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The purpose of these reviews is not an attempt to measure the hedonist nature of a newly released wine by describing its features through tasting notes and a score but to review the past history of the wine through real sales data available from the secondary market and attempt to determine the merits of this current release from a value point of view.

Investment Wines

The secondary wine market in perspective

When valuing a wine it is important to understand why there are huge price variations (positive and negative) between the primary market for wine and the secondary market and to also realise that wine cannot be treated as a vehicle for investment as you would treat a stock in a company on the share market.

Primary Wine Market

Nearly all wine that is purchased 'new' is consumed within two weeks and only a tiny percentage of wine makes its way into storage for later consumption or eventually for sale on the wine auction market.

Advocates for this market are wineries and sales are driven by mainstream advertising, primary wine reviewers and often big PR budgets.

Secondary Wine Auction Market

The secondary market for fine wine is driven by a well informed and highly engaged community of consumers who value wine based on personal experience and shared common knowledge. The value of the wine changes over time as more information is shared within the community. The wine contains no intrinsic value itself except the common market value attributed to it by the community and ratified by any auctions or sales over time. The only commercial advocates for the wines in this market are auction houses.

Share Market

Unlike wine prices, share prices are driven by rational, unbiased assumptions and, at any present time, all estimated future returns are bundled into the current share price which may change as new information is revealed, as such, it is ridiculous to consider that a bottle of wine can be indexed or tracked like shares in a company, a typical share generates value for its owner whereas a bottle of wine cannot generate any real value until it has been opened, and in the process destroyed, hence wine prices are pure speculation and not a reflection of intrinsic value.


Auctioneer Wine Reviews

Penfolds Grange Shiraz 2008

Review Date: 2nd May 2013

Investment Value Rating: 2 star rating: Not Recommended

2008 Penfold Grange Release Auctioneers Wine ReviewRelease Date: 2nd May 2013

Australian Release Prices(s)
Recommended Retail Price by Penfolds: $785
Discounted(s) Retail Prices: $669 and going down.
I expect it to be discounted down to as much as $620 and to be trading within a year at auction in a range between $500 and $600 (availability in Australia will still be low). However, if the large quantities of Grange that were sent overseas find their way back to Australia as the 1998 Grange did then the value will drop down to around $450 if not lower.

Note: International prices are not quoted as they are always listed without duty and taxes ( add 40% to their value) .

Previous Vintage Auction Prices:
Average price paid at auction between April 2012 to March 2013

  • 2007 Penfolds Grange $400
  • 2006 Penfolds Grange $520
  • 2005 Penfolds Grange $400
  • 2004 Penfolds Grange $420
  • 2003 Penfolds Grange $375
  • 2002 Penfolds Grange $385
  • 2001 Penfolds Grange $360
  • 2000 Penfolds Grange $390
  • 1999 Penfolds Grange $385
  • 1998 Penfolds Grange $515 –

Summary of the 2008 release

There is absolutely no doubt that Penfolds Grange is a world class wine on par with the best of the French premium wines and the 2008 vintage is a superb example! However, the secondary market is skewed towards domestic trading only and is decades away from any investor achieving even the initial outlay let alone the extra costs involved with storage, transport and auction commissions.

If China or the USA were to take up Grange consumption (as opposed to speculative buying that does not contribute towards a sustainable long term pricing structure) in a similar manner that they consume Bordeaux and Burgundy, then there is a good possibility that international buyers of Grange would see a substantial price rise. However, that trading would be confined to offshore auctions while the domestic market continues to struggle with prices bloated by Australian government duties and taxes.

So if you must have each new release for your collection then expect to pay high prices for some time over the next 6 months at least. But if you are able to wait patiently it will pop up soon enough as a discard from an over anxious speculator selling it to buy their next under-researched venture.

Last reviewed by Mark Wickman on the

 

Rockford Basket Press Shiraz 2010

Review Date: 28th April 2013

Rockford Basket Press
Investment Value Rating: 5 star rating: Highly Recommended

Release Date(s):
a. September 2012 (Exclusive to mailing list only)
b. 1st March 2013 (Public release, 3 bottle limit from cellar door)

Release Price(s):
1. Cellar Door = $57 (3 per household limit)
2. South Australian retailers = $75 (Only have 6 to 12 bottles allocated each)
3. Other Australian states = $100+

 

 

Previous Vintages Auction Prices (in the last 12 months)

Exceptional Vintages
1998 Rockford Basket Press  $150 to $200
2002 Rockford Basket Press  $108 to $162
2004 Rockford Basket Press  $97 to $127

Average Vintages
2003 Rockford Basket Press $86 to $102
2007 Rockford Basket Press $75 to $90

Summary 

The 2010 vintage of the Rockford Basket Press is said, by most impartial wine critics, to be one of the best vintages in some time. If that is the case then it is possible that the secondary market price may reach as high as $110 within a year or two (it is already trading at $100+ when placed at auction), with the potential to reach values achieved by other exceptional basket press vintages.

This wine is certainly a buy proposition and a short stint in the cellar of a year should yield some pleasant results. The trick is to grab it at cellar door price or from South Australian wine retailers (still available as of 27th April 2013). However, because of the limits imposed, there are few actual gains to be made as a real investment and opening the bottle and sharing it with friends will yield the best results!

Last reviewed by Mark Wickman on the

Values have been aggregated from national secondary market data.

Notes on pricing and valuations

Low Range
Typically, price clusters form over time at market value. The low value is then calculated from the average accumulated hammer price at auction from multiple Australian wine auction houses over a 6 month period. All prices are for bottles with no damage or ullage. Well stored bottles with a documented purchase and storage history will always attract the best prices.

High Range
High prices are typically outliers or record high values achieved over a long period of time and,typically, includes only a very low sample of bottles sold, never the average and most often only a single bottle.

A note on auction reserves
All auction houses generally set a reserve price 10% less than the low price range. This allows for fluctuations of the market price going down as well as up.



Author: Mark Wickman
wineauction@wickman.net.au
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Quick Wine Valuation

Please email the following information:

  • Vintage (NOT the bottling year)
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