"However, the company noted a diminished impact of Parker points on prices in November 2014 compared to November 2009, tracing a shift that shows “less of a premium for top scores, and less of a discount for lower scores, than there was five years previously.”
In addition to this development, TWIF tracked a decline over the same period in the premium commanded by Bordeaux wines holding a 100-point Parker score. It found that the average price of a top-rated wine had fallen from 18 times that of a wine scored below 90 points in November 2009 to around 12 times higher by November 2014. (see chart, below left)"
I’m not at all surprised, and what I take away from it is that Parker truly is smart, as he sold the company at nearly the perfect time, cashing out for almost top dollar (we presume, of course) at the very cusp of when his influence - his brand, essentially - is declining. Brilliant.
I’m not sure that he sold because his influence is declining, and he perceived that and acted on it; rather, I think the fact that he is less active due to health reasons is the reason for both his decline and his desire to sell out. But either way, good riddance.
Alas, Todd, not an ounce of brilliance or calculation lurking there. Alan is right about the health issues, and the rest was happenstance. Galloni was groomed as heir apparent and given some time by arrange financing to buy Parker out. When Galloni failed to do so, some investment bankers in Asia, including Lisa Perrotti-Brown’s husband, cobbled together a deal and sold it to the present owners, who must be royally pissed just about now.
In addition to everything else, Parker’s closing of the Squires board and loose-cannon behavior after the sale have surely hastened the decline in influence…
I tend to agree with Todd, I think. The general buying public, even at the level being discussed, is not as plugged in as you obsessive people here ( ). I’m not sure most buyers know that he’s less active, is having health issues, etc. I think he saw the writing on the wall and cashed out just in time. I’m sure that his health issues added to the ease of his decision, though. And Klapp probably had something to do with it, too.
I disagree - I think the ‘health issues’ are his public excuse, as it is nothing new. I think it was very purposeful, and seemingly very smart.
Regardless, I’m a bit confused by the reference above, that Lisa P-B ‘sold it’ to present owners - isn’t she the primary owner/boss now? I believe it was sold TO her, with her at the top space in the investment capital fund that bought it?
Probably also factoring in were the extremely high number of 100 point wines in 2009 and 2010. Prior to those releases, I’m pretty sure the lowest price anywhere in the country for a Parker 100 point Bordeaux was close to $400. Not the case now, I know you can buy 2009 hundred pointers for $199 all day long.
You may disagree, but no, all the way around. Absent the health issues, there would have been no sale in the time frame that it happened. They are no excuse. He can barely walk, and has been on pain-killers for years. He did not need the money, and indeed, is giving a lot of it away. More to the point, Parker is incapable of understanding that his influence has diminished. Lisa and her banker husband teamed up with his fellow bankers and sold to a couple of wealthy Chinese. Her piece of the action was going from nobody at WA to editor, but not even Parker’s boss, as he holds some sort of honorary chairman or president title and may still have a non-controlling small piece of equity.
The purchase of the WA aside, I don’t think the article is particularly insightful. It quotes people from the Wine Investment Fund - a sure sign of higher-than-average IQs.
However, the company noted a diminished impact of Parker points on prices in November 2014 compared to November 2009
Well, in late 2008 we had a huge financial implosion and 2009 was the last year people were paying stupid prices for wine for a while. In 2010, wine mags were writing articles about people realizing that they could pay less and still get good wine and for the next few years every now and then you’d read comments here and there about whether the lowering of people’s price points was going to be a permanent thing. The Chinese stepped up for a minute but Parker’s influence there wasn’t nearly as great as it was in the US, and by 2014 the Chinese seem to have become less dominant for Bordeaux pricing.
If the people quoted actually run an investment fund, how can they not take into account other macro-economic events that are entirely unrelated to the sale of the WA? Did they run housing investment funds before getting into wine?
In his photos, Parker has been looking increasingly like a homeless guy and it seems as if he has serious health issues too, and though I don’t know him I wish him a comfortable retirement. But let’s not confuse correlation with causation. That wine investment fund should forget about Latour and buy some SQN before they start talking about his lack of influence.
I mostly agree with Alex O. I think there are other conclusions that could be reached from those numbers. The difference in price between 100 pointers then and now is at least partly a supply and demand issue. 2009 and 2010 brought a whole bunch of supply to the 100 point club, including 100 pointers that (i) were not considered part of the upper echelon of BDX wines and (ii) were in in plentiful supply. The prime example being Pontet Canet. Smith Haut Lafitte, Clos Fourtet and Leo Poyferee are other examples. Ten years ago, $300-$350 was the minimum (for a 1990 Montrose) and the remaining 100 pointers available were the big boys (Latour, Lafite, Lafleur, Cheval Blanc, Margaux, Haut Brion, Ausone, Petrus) that price above $300 in even bad vintages (1990 Beausejour Duffau, 2000 Pavie and 1989 Clinet being the outliers). Nowadays, it is $200 - $250 for a 100 pointer. 1990 Montrose is now $500.
I also agree that Parker’s ego would never let him believe that his influence was waning. I think it is more a case of him getting old and wanting to capitalize on the brand before it became too late.
Just think of how rich Parker would be if he sold all the real estate he owns in all of his detractor’s heads.
The points that Greg and Mike bring up are completely obvious yet completely absent from the article. The article as written would fail an Econ 101 overnight homework assignment. Never mind pass for published analysis.
While even the tiny slice of the general public who’d be buying hundos may not be as obsessive as most people here, I imagine they have enough grasp of scarcity in economics to realize that those bottles aren’t nearly as rare as they once were.
Uh, Parker’s own publication of that and other medical details on the Squires board? Reports of those who have seen him at WA-sponsored and other events in the past couple of years?
). I’m not sure most buyers know that he’s less active, is having health issues, etc. I think he saw the writing on the wall and cashed out just in time. I’m sure that his health issues added to the ease of his decision, though. And Klapp probably had something to do with it, too. 