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LVMH Buys Top Californian Winery Joseph Phelps

Exterior of Joseph Phelps winery and vineyard

The French luxury goods house LVMH has announced that it is expanding its portfolio of northern Californian wineries with the purchase of high-end producer Joseph Phelps. 

Phelps has produced sought-after bottles from Napa and Sonoma for almost 50 years. The winery’s top cuvée – Insignia – was one of Napa’s first Bordeaux-style Cabernet blends and helped the region’s new style of wine to gain recognition in the 1970s.

The purchase means that Moët Hennessey has now deepened its foothold in California where it already owns three other wineries: Domaine Chandon, Newton Vineyard and Colgin Cellars.  

Included in the sale is the Phelps brand, winery and inventory, as well as approximately 500 acres in vineyards in Napa and Sonoma counties. No purchase price was disclosed.   

Moët Hennessy Chairman and CEO Philippe Schaus said that Joseph Phelps is ‘an iconic name and an iconic winery’. ‘It’s important for us that we are acquiring a family business with a legacy and heritage. It’s super important that we keep that heritage.’

For Schaus, Moët Hennessy’s aim is to be able to offer ‘all the different moments of consumption’: from apéritifs, Champagne and fine dining wines to bars, clubs and cocktails. The company’s Cloudy Bay brand covers white wines and its Whispering Angel line offers rosé, but, Schaus commented, ‘we were missing a strong red wine.’

It’s clear than LVMH ‘s purchase of this Napa stalwart fits comfortably into its portfolio, as Schaus declared: ‘Joseph Phelps has been to the Napa Valley what Nicolas Ruinart, Mrs. Clicquot, Joseph Krug and Claude Moët were to the Champagne region and likewise we will continue to develop this new House in the respect of the founder’s heritage and vision.’

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WineCap Featured in The Telegraph

Bottles of wine laid down to age

WineCap featured in the ‘Money’ supplement of Saturday’s The Telegraph. You can read Lauren Almeida’s full article here and find a summary below on how investors are turning to fine wine to protect their savings:

With share prices falling, investors are looking at how fine wines and luxury goods can protect their savings.

Historically, stocks and shares have delivered solid returns over the course of a decade during a bull market. However, with a global recession looming, markets are on a downward trajectory with global stocks down %12 year to date. With inflation at a 40-year high, savvy investors are looking to protect the value of their money through other means.

Rod Peel worked as an engineer at British Gas and is now retired in Bolivia. His portfolio of investment-grade wines are valued at over £1m. ‘I started in 2004, when I received a call from my current broker WineCap’.

‘You only make profits on the wines when you sell them. Otherwise, they sit there gaining hypothetical money. I pay around £1,000 for storage and insurance each year.’

One of the advantages of investments in wine and whisky is that there is no need to pay capital gains tax on profits as they are classified as a ‘wasting asset’ by HMRC.

‘It’s also very fun,’ Mr Peel commented. ‘It’s interesting to learn about the wines. You discover something new every day. I think it’s more engaging than investing in shares.’

Another investor is Cameron Scott, a 78-year-old accountant from Staffordshire who has been building up a portfolio of wines and is nearing retirement.

‘My wine makes up between 5pc and 10pc of my overall portfolio,’ he commented. ‘I like it because I can’t imagine that its value would ever fall to zero and it helps reduce currency risk. My best investment has been in an American wine that I bought seven or eight years ago, Screaming Eagle. It cost a few thousand a bottle, and its price doubled in just three years.’

‘But overall I view it as a long-term investment. I don’t sell many, because I’d like to pass my wine down to my beneficiaries, rather than cash in now.’

Both Mr Peel and Mr Scott highlighted that they had found it hard finding a trustworthy broker in wine. ‘It is not a fully regulated market, so there are a lot of rogues out there,’ said Mr Peel.

Keen to find out more about the benefits of wine investment? Download our free guide.

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Sussex Sparkling Wine Secures PDO Status

Nyetimber vineyard with rows of vines in the sun

It’s English Wine Week and there’s now one more reason to raise a glass of Sussex sparkling wine. It has just been awarded Protected Designation of Origin (PDO) status from the Ministry for Farming, Fisheries and Food.

A product with a PDO means that it’s made in a particular way and comes from a specified region. It represents a guarantee to consumers that the product they’re buying is the real thing and prevents imitations.

Top wineries including Nyetimber, Bolney Estate and Rathfinny Estate all make wines in the region and will soon have another layer of protection in the form of the Sussex Sparkling Wine PDO that they can add to their bottles.  

