At Chateau Latour in Pauillac, horses plough the vineyards just as they did in the 14th century, when vines were first grown on the estate.
But this is a recent return to tradition at Latour, one of the five renowned “premier grand crus” of Bordeaux, and it is based on sound commercial considerations rather than sentimentality.
Prices of fine wines have surged on the back of an explosion of interest from China and other Asian countries in recent years. Unable to increase production — land is limited and there can be only one harvest a year — Bordeaux’s leading producers focus relentlessly on quality.
The wines are picked and sorted by hand and the owners are investing heavily in winemaking techniques. The reintroduction of horses at Latour 18 months ago is part of that drive for quality — they plough with more precision than tractors and do far less damage to the soil and vines, some of which are 100 years old.
Fuelled by the seemingly insatiable Asian demand, the wine market is booming despite the continued difficulties of the global economy.
Prices plummeted in the wake of the Lehman Brothers collapse in 2008 but the setback was short-lived. In 2010, top-end bordeaux outperformed not just equities, but gold and crude oil too, according to Liv-ex, which tracks the prices of the top five Bordeaux chateaux.
Its Fine Wine 50 index rose by 57% last year, far outstripping gold (+35%), crude oil (+20%) and the FTSE 100 (+11%). This year so far, the Fine Wine 50 index is up just over 9%.
China last year overtook the United Kingdom and Germany to become the leading export market by value for Bordeaux wines. And the Chinese are not just buying bordeaux by the bottle and case but by the vineyard too — earlier this year, Cofco, the huge Chinese state-owned conglomerate and owner of the Great Wall wine brand, bought a 20-hectare estate, Chateau de Viaud, in Lalande de Pomerol. It is unlikely to be the last such deal.
Blazing an eastern trail
China’s growing influence on the global wine market was underlined last week when the wine bible Decanter published its Power List of the 50 most influential figures in the wine world.
Leading the pack was Pierre Pringuet, the chief executive of Pernod Ricard, owner of Mumm champagne, Perrier-Jouet and Jacob’s Creek, but shooting up from 20th to second place — and displacing the legendary wine critic Robert Parker in the process — was Eric de Roths-child of Domaines Barons de Roths-child, which has owned Chateau Lafite since 1868.
Rothschild won his elevation on the back of China’s passion for Chateau Lafite and the knock-on effect that is having on the industry, said Decanter editor Guy Woodward. “As the world’s premium producers blaze a trail east, it is in Lafite’s footsteps they tread,” he noted.
With limited supplies of Lafite and surging prices, other premier crus are increasingly in demand. In May, a single bottle of 1961 Chateau Latour sold to a Chinese buyer for £135?000 at Christie’s in Hong Kong, more than three times the expected price.
The decision by Chateau Latour, which is owned by the French businessman François Pinault, to release part of the Chateau’s treasured cellar was seen in the industry as an attempt to ramp up Asian interest in Latour as a rival to Lafite. The auction raised $7-million in total, with 95% of the lots exceeding their estimates.
Steep prices
Meanwhile the 2010 vintage, which is just being released en primeur (while a vintage is still in barrels, before it is bottled), looks like being another top-quality year. The 2009 bordeaux were hailed as the “vintage of the century” and there is every sign that 2010 is just as good.
Producers are currently in the process of announcing their prices and there have already been some steep increases — recently the price of Chateau Pontet-Canet was set at £88 a bottle — up almost 40% on its record 2009 price.
The huge increase did little to dampen demand, however — London-based fine-wine merchant Bordeaux Index sold out its supply within half an hour and other merchants reported enthusiastic interest despite the hefty increase.
Robert Parker, the world’s most influential wine critic, has warned of a speculative bubble in bordeaux prices and that the region, which he has done much to promote, is in danger of pricing itself out of the European market as it chases wealthy Asian buyers. Raising prices while the world economy was in such a fragile state was “a very dangerous game”, he said.
Not everyone agreed.
“There is no bordeaux bubble,” said Sam Gleave of Bordeaux Index. “There was a slight slowdown several months ago but that was what the market needed. People are drinking as much as ever and are realising that it’s worth looking at second growths from the better vintages.
“Second-growth quality now is as good as first growths were 15 or 20 years ago. As people’s palates become more educated, we expect to see buyers branching out into other areas, such as Burgundy and Rhône.”
Only a tiny proportion of global wine production — less than 1% — was considered investment grade and thus the surging prices at the top end would have little impact on the everyday wines sold by supermarkets and off-licences, Gleave said. “The only thing that really affects prices at the mass-produced end of the market is exchange rates.” —