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Fine Wine as a Wasting Chattel

Fine Wine as a Wasting Chattel

From April 6, the British government will move to reduce the deficit through a number of measures, including very significant changes to capital gains tax thresholds. However, investors may find that “wasting chattel” investments could be a worthwhile solution to this.

From the new financial year 2023-2024, the threshold for paying capital gains tax (CGT) will be slashed, from £12,300 to £6,000 this year, and then again to £3,000 the following year – a full 75% fall. This added tax burden will inevitably eat into investor returns. However, the category of investments known as “wasting chattel” is exempt from CGT altogether, meaning that any gains made on these investments will allow investors to keep more of their profits.

Wasting chattel investments are assets with a predictable useful life not exceeding 50 years and can include things such as art, furniture, vehicles, and most importantly, fine wine. These may provide investors with a tax-efficient way to profit.

If you’re looking to balance out tax losses and protect your portfolio against inflation, then allocating more of your portfolio to wasting chattels may be a smart move. Collectible assets such as fine wine are often inflation-resistant and have a long history of good returns. They can therefore provide a much-needed buffer against the current economic environment; helping ensure the long-term success of your portfolio and the security of your financial well-being.

In these difficult economic times, adaptability is paramount, and it is essential for investors and portfolio managers to remain flexible by considering all investment tools and vehicles. Wasting chattels kick back against the upcoming tax hits, and can be an excellent option.

If this sounds like something of interest to you, why not schedule a consultation with WineCap? Our wine investment experts would be only too happy to guide you through the process.

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Chinese Wine Imports on the Road to Recovery

Chinese wine buyers, tasting wine

Chinese wine imports have begun their revival as borders reopened to international travel following three long years of Covid restrictions that isolated the world’s most densely populated country.

As families reunite and look forward to a much needed period of recovery, the wine trade breathes a collective sigh of relief after surviving 2022, the year that saw the wine industry “hit rock bottom in both import and domestic market[s]”

An article, published by China’s leading wine news site Vino Joy News, examines the potential for a rebound in Chinese wine imports which dropped significantly in 2020 due to the successive lockdowns of the pandemic. The decline in corporate activities and cultural gatherings which usually drive crucial sales peaks saw revenues affected drastically. Experts are positive that the recent lifting of Covid restrictions will rejuvenate the market akin to the swift recovery of the restaurant industry since December’s relaxation of pandemic constraints.

The key factor driving this optimism is the increased demand for better quality wine from China’s increasingly affluent middle class. This is set to be further boosted by the recent relaxation of import tariffs, making wine more affordable for Chinese consumers. This year’s Spring Festival has seen revenues spike which suggests that other events like the Mid-Autumn Festival and National Day will have a similar effect.

Though there is a potential for the relaxation of Chinese food and beverage standards this is unlikely to affect the fine wine market, and overall the long-term outlook for Chinese wine imports remains very promising.

A key indicator of the market’s recovery will be the upcoming Chengdu wine fair in April, an event considered “a bellwether of China’s drinks industry” and likely a strong reflection of the country’s enthusiasm for fine wine.

With any luck, this will be the year that sees this major player in the fine wine market return to form.

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Bordeaux 2020 in Bottle

Bottles of Mouton Rothschild 2020

A number of key critics have delivered their thoughts on the third and final of the vintage triumvirate – Bordeaux 2020. The wines are characterized by lower alcohol levels, tension, and precision as a result of the warm and dry conditions with well-timed rainfall.

As the wines continue to become available in bottle, attentions have refocused on this vintage thanks to the unusual circumstances that surrounded it. With summer ripening and harvest taking place in the thick of the Covid-19 lockdown, restricted access to the estates meant that the growing season and processes took place relatively quietly and without the usual commentary. En primeur tastings were undertaken either remotely, or under tightly controlled conditions.

More recent tastings have revealed, however, that Bordeaux 2020 might be the champion of the three. Antonio Galloni concluded in his report, titled “Saving the Best for Last”, that “2020 is a great modern-day Bordeaux vintage. From the standpoint of both peaks and overall consistency, it surpasses 2018 and 2019.” Neal Martin notes in his report that “Overall, the 2020 vintage delivers the goods. It seals the trio of great Bordeaux vintages, albeit sculpted in a modern style” referencing that of the three vintages that encountered warmer conditions “by 2020, they knew a hell of a lot more than in 2018”.

Both praised Pauillac’s Lafite Rothschild and Mouton Rothschild, as well as the “epic” Château Margaux, powerful Montrose, and Pétrus, which Neal Martin proclaimed “an absolute killer”.

Jane Anson was fortunate enough to be one of a handful of people able to experience en primeur in Bordeaux itself. In her Bordeaux 2020 vintage overview she mentions the significance of a more focused year. Where producers could be fully dedicated to winemaking alone, this “allowed estates to put the spotlight on their own processes, and perhaps question certain accepted practices, or double-down on others.”