Sussex currently has just under 50 wineries and – like many of the extraordinary English sparkling wines out there – has gained well-deserved international recognition. Its still wines are gaining momentum too. As the region gains accolades, awards and wineries, the only way is up and it continues to produce some of the finest sparkling wine in the world, giving top Champagne cuvées a run for their money.

Another element the Sussex PDO highlights is the difference in terroir in English winemaking by drawing a clear line between them and others made in Kent or Surrey.

Simon Thorpe, CEO of WineGB, commented on the new PDO: ‘The approval of a PDO for wines grown and made in Sussex comes at an important time for English and Welsh wines… There has never been more interest in and demand for our wines and the reputation they have gained in both domestic and international markets is based on high quality viticulture and winemaking excellence.’ 

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Free Wine Investment Tool ‘Wine Track’ Launches

Laptop displaying Wine Track page

We’re delighted to launch Wine Track, the most comprehensive index available. It enables you to identify the right, undervalued wines to buy and sell across the global market at the right time and price.

Our in-house technology collates and analyses Liv-ex and Wine-Searcher data, along with over 400,000 wine prices a day collected independently from 250 leading wine merchants across the globe, helping you navigate fine wine markets with confidence.

We’re proud to have also developed our own bespoke scoring system: the Wine Track critic score. It aggregates more than 100 wine critics’ scores from 12 worldwide publications to produce a simple and transparent score that marks each wine out of 100. This helps you reference a wine’s quality at a glance, as some critics use different scales to grade wines.

To demonstrate just how powerful Wine Track is, we’ve identified that Chateau de la Tour, Clos de Vougeot Grand Cru, Vieilles Vignes – at £1,794 per case – represents a real opportunity for retail investors to diversify their portfolio. This wine is from the same vineyard in Burgundy as Domaine Leroy, Clos de Vougeot Grand Cru – at £65,816 a case – and has an almost identical Wine Track critic score: 93.8 points compared to Domaine Leroy’s 94.7 points. While Domaine Leroy’s price is driven by its excellent reputation, Chateau de la Tour offers better value and accessibility.

Our tool monitors over 75,000 investment-grade wines from 1990 to the present day, enabling you to track how prices have changed over any given period.  

Wine Track is testament to the hard work of our development team and we’re proud to launch this free tool that harnesses the latest technology. Our data-led investment decisions are the reason our customers continue to experience positive returns. 

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Champagne Lanson to sell on La Place de Bordeaux

Lanson's Le Clos walled vineyard

Le Clos Lanson is set to become the second Champagne ever to be sold on La Place de Bordeaux, one of the world’s oldest marketplaces. The single vineyard expression – and Champagne Lanson’s top cuvée – follows Champagne Philipponnat’s Clos des Goisses onto the historic marketplace.

La Place de Bordeaux is over 800 years old and is a distribution system that consists of around 300 négociants (distributors) and courtiers (middlemen) who buy and sell wines from Bordeaux châteaux. Historically, La Place only sold wines that were made in Bordeaux. However, in 1998 the marketplace opened its doors to its first non-Bordeaux bottling: Viña Almaviva’s 1996 vintage, a joint venture between Château Mouton-Rothschild and Chile’s Concha y Toro. In subsequent years, more and more non-Bordeaux wine producers have been invited to sell on La Place. Think Napa’s Opus One, Australia’s Penfolds Grange and Argentina’s Catena Zapata.

The advantage of selling wines on La Place is its access to global markets and experience selling into Asia, especially China. Négociants have salespeople around the world primed to sell high-end wines. Lanson’s president, François Van Aal, commented on this new approach:

‘This distribution method will enable our icon cuvée to reach a larger amount of wine lovers and collectors around the world, while strengthening the awareness of our Champagne house which is already present over 80 countries’.

Le Clos Lanson 2009 will be the first expression sold on the platform. This top cuvée is produced from 100% Chardonnay grapes harvested from a one-hectare, walled vineyard in the heart of Reims. Only just over 7,000 bottles, along with some magnums, were produced of the 2009 vintage.

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Château La Gaffelière to Leave the Saint-Émilion Classification

Chateau La Gaffeliere's exterior

Château La Gaffelière has announced that it has decided to leave the Saint-Émilion classification. That now makes it the fourth Premier Grand Cru Classé to withdraw from it.

The Malet-Roquefort family has owned the estate for over 300 years and released a statement which detailed the reasons for its departure. The château no longer recognises ‘the values in the criteria for evaluating the great terroirs and fine wines of Saint-Émilion as set out by the Classification Committee’.

