Fine wine profile: Beyond Bordeaux

As we’ve recorded in db before, the market for fine wine has become increasingly focused on the few. Not only has the source of new sales become concentrated in Hong Kong, but the demand appears to centre on just five wines – Bordeaux’s first growths – or for some, just one label: Château Lafite Rothschild.

This reflects the well-documented global shift eastwards in economic growth and the billionaire Asian consumer’s desire for luxury Western brands – which in fine wine are most obviously and easily found in Bordeaux. Leader is Lafite, and to an increasing extent, Mouton Rothschild – the Rolls Royce and Bentley of fine wine, offering consistency and, crucially, kudos. 

But there’s somewhere else that provides these important attributes. Not perhaps the accessibility but certainly the status and very pinnacle of vinous experiences. Yes, it’s Burgundy. 

Although it attracts headline bottle prices at auction, the fine wine stories of recent history have somewhat overlooked the likes of DRC and other grands crus. But that appears to be changing. 

As last month’s issue revealed (see the Liv-ex Power 100), top Burgundy is enjoying increasing levels of trade and consequently rising prices. Why is this? Are Asian tastes starting to broaden outside Bordeaux?

To find out more, we turned to Britain’s rather low-key Burgundy specialist, Turville Valley Wines. The small operation is renown for its ability to source mature grands crus wines from this complex region, and in particular, the rarest wines of all, those from DRC. 

Founder Michael Raffety, an ex-Sotheby’s auctioneer, explains. “We do sell a large amount of Domaine de la Romanée-Conti wines and have done for a number of years,” although he adds, “like most merchants, the majority of what we sell is Bordeaux because it is easier to get hold of and produced in much larger quantities.”

The difference in production between the two regions at the top end is marked. While a first growth Bordeaux will make, on average, around 20,000 cases each year, the entire DRC production is no more than 6,500 cases. 

It’s complicated

 

Nevertheless, Turville has built its reputation on its ability to source and sell these rarefied wines. And after years of handling DRC and other domaine-bottled Burgundy from the likes of Leflaive, Rousseau, de Vogüé and Ponsot, Raffety is well aware of the region’s drawbacks. “Burgundy is such a complicated area,” he begins. “Bordeaux is much simpler and it’s also more consistent – a bottle of Burgundy can be fantastic one week and disappointing the next.” 

Uneven maturation is an issue for Burgundy buyers. “The wines evolve, then close down,” he explains, although he also believes, “that makes them so interesting.” 

You see, for Raffety, and other passionate followers of this wine region’s top-end product, the unpredictability adds to the excitement. 

Continuing, he explains, “You don’t get the high points in Bordeaux you get in Burgundy. When you taste really good Burgundy it is just exceptional, but with Bordeaux you kind of know what to expect. For example, ’82 Mouton, you know how it’s going to taste, but La Tâche 1980 – although it’s not a great vintage in Burgundy – is fantastic, it surprises you.”

 

Then there’s the sheer number of producers, vineyards and marked variation in vintage quality. As for a commentator to guide, Allen Meadows (AKA Burghound), Raffety says, has the most influence. 

From a purely business perspective, however, the greatest drawback with Burgundy is that low level of production. “There are such small quantities and everyone is looking for the top end, making it even harder to find these wines. We are not the agent for DRC [Corney & Barrow is in the UK] and our allocation from them is pretty small so we buy semi-mature wines from private customers or other traders throughout Europe.

“There are people in the UK and Europe who offer us wines on a regular basis and we have customers all over the world looking for these wines. But, once you’ve sold one, it’s very hard to replace it.”

This is because, as Raffety points out, “Most buy Burgundy for consumption, while Bordeaux is much more for investment.”

The Burgundy drinker also tends to be “more fanatical”, records Raffety – they are passionate about the product – and very few are buying just for the label. 

 

However, the top wines “have now got so expensive the UK buyers have been priced out of the market”, he says. 

He recalls the release of 2005 Burgundy, when “a lot of the buyers who normally bought didn’t because prices had got so high, particularly for DRC, although some came back for 2006 which was more reasonable”. 

In terms of numbers, 2005 La Tâche, for example, was, at its peak, around £3,500 a bottle, but it has now come back to around £2,000. 

Prices have now stabilised, and Raffety doesn’t “foresee a burst bubble with DRC because the wines are in such short supply”. 

Also, Asia is increasingly looking for fine Burgundy. “Our principle buyers are Eastern merchants,” records Raffety, although, he adds, “the demand for DRC is certainly not as strong as two to three years ago.” This is a result of a decline in the significant volumes sold in Japan – a fine wine market that has “struggled more than anywhere else”, says Raffety, although it is “coming back a bit”.

Elsewhere in Asia, Raffety says, “Certainly the Hong Kong, China and Singapore markets are strong for Burgundy, led by Bordeaux.”

Up the Rhône

 

Beyond these two famous fine wine regions, Turville also counts the Rhône as a further specialism. And this area’s wines, Raffety says, “have got a lot more expensive” – Châteauneuf du Pape in particular. 

This he ascribes to “the Parker factor” (the region gets consistently high scores from the journalist) and the fact “they have changed the way they make the wines”. Explaining further, Raffety says, “In the past producers made one or two wines under their label but now there are a lot of special cuvées.

 

"They strip out a lot of highly extracted components to give a wine very high in fruit and abv.” These products meet a demand for fruit-driven wines and producers charge over £100 for the top cuvées, although the quantities are small.

 

Previously, recalls Raffety, a good Châteauneuf du Pape cost between £20 and £30, and he’s not convinced the pricier wines from the region are better for this new tiered approach. Referring to the top cuvées, Raffety comments, “For my palate they are too overbearing – but if these were added to the lesser wines it might create a more enjoyable blend.

“It would be like making a Château Latour  ‘Vielles Vignes’ of just 100 cases by stripping out the best barrels Latour could produce – but that would have an effect on the grand vin.”

 

Champagne is Turville’s final self-proclaimed area of expertise. Surely this has suffered since the economy began to recede? “Yes, we used to sell in particular a lot of magnums of Cristal into nightclubs in London and then we’d read about how it was sprayed across the place. That’s obviously not going on anymore and prices have come down – a lot of the increase in prices of Cristal, especially magnums and jeroboams, was down to demand and a resulting shortage.”

Globally, and across all fine wine sectors, Raffety sums up the market. “The market is still very driven by the Far East and it is quite narrow – the demand is for a relatively small number of wines. There is more demand for Mouton Rothschild, anything with the Rothschild name attached, and certainly these buyers are looking for the best – we are getting more demand for Romanée-Conti itself.”

Interestingly, and importantly, the level of knowledge is increasing among the fine wine consumers emerging outside the traditional markets of the UK and US. This Raffety is witnessing when it comes to vintage selection – the demand is centred on the top years. 

However, it will still take a while before the intricacies of Burgundy’s crus and growers becomes more widely understood. If that occurs and demand does soar, yet more passionate collectors will no doubt be priced out of an extremely exclusive market. 

Turville Valley Wines: history

 

• Michael Raffety was working in Sotheby’s wine department when he founded Turville Valley Wines in 1979 

• He remained at Sotheby’s until 1982 when he left to run his business full time

• Chris Davies, who handles Turville’s private customer sales, had worked with Raffety in Sotheby’s before leaving in 1983 to set up International Wine Auctions. He joined Turville Valley Wines in 1988

• Turville Valley Wines is based in Great Missenden, which is about 30 miles north-west of London. All its wines are stored with London City Bond in its Barking, Essex, bonded warehouse

 

Patrick Schmitt, 21.01.2010