The Oeno File: Is The 2009 Bordeaux A Bad Investment?

January 28th, 2011

By Chris Gill
Originally published in Guitar Aficionado, Winter 2011 issue

When the wine media announced that 2009 was likely to deliver the best Bordeaux vintage of our lifetime, collectors and connoisseurs braced themselves for the inevitable overinflated prices that were sure to follow. As anyone who has regularly purchased Bordeaux wines over the past 10 to 30 years knows, each time a banner vintage is announced prices increase exponentially and decrease only slightly in lesser years, if they decrease at all. (For example, futures prices for the lackluster 2007 vintage were actually higher than those for wines from the much-hyped 2000 vintage.)

In June and July 2010, when Bordeaux futures prices finally trickled out, prices across the board averaged about double the futures price of the 2005 vintage ,and in the case of a few first growths like Lafite Rothschild and Latour were about three time smore costly. While those who have tasted 2009 Bordeaux wines can attest that many are the producers’ best-ever efforts, few can justify the obscenely inflated prices, which seem to be inspired more by unadulterated greed than supply and demand or production costs. For the first time in recent history, futures prices surpassed the current retail prices of many older desirable vintages like 1982 and 1990, which are at or near peak aging conditions and are drinking exceptionally well today.

Bordeaux futures used to be a reasonably good buy for collectors and investors who wanted to save money, but as of late, purchasing futures has become a risky venture, where wines often have sold at or near futures prices upon release and occasionally even less when the dollar has gained strength against the Euro. While connoisseurs won’t want to ignore 2009 Bordeaux wines altogether, there are very good arguments why one should not purchase futures and why it may not even bea good idea to buy these wines upon release.

Consider the example of 1990 Montrose, which received a 100 score from Robert Parker. Upon release, a 750ml bottle of this wine sold for about $100, and today its retail price averages $500, which means that the wine has appreciated in value a little over nine percent annually since its release. While that’s not a bad return on an investment, one overlooked expense is the cost to properly store a bottle over all of that time, which—including the cost of building a storage cellar or purchasing a cooling unit, electricity, and other expenses—averages $1 per bottle per month over an 18-year period. That’s a total cost per bottle of more than $200. At best, buyers of a bottle of 1990 Montrose made only about $200 on their investment—about six percent annual return.

Because of the overinflated prices of 2009 Bordeaux, the potential for return is even lower, especially with the top first growths, where the average 2009 futures price per bottle ranges from $1,000 to $1,500. While prices for 2009 first growths will certainly increase, it’s doubtful that prices will multiply four, five, or six times by the time the wine reaches peak aging condition, like they have in the past. Chances are you could be looking at only three to four percent average return while your Latours and Lafites lie in suspended animation in your cellar like the astronauts in 2001: A Space Odyssey.

My advice? Let the 2009 Bordeaux wines sit in their producers’ cellars in France instead of your own. The fact is, there is much more wine than there are drinkers, so you’ll never have a problem finding a 2009 vintage from your favorite chateau. Consider the glut of great Bordeaux from the 1982 and 1990 vintages that is ready to drink today and is a great value (1982 Mouton Rothschild and La Mission Haut Brion, 1990 Margaux). Or consider alternatives to Bordeaux that are also a great value. For example, 2007 Chateauneuf du Pape is stunning (especially Beaucastel, Pegau,and various offerings from Clos Saint Jean, like Deus Ex Machina), and many incredible California reds are underpriced, like 1992 Dunn Howell Mountain and 2001 Robert Foley Claret.

Instead of buying a case of first-growth 2009 Bordeaux, invest that money, let the investment grow, and buy the wine with your earnings when it’s ready to drink. Chances are you’ll have more than enough money left from your investment to purchase a trip to France and a meal at a three-star Michelin restaurant to accompany your wine purchase.