The château cited the committee’s first report which it said ‘called into question the quality level of our terroir, which has been acclaimed and distinguished by the AOC authorities for more than 65 years’. The Malet-Roqueforts argue that the scoring system put in place for the tasting, ‘contradicts all the scores that Château La Gaffelière has obtained over many years from the greatest wine professionals’.

The classification is updated every 10 years and in 2012 it awarded Premier Grand Cru Classé A status to Châteaux Angélus, Ausone, Cheval Blanc and Pavie. Only Pavie currently remains. Angélus said that the classification had become a ‘vehicle for antagonism and instability’. 

Châteaux Ausone and Cheval Blanc withdrew from the classification last year as they found that there had been ‘a profound change in its philosophy’ in 2012. They believe that there was now ‘too much of a focus on marketing drift such as the importance of product placement, how often an estate appears in media, including PR and in social media, along with wine tourism infrastructure’. 

Defending the classification’s process, the Saint-Émilion wine council said that the new ranking system is ‘a formidable tool for challenge, innovation and modernity’.

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Why the 2022 Burgundy Vintage is Looking Promising

Burgundy vineyard with rustic house

Frosts descended on some of France’s key fine wine regions in April for the second year in a row. Producers in Burgundy, Bordeaux and Champagne braced themselves for the coldest temperatures the country had experienced since April 1947. Burgundian winemakers were perhaps the most hypervigilant out of all the country’s producers who were taking measures in the vineyard to prevent the frost from settling. Burgundy’s vignerons were poised to battle the elements each night in the hope of escaping the same losses that impacted the 2021 vintage.       

Fortunately, the Bureau Interprofessionnel des Vins de Bourgogne (BIVB) – Burgundy’s wine board – has just announced that this year’s frost damage isn’t as bad as first thought. While ‘everyone had feared the worst’, due to a mild winter and two snaps of frost in April, it commented that ‘this event is different’ to last year’s. ‘The vines are less advanced in the growth cycle and in general terms, the frost was shorter and less intense.’ The areas which came under the most pressure from frost were ‘certain sectors in the northern part of the region.’

The BIVB’s technicians found in their analysis of vineyard plots that early May’s warmth and rainfall had helped accelerate the growing season and that flowering had begun mid May.  

While the climatic challenges experienced this year hadn’t resulted in as much damage in Burgundy’s vineyards as previously feared, the BIVB warned last month that there are still potential difficulties that lie ahead. This stems from a combination of increased global demand from consumers and reduced yields in 2021. Another factor the wine board highlighted was the financial pressure winemakers were under, having had to pay for additional vineyard equipment, such as candles, to ward off the frost. 

With frosts becoming more and more of a yearly occurrence and with producers’ margins becoming even tighter, could we see already high Burgundy prices rise even more? WineCap will be keeping a close eye on the 2022 Burgundy vintage and its progress. 

October 2022 update: Now that the harvest is in, discover the BIVB’s initial thoughts on the quality of the vintage and yields in our article.

Want to learn more about Burgundy, its producers and appellations? Download our Region Report to find out more.

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Why Fine Wine Might be a Better Investment Than You Thought

Stock market screen

WineCap featured on YourMoney.com today in an article that focused on how fine wine is gaining an increasing amount of investor attention in a climate of rising inflation and market volatility. You can read a summary below:

In the current climate of war, instability and rising inflation, alternative asset classes such as fine wine, are in the spotlight for investors.

A lot of asset classes have been materially hit by factors including the war in Ukraine and issues arising from Covid-19 including record inflation.

High inflation creates a big problem for some investors. Price increases reached 9.2% in the UK in March, hitting a 30-year high and that rate is predicted to continue to grow over the rest of the year.

Economies in Europe and North America are also experiencing these kind of pressures. Central banks have begun increasing base rates and further rises aren’t ruled out later in 2022.

With uncertainty in the markets, lots of investors are looking to diversify their portfolios and reduce risk.

Alternative asset classes are attracting a lot of attention and investment-grade wines are exhibiting capital strength. The fine wine market is fostering a stable environment, even during periods of economic uncertainty.

The high end of the fine wine market is self-contained and not linked to financial markets. This is due to the fact that it shadows the movement of wealth around the globe. It has low volatility when compared to conventional markets and other ‘luxury’ asset classes.

The past 25-30 years has seen investment-grade wines grow in popularity due to their finite production levels, flexibility and stability.

