of white and red wines.
Among the other distinguished nations in this ranking are the United States with its astonishing Screaming Eagle, a Cabernet Sauvignon cultivated in the Napa Valley of California (18th position in the ranking), but also, more surprising for the uninitiated, our German neighbor, renowned for its sublime Rieslings, which manages to place 4 bottles in the ranking. To the ritual question: why are these wines so expensive, the answer is not surprising. Thierry Goddet, general manager of Cavissima, which manages online wine cellars for individuals, explains: “Over the years, wines have become scarcer. The great vintages gradually improve until they reach their peak. As tastings take place, stocks diminish. Eventually, supply can no longer keep up with demand and prices soar.”
According to specialists, there are now about 20 exceptional products that justify a price per bottle of more than 5,000 euros. “These wines are rare and exceptional in terms of quality, in each of their vintages. They are particularly expensive because they are produced in limited quantities, at the size of the vineyard, and therefore sought after by all the wealthy amateurs”, analyzes Angélique de Lencquesaing, managing director of iDealwine, the pioneer of wine auctions on the Internet in France. Like the 2009 vintage of this famous Romanée-Conti, sold at 16,578 euros in the first half of 2020 at an auction. Located in the Burgundian village of Vosne-Romanée, in the heart of the splendid Côte de Nuits, the prestigious estate of only 1.81 hectares produces barely 5,000 bottles in its best years. “To acquire one, like exceptional wines, you have to join a waiting list and wait many years to get a bottle,” says Angélique de Lencquesaing.
Beyond the pure pleasure of the wine lover, another question inevitably arises. Can one really earn money, or even get rich, by buying one or more prestigious bottles? The purchase price, the origin of the wine, the quality of the conservation, the decrease in stocks, these are the key factors that characterize the increase in value of a wine, swear the specialists of the sector. “The financial value of a wine can only be measured by its liquidity (1). To the amount invested in the wine are added storage, insurance and resale costs”, warns Thierry Goddet, who reminds us that price indices have increased by an average of 4 to 8% per year over the last twenty years.
“Of course, wine prices fluctuate up and down, but the volatility of this market is much less than that of the financial markets,” he notes. On his site, the average return on a vintage is 13% for 4.2 years of ownership. “Beware, past performance cannot prejudge future performance. Investing in wine involves risks of capital loss”. Moreover, the initial purpose of the investment may change. “Some of my clients thought they were going to drink their wines, but in the end they sold them because their tastes had changed. Others, on the other hand, wanted to invest in order to resell, and they finally decided to drink the wines they had put in the cellar,” he continues.
In any case, despite the economic crisis caused by the health crisis, the current situation, with negative interest rates and high volatility in the financial markets combined with the lack of perspective, is encouraging more and more individuals to seek out the wine “asset” because of its decorrelation from the markets. “Wine is considered a prestigious alternative investment just like works of art, vintage cars, or fine jewelry and watches. Investing in wine is a long-term investment that allows individuals to diversify their assets while enjoying themselves,” says Paul Perez, senior consultant at the Square consulting firm.
If they want to invest in wine, wine lovers have several options. They can either buy wine directly during the en primeur sales (2). Or they can go to their wine merchant or to the winemaker, taking into account the difficulty of approaching the great estates, without even mentioning the initial budget to be mobilized. Other possibilities: use cellar management companies (iDealwine, Cavissima, U’Wine) or funds specialized in wine (Ecce Vinum Capital, Uzès Grands Crus), mainly located in Luxembourg or London, which provide access to exceptional wines for an entry ticket of 125,000 euros. The nose on the Liv-ex Fine Wine 100, the reference index of the fine wine market, it is possible to follow the evolution of these precious bottles. “The Liv-ex Fine Wine 100 index has risen by 28.45% over the last five years, while the CAC 40 has only risen by 7.8% over the same period”, analyses Paul Perez.
Unlike other investments, investing in good bottles has the advantage of being able to consume them if the desired return is not achieved. By the way, what are the amateurs who invest in these exceptional wines, which can reach astronomical prices? “They are above all enthusiasts. They are in no way neophyte speculators, cold or calculating, looking for added value at any price,” underlines Angélique de Lencquesaing.
Our clients read the specialized guides and follow the advice of professional tasters. Of course, some of them are ready to spend irrational sums of money compared to their income.” “Our clients know how to read a label perfectly and have already made up their minds when they come to us to get all the information they need before investing in exceptional bottles,” confirms Thomas Hébrard, CEO and founder of U’Wine, a wine merchant company that “optimizes the cellars of private individuals around the world.
What if my wine is corked?
According to specialists, corky taste occurs only very rarely over the last 10 vintages. The molecule TCA, which causes this defect, has been known and identified for several years. “Cork stopper manufacturers perform very meticulous quality tests to avoid it,” explains Thierry Goddet, general manager of Cavissima, which manages online wine cellars for individuals. The quality processes of the winemakers are very meticulous, so this defect is usually avoided. If there is a problem, we find a solution with our customers (refund, change of the bottle). In ten years, this concern has only happened three times!”