Performance The chart below documents each of the twenty wines recommended by APM during the course of 2009. The 'value now' figure is the average price for the various wines as reported on Liv-ex at the time of composition. Liv-ex draws market feed information from dozens of leading merchants, brokers & auction houses. Kindly note that this figure is for general guidance only and dependant on the method of sale the realised sum could be significantly lower. 
APM is risk averse when it comes to New World wines due to narrow exit markets and lack of clarity in pricing. To date APM has not promoted the wines of any New World estate. Market Summary The wine market is exiting 2009 in rude health. Trading remains strong with Novembers traded volume on Liv-ex up some 27% compared to this time last year and 6 % up over the previous month. The year, though, has very much belonged to Lafite-Rothschild which as a result of being the darling of the Chinese buyer has blazed the trail. Lafite was by a head & shoulders the most traded wine in the world this year - representing an astonishing 23% of trades on Liv-ex - and its wines have increased in value on average 26.6%. Many offerings have realised over 40%. However, we leave the year on a rather broader base of trading. In October Liv-ex reported that Lafite had been usurped from the number one spot by stable mate and near neighbour Mouton-Rothschild. Indeed many Chinese buyers have been noted switching their affections to the spirited underdog as prices for Lafite become prohibitive.
Latour moved to the number two spot, and mighty Ptrus (for which trading had previously been relatively quiet) leapt to third. Notably high trading in DRC meant that Burgundy showed double figure growth in November for the first time since 2005. The major trend of the year has been the emergence of China as a dominant and significant force in fine wine. China is now the sixth largest consumer in the world (equating to 10% of the international market) with consumption continuing to increase at a staggering rate. The amount of imported wine being drunk is increasing at a rate of around 125% per annum. Just 15 years ago the amount of imported wine was virtually zero. The scope for the future as Chinas economy and her taste for wine continue to grow is mind boggling: Current consumption whilst enormous on an international scale is miniscule on a per capita basis at just 0.31 litres per adult per annum; about 2 large glasses. In the UK we consume on average 27 litres each, and yet even this pales against Frances 60 litres (interestingly the Vatican leads the international chart at some 62 litres!). Of significance to the investor is that a disproportionate amount of the most expensive, exclusive wines from Bordeaux are being consumed in China. This is a direct result of staggering increases in wealth: In terms of the number of millionaires, China leap-frogged France in 2007, pipped the UK this year, and now sits only behind Germany, Japan and the US. In 2006 it didnt even make the top ten. According to the World Wealth Report compiled by Merrill Lynch and Cap Gemini, China & Asia will take the lead in wealth growth, surpassing North America by 2013.... spurred by increasing US consumer spending and the extension of the autonomy of the Chinese economy, already sparking a new increase in consumer demand". Notably, your average Chinese millionaire is considerably younger than his Brit counterpart - 39 and 56 respectively - and even your average Chinese billionaire comes in at a tender 49. These young, cash rich men (for the most part) are splashing out on conspicuous, high end luxury goods like never before, and in such an image conscious society, the big names in fine wine are most favoured, thus creating unprecedented levels of demand. Yet, it seems as these wines get ever more expensive, their appeal in China increases further - bad for the consumer, perhaps, but very helpful for the investor. Looking forward to 2010 The key question is whether the tremendous growth seen in 2009 can be sustained next year. Certainly the correction effect experienced after the market dropped so swiftly and dramatically in the panic of late 08 has run its course, and the significance of the exit of Diageo Chateaux & Estates (part of the largest drinks company in the world) from the Bordeaux market requires consideration. D C&E are selling off their entire stock-pile of fine Bordeaux - allegedly worth as much as US$200m - and rumours abound of a negative impact on US retail prices. However, the ripples have yet to reach our side of the pond, and in a market now worth over $3 billion per annum internationally, the fall-out is unlikely to be significant or long lasting. Of greater importance is the key question as to why D C&E have taken this decision, and on closer inspection it would seem to be an individual strategic move in reaction to challenging conditions in the entry level drinks market.There is no evidence to suggest that D C&E takes a pessimistic view on the fine wine market. Conversely there are many reasons to be optimistic about 2010. Demand from China (by a considerable margin the most influential factor on todays wine market) continues to grow exponentially, and as the economies of Europe and North America move back into growth it is reasonable to expect increased demand from the traditional markets. It is only a short year since the market was in relative chaos, and despite the apparent challenge of a global recession, the market has demonstrated just how robust it is. In fact, Liv-ex experienced a record year with transactions up 20% on 2008. At APM we have noticed investor confidence increasing now on a monthly basis. Sales for November - our most successful month by far - were up 36% on the previous month and some 900% from the same point six months ago. Our experience would indicate that we are not only looking at a healthy year in 2010, but perhaps a bumper one. Finally, 2009 En Primeur; to buy or not to buy? We have achieved tremendous results this year for our customers with 2008 En Primeur wines, so a hot topic of debate is whether such success may be repeated with 09s, which will be released next summer. Certainly prima facie things look good. Heralded as the finest vintage of the century (an overused statement we accept, but early indications suggest that this time the prediction is accurate), interest has rarely been more acute. However, it is important to remember that the success (for investors, at least) of the 08 campaign was down to modest release prices from the Chteaux and a last minute surprise triumph for the quality of the vintage. There will be no such surprises for the 09s, and having kept prices low for 06, 07 and 08, and it unlikely that the Bordelaise will miss the opportunity to hike prices significantly. Many experts predict a return to the release price of the 05 campaign, and at this level investors would be wise to be cautious. In fact, with the basket cost of First Growths converted to GBP at todays rather unhelpful exchange rate, only the 82, 00 & 05 vintages would be showing a profit. We are monitoring closely.| welcome to Insurances.net (https://www.insurances.net) | Powered by Discuz! 5.5.0 | (php7, mysql8 recode on 2018) |