It also has a proven track record of resisting inflation. The main fine wine 1000 index – from its launch to the end of 2021 – has gone up 270.7%, survived three global financial crises and delivered more returns than the S&P500.

Interestingly, in the current economic climate, as inflation spiked towards the end of 2021, the price of fine wine did too and the 1000 index rose over 19% last year.

Fine wine is generally viewed as way to store value. In the past few years, wine has performed better than gold. In 2021, wine returned 22.5% while gold returned -2.69%.

The market has grown in recent years with more investment from both sophisticated and retail investors; this has generated more demand for limited physical cases of wine. This demand is continuing to grow. For the world’s most sought-after wines demand always outstrips supply.

Companies are democratising wine investment, something that historically was only for high net worth individuals and sophisticated investors.

Retail investors can now take advantage of lower fee models and harness cutting edge technology to benefit from fine wine’s diversifying powers in a currently uncertain and unstable environment.

WineCap is a new wine investment company which analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the globe.

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Penfolds to Produce Special Made-in-China Bottling

Shanghai Skyline

Penfolds is Treasury Wine Estates’ most iconic brand. Its most sought-after bottling is undoubtedly ‘Grange’ which is revered by wine lovers and collectors the world over and has received a wealth of 100 point scores, rave reviews and awards since its first official vintage in 1960.

China is an important market for Treasury Wine Estates and its Penfolds wines are in high demand. However, due to the eye-wateringly high tariffs (up to 200%) that were imposed by Beijing in November 2020, its exports to the country are down by 26%. 

In order to supply its wines to China as smoothly as possible in future, Treasury Wine Estates has found a way to bypass the tariffs: by growing grapes and making wines domestically to create ‘Penfolds China’. The international drinks company has been experimenting with viticulture in the western province of Yunnan in the Ningxia and Shangri-la regions and is happy with the results of its ‘primarily Cabernet-based’ wines so far, as Chief Executive Officer Tim Ford commented: ‘China is an emerging fine winemaking region and we’re confident we can produce a premium Chinese Penfolds that maintains the distinctive Penfolds house style and uncompromising quality’.

Penfolds is expected to release this new wine in the second half of 2022 and each bottle will reach between A$30 – A$50, as reported by Bloomberg.

This isn’t the first time that Penfolds has looked to foreign shores in order to push winemaking boundaries. It launched Penfolds California last year, with a series of wines made in Napa from Cabernet Sauvignon and Shiraz. ‘Quantum’, its top cuvée, was released at £545, 10% higher than Grange in the UK. Interestingly, its parent company has also acquired vineyard holdings in Champagne and Bordeaux.

All eyes are sure to be on China, Champagne and Bordeaux over the coming months and years as the fine wine world waits to see which other innovative and ground-breaking wines Penfolds releases from both established and emerging wine regions.  

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E. Guigal Buys Château d’Aqueria

Exterior of chateau d'acqueria

The esteemed northern Rhône producer E. Guigal has acquired Château d’Aqueria in Tavel, one of the jewels of the southern Rhône. The celebrated maison made the purchase from the de Bez family and the estate spans 242 hectares with 168 under vine. Some 100 acres are in Tavel with the remainder in the neighbouring Lirac appellation.

This isn’t Guigal’s first purchase in the southern Rhône; the maison bought Domaine de Nalys – now Château Nalys – five years ago. It had previously sourced grapes from there over the course of three centuries for its négociant arm.

Château d’Aqueria dates back to 1595, when Louis Joseph d’Aqueria purchased the land for grape growing. The estate has been bought and sold over the centuries and, most recently, Paul de Bez’s sons, Vincent and Bruno, were in charge of it until this new purchase. 

The Tavel appellation lies just across the Rhône river from Châteauneuf-du-Pape and spans some 933 hectares. The region is famous for producing complex and deeply coloured rosé wines from primarily Grenache and Cinsault grapes, with Syrah and Mourvedre supporting. Tavel rosé must have at least 11% alcohol which renders it suitable for ageing.

The estate produces approximately 16,000 cases of wine each year and it will be kept by E. Guigal as a separate domaine, aside from the négociant arm. 

Lirac is gaining more and more interest recently as Châteauneuf-du-Pape lovers look to this region which shares a similar terroir. Producers from Châteauneuf have been buying vineyards here and making more accessibly priced white and red wines from old vines. 

Philippe Guigal, winemaker and CEO, said that the team is ‘eager to make its contribution to Château d’Aqueria’ and that its first project will be to ‘drive forward the practice of biological-ecological viticulture, with the help of the existing team at the Château.’