Anson also notes that Bordeaux 2020 has seen only limited trading so far, but that it is likely to pick up the pace soon as more wines become available.

Bordeaux 2020 looks to be a vintage with a lot to offer, and potentially one of those rare occasions where the third in the series is considered the best. At WineCap, we see excellent performance potential here and will be in touch with new offers on this promising offering soon.

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Antonio Galloni’s 2019 Barolo Report

2019 Barolo

In his new report reviewing 2019 Barolo releases, Antonio Galloni has showered this “stellar vintage” with praise, noting that even though the summer brought intense heat, opportune rain and instinctive decision-making on the winemakers’ part led to wines that “don’t taste like wines from a warm vintage at all.” Following an inconsistent 2018, this return to form might very well signal a new cycle of strong to exceptional vintages for this storied appellation.

Those who value Nebbiolo’s complexity and finesse will be enthralled by the 2019 Barolo wines and their powerful, tightly-wound structures, which currently have the sort of youthful austerity akin to vintages like 2016, 2005, and 1999.

A relatively dry winter and typically warmer-than-average temperatures marked the start of the year before colder conditions and rainfall saw bud break delayed by two weeks. Though persistent rain threatened a repeat of the previous year, thankfully it turned out to be quite benign. The summer months were met with warmer weather balanced with rainfall and cool nights which led up to an ideal, slightly later harvest.

Among the stars are Vietti, with Barolo Ravera earning 100 points from Galloni, citing its energy and tension as exciting characteristics. Giacomo Conterno’s Barolo Riserva Monfortino comes in just behind at 97-99 points showing incredible refinement for its relative youth, and showing plenty of tannin and structure. Also, following the sad passing of Luciano Sandrone, both Barolo Le Vigne and Aleste scored 97 points and were praised for their energy and potential development.

WineCap sees a real opportunity in Italy at the moment and the wines of Piedmont in general. Keep an eye out for offers coming over the next few weeks. Many of these wines are not available yet, but rest assured that when they are, we will be certain to let you know.

Read more about Why Fine Wine Might be a Better Investment Than You Thought.

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Sotheby’s Wine & Spirits Auction Sales Top Record $150 Million in ’22

Bidders holding paddles up at auction

Fine wine and spirits sales at Sotheby’s hit a record-beating $150 million last year, an increase of 14% compared to the year before. 

69 wine and spirits auctions were held by the top auction house during 2022, which represents 30% more than in 2021. This new record for fine wine and spirits sold at auction doesn’t include private sales and retail sales.

The main revenue source was fine wine: delivering a total of $121 million last year. Spirits also contributed double-digit growth of 15% year-on-year with a total of $29 million, underlining the rising interest in investment-grade whiskies and fine spirits. 

One particular highlight included a unique assortment case of 12 bottles from the 1990 vintage of Domaine de la Romanée-Conti which sold for an estimate-breaking $118,750.

The Macallan The Reach 81 Years Old single malt, an incredibly rare special edition, went on auction in September at Sotheby’s in London. It was the oldest whisky ever to be entered into an auction and sold for £300,000 (or $325,740).

In the US, spirits sales doubled: up from $5 million to $12 million. The key driver can be attributed to a stronger demand for luxury bottles.

Asia remains a key focus for Sotheby’s, with the auction house’s 2023 continued expansion plans in the region. Sales in Asia contribute the most to the house’s total revenue from auctions: $54 million. What’s more, the auction house reported that Asian buyers represented 41% of sales by value in 2022.

Commenting on total sales, Yves de Launay, Head of Auction Sales, said: ‘Overall 2022 saw a very strong performance in a very challenging market.’ ‘Bordeaux and Burgundy clearly led the way with an increasing demand for vintage Champagne and rare wines for other regions such as Tuscany or Rhône. Demand should remain strong for the finest and rarest wines in 2023.’

Read about Christie’s December 2022 London auction that reached over £2.12 million in sales. 

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Champagne Jacquesson Purchased by Pinault Family

Champagne Jacquesson front label

François Pinault, owner of Artémis Domaines, has finalised the acquisition of Champagne Jacquesson.

In February last year, Artémis Domaines took control of a minority stake of 33% in Champagne Jacquesson. At the time there was speculation that a full takeover would ensue later in the year. Managing the Dizy-based operation with his brother Laurent since 1990, Jean-Hervé Chiquet has confirmed that the complete takeover happened in December 2022. Chiquet commented: ‘When we bought back Michael Mackenzie’s shares (in the company) at the end of 2020, we started to think about a new partner and found that Artémis Domaines was interested. We started to discuss options with them and agreed on their arrival as a minority shareholder last February.’

‘Since then, we have had time to get to know each other and, as Laurent and I have no successor in our family, we have decided to put Jacquesson in the best hands possible to guarantee its future and to be sure that our dedication to quality will remain or even be improved,’ Chiquet added. Although he and his brother won’t be actively involved in managing the company, ‘we will continue to supply the company with grapes from our own vineyards and I will stay on as a member of the board but without an operational role,’ Jean-Hervé added.

Located in Dizy outside of Epernay, the Jacquesson estate was purchased by Jean-Hervé and Laurent’s father in the 1970s. The estate dates back to the 18th century and Joseph Krug worked there before he founded his own house in 1843. The brothers have shaken up the ‘Brut sans année’ market with the introduction of their Cuvée 700 concept. Their first release – Cuvée 728 – centred on the 2000 harvest and was released in 2004.

Chiquet, who has previously spoken about his and his brother’s approach, said: ‘The Cuvée 700 concept is unique in Champagne and is the opposite of a non-vintage wine. We seek excellence rather than homogeneity, respect for the character of the vintage rather than its denial, and the preference to create a “house style”, the doctrine most other producers in Champagne follow for their non-vintage blends. Our Cuvée 700 is the only blended wine we produce; it is meant to be the expression of a year and thus each year offers a different identity which we recognise by numbering the cuvée.’

Read more about the Pinault family’s 2022 acquisition of Champagne Henriot.

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Chablis Commission Pleased with 2022 Harvest

Chablis grand cru vineyard

While Chablis declared 2021 to be a ‘complicated’ year, 2022 has proven to be a real contrast, with the Chablis Commission having declared this year’s harvest to be a healthier and overall higher-yielding one.

Paul Espitalié – president of the Chablis Commission – commented that 2022 was a much more dynamic vintage when compared to 2021, as the years before it had ushered in ‘challenges for winemakers in Chablis with the changing and unpredictable climate’.

Many winegrowers in Chablis rejoiced after the harvest this year as yields were plentiful and almost up to the maximum amount permitted. Because of this, the commission is hopeful that the region will be able to make up some lost ground with regards to volumes for export markets, where the UK still holds the top spot.

Espitalié commented that: ‘The UK continues to be our most important export market and we believe a key element to the continuing success of Chablis wines’. He also added that one of the commission’s main focuses is to increase consumer awareness of both Petit Chablis and Chablis wines.

‘These appellations have just as much to offer the market, particularly in the current financial climate in terms of offering great value wines,’ he said.

The 2022 harvest’s wines will be available in the UK shortly. Over the course of a year, a total of 3.8 million bottles were sold in the UK in 2021 – 2022.

Looking ahead, 17% of all Chablis vineyards are currently 100% organic and the subregion is also on track to hit the Burgundy-wide target of becoming carbon neutral by 2035. The aim of these initiatives is to improve the vineyards’ health and protect the local industry for the years to come.

Read more about the potential of Burgundy’s 2022 harvest here.

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Champagne Producers Fight Against Zero Herbicide U-Turn

stormy skies over champagne vineyard

Winemakers in Champagne have written an open letter – published in Le Monde on the 6th of December – that voiced their opposition to the professional bodies’ reneging on a commitment to phaze out the use of all chemical herbicides in the region by 2025.

The date was significant: it was the day of the Annual General Meeting of the Association Viticole Champenoise (AVC). At the AGM, both the Syndicat General des Vignerons (SGV) and the Union des Maisons de Champagne (UMC) had officially announced – five years previously – that herbicides would be banned.

Jean-Marie Barillère, former president of the UMC, commented in 2018: ‘There are only two possible outcomes: either we move forwards or we are forced to move, with all the risks the latter entails in ecological terms, in terms of image and therefore in economic terms for our industry and our businesses. I prefer to forge a path towards a virtuous Champagne, rather than keep dwelling on the past.’

Maxime Toubart, president of the Syndicat General des Vignerons, also said at the 2018 AGM: ‘Our objective is, in a few years’ time, to be able to talk about a 100% sustainable Champagne, that takes its commitments seriously and can be held up as an example, and which can proudly proclaim: zero herbicides.’

Despite previous assurances, in 2022, Toubart refused to add the zero-herbicide policy to the cahier des charges: the Champagne appellation’s rulebook. Because of this, the dispute between the SGV, the Association Biologique Champenoise (ACB) and a union of organic growers, has only gained momentum.

President of the ACB, Jérôme Bourgeois, commented: ‘It is unacceptable that a prestigious appellation like Champagne can even imagine walking back a core environmental promise made five years ago, especially in today’s ecological climate.’

While the main Champagne body (the CIVC) didn’t comment on the open letter at the 2022 Annual General Meeting, David Châtillon – UMC president – did speak about the importance of preserving ‘Champagne’s perceived image’. Promisingly, he also made it clear that the Champagne region is committed to its zero-herbicide pledge, although no deadline was given.

In their address, Toubert added that ‘Champagne was greener than it ever had been before.’ This was supported by Arnaud Descotes, the CIVC’s technical director, who highlighted that the new herbicide law brought in last year has restricted the number of treatments permitted, as well as which herbicides are allowed.

Whether the initial deadline to rule out herbicides by 2025 will be met remains to be seen. However, one thing is for sure, those who signed the open letter are still keeping up the pressure: ‘We, Champagne winegrowers, Champagne houses and members of cooperatives, call upon the SGV and the UMC to continue implementing their progress strategy by respecting the deadline of ‘Zero Herbicides by 2025’, embracing an effective and sustainable commitment of our sector, in the interests of all stakeholders in the Champagne region and our fellow citizens.’

Read more recent Champagne news: Moët Hennessy’s Champagne Stocks Running Low.

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Christie’s London Auction Reaches Over £2.12 million

Christies flag hanging outside building

Christie’s recent Finest and Rarest Wines & Spirits sale that took place in London on the 1st and 2nd of December reached over £2.12 million at auction. Lots included anniversary collections from Champagne Philipponnat and California’s Ridge Vineyards, as well as six bottles of Pétrus 2000.

The top lot was made up of six bottles of Pétrus 2000 and fetched an impressive £30,000, which was the same value as 12 bottles of Le Pin 2018. Representing Burgundy, six magnums of Georges Roumier, Bonnes Mares 2005 went for £25,000.

Other notable wine highlights in the sale included some very special lots unearthed from King’s College Cambridge’s cellars: six bottles of Château Lafite-Rothschild 1959 that raised £20,000, 12 bottles of Taylor 1948 Port that went for £11,875 and six bottles of Croft 1945 that sold for £6,875.

The London sale celebrated Ridge Vineyards’ 60th anniversary. The collection comprised wines from each of its six decades and raised a total of £117,075. Mixed lots consisted of bottles, magnums and large formats of the leading Napa producer’s most exclusive wines, offered straight from its cellars. The star expression was undoubtedly nine magnums of Ridge Monte Bello that sold for £7,500.

Another key milestone the sale paid honour to was the 500th year anniversary since April de Philipponnat arrived in Champagne in 1522. The Champagne house presented 11 lots direct from its cellars and all of them sold, raising a total of £13,763. Particular highlights included three magnums of Clos des Goisses L.V. 1996.

A spokesperson from Christie’s commented that buyers from 22 countries, across five continents took part in the auction. Interestingly, millennial collectors were well represented, with 46% of new registrants being part of this demographic.

Read more about the recent Hospices de Beaune Burgundy auction here.

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2020 Château Mouton Rothschild Label Unveiled

Painting on 2020 Mouton Rothschild label

Château Mouton Rothschild has unveiled its 2020 label by Scottish artist Peter Doig. The renowned figurative painter settled in Trinidad in 2002 and divides his time between there and Scotland. Doig is the first British artist to have been commissioned to paint this leading Bordeaux château’s label since Lucien Freud in 2006. Other famous British contributors include (formerly) Prince Charles in 2004 and Francis Bacon in 1990. 

The initiative to invite an artist to adorn the Château Mouton Rothschild bottle label with a painting first began in 1924 with the poster artist Jean Carlu. 

The 2020 label is of a dreamlike scene showing red grapes growing under the light of a full moon with workers in the vineyard. Doig has drawn parallels with other renowned artists such as van Gogh, Bacon and Cézanne who have all painted farm or vineyard workers. The main figure in the centre of the piece – Emheyo Bhabba – is one of Doig’s close connections and muses. A Trinidadian cuatro player, Emheyo has previously performed in one of the artist’s previous exhibitions in Paris using this four string guitar.

‘The painting shows something of what goes on behind the scenes in the production of wine, what happens offstage, as it were’, commented Doig. ‘It’s a sort of ode to workers, to all those involved at the various stages of making a wine before it’s finally bottled. It’s a dream with a romantic streak, as if someone spontaneously decided to sing in the vines. It’s a moment of poetry, where you can take your time. It’s neither really day nor really night, but rather something in between, between waking and sleeping. It is possible to see it as a progression, a dream journey in the world of the harvest.’

Commenting on this new label, Julien Beaumarchais de Rothschild said: ‘We wanted an artist who uses canvas and pictorial material to express figurative subjects.’ ‘Unrivalled as a colourist, Peter Doig focuses entirely on painting and has become one of his generation’s foremost exponents of the discipline, holding exhibitions all over the world. There is something very special about his technique and his universe that sets them apart in contemporary figurative art. His subjects are very varied, his painting resists any classification: he has succeeded in creating his own, inimitable world.’

Take a closer look at the 2020 label and at previous years’ here.