Wine Investment Friday

This newsletter is designed to bridge the gap between trade and the investor. Each week we aim to help investors better understand the nuances of why some cases appreciate and some standstill. We will unpick the characteristics that construct financial potential to help your money work smarter.


This week we are analysing a bottle of:

La Romanee, Comte Liger Belair, 2016

We are looking to understand whether buying just a single £5,000 bottle of a truly exceptional wine offers comparable exposure to the same market as owning the whole case, or if this idea could simply leave you holding an expensive, illiquid unicorn.


Beneath the Label: 

While the Domaine has recently celebrated its 200th anniversary, the new vinous regime under Count Liger Belair is a mere 20 years young. As an Oenologist and Agri-Engineer, the Count has bought the estate into the 21st century. Successfully amalgamating legendary ancient terroir with modern-day techniques and ethos. 

Critic Score: 98 Points – Allen Meadows
The highest scoring La Romanee of the modern era, quite literally a high watermark from the modern era of winemaking. 

Region Rating: Cote de Nuits – 97T 
Frost and disease pressure during the growing season capped production ensuring this legendary iteration is even more scarce than usual.

Drinking Window: 2036+
There are still La Romanee from 1915 performing, so do not fret about lifetime, in fact, this will benefit from the age both financially and on the palate.

Production Volume: 300 cases
Just 0.8 of a Hectare potentially constituting some of the greatest “dirt” in the world producing just 12 barrels.

Summary:
By any measure, against any wine, from any era, this is not just good but entirely comparable. With a wine such as this, we are dealing in the realms of vinous mythology. It may seem silly or fantastical but how else can we justify £36,000 for a case so soon after release! It is the perfect storm of utter oenological brilliance and spectacular rarity. I frequently reiterate the importance of finding wines with genuine stand out quality and with this wine registering an intergenerational high watermark that box with has been ticked with indelible pen. 


“As long as man seeks to correct nature instead of listening to it, following it and helping it, he will be in the path of error”
C.L.B


Money Matters:

Brand Power: 96/100, rank 3rd in JF Tobias Brand Power Metric
In the last 20 years, this brand has elevated itself and now sits firmly within an iconic tier, amongst that of DRC and Leroy. The estate’s power and fame around the globe in the vinous community is undisputed.

Liquidity: 50%
This is a wine that even with an eye-wateringly high price tag, cases are snapped up by investors and collectors.

Inter-Trade Price Volatility: n/a
As is the theme with Ultra high-end Burg’s Liv-Ex lacks the data to draw any conclusions. Instead below is the top Liger Belair wines ranked by Allen Meadows, we will reference these later.

Review Ranking:

Summary:
A point to consider here is that with a single bottle you would enjoy slightly differing financial drivers to that of the full case. A full case, while holding the full weight of brand power and rarity, also carries a significant financial barrier to entry shrinking liquidity comparatively to a single bottle. A single bottle grows the pool of potential buyer enormously, wine clubs, special occasions and so on, which serves to lower associated risk.


Position for Profit: 

From the table above we can see there are some recent vintages that we could use for a form of reference:
2016 – £36,000 per case / £4,800 per bottle
2015 – £30,000 per case / £5,000 per bottle
2014 – £23,100 per case / £4,000 per bottle
2008 – £23,100 per case / £3,800 per bottle
Now there are two caveats to mention. The first is that ’08, ’14 and ’15 are 97, not 98 points. While this may seem trivial, to the Burgophile looking to spend thousands on trying the very best, this will be of paramount importance. The second is that collectors like to buy “rockstar vintages”, those that are known for being outstanding. For Burgundy, this is ’10, ’09 and ’05:
2010 – £29,300 per case / £4,400 per bottle
2009 – £30,360 per case / £4,600 per bottle
2005 – £44,800 per case / £6,800 per bottle

There are a couple of conclusions we can suggest. The first, owning both a single bottle and even a case in the early years of trading constitutes an opportunity cost with low price action. The second is that there does appear to be an imperfect relationship between the bottle price and the growing case price suggesting the weight of a full case and the rarity that brings is significant. This is in fact consistent across the entire trade and all tiers of wine so while the wine is exceptional it appears to abide by this rule. As a result, we cannot suggest this to be a prudent use of capital. You are not going to lose money by any stretch, but there are far better options to be found with a full case within a £5K budget. 

The Author

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Jake Leighton