“Speculators are ruining it for everybody”

Thus spoke an old friend who has been in the business for years. He has never seen so many non drinkers buying all the top wines, and holding on to them. He says he has been in warehouses from Miami to San Francisco packed with wines especially top Burgundies which the owners never touch, waiting for the right moment to sell.

Well I am a free market guy; and if Burgundy prices have gone crazy, I will sell them and put the money into Bordeaux. So I am not complaining, but I do get his point. Last year, wine easily beat the pre jitter stock market, and since 10%+ figure is being touted, I suspect there will be more people entering the market for investment.

In the end, there does come a breaking point. And we must be pretty close now. Yes there are people for whom a four figure bottle is chump change, but most people don’t and won’t drink these wines. I can’t see the market going up from these levels, as the number of drinkers is small, and the only other market for these wines are other speculators.

Over the years, I have met a few speculators; there are even some on Wine Searcher with pretty obvious names, and a few auction house sales contain cellars which clearly are new collectors looking to make a quick buck. But I have no real feel for how much is driven by speculators, but I suspect much of the action is in Burgundy, and to a lesser extent Barolo and Pomerol.

I have a feeling that the next couple of years will see some downward pressure in the market, and if interest rates go up, and economies show signs of recession, the pressure will be quite strong.

Aha – wine speculators do exist? After my recent thread I doubted my senses are still intact. I am happy that everything is ok with me. And btw: Needless to say that I share the opinion of your old friend. Speculators are ruining it for everybody.

I don’t think anybody doubted it. There are wine funds, wine trusts, there are private buyers speculating, and plenty of other people looking to profit. I have had a couple of e mails about people on this very board making money out of Cornas. And why not?
There is this strange idea that wine is pure, and should be drunk only by acolytes who know the magic words. Wine is a commodity, and as such, there will be people looking to profit from it. Heck, I am buying modern Right Bank Bordeaux, knowing that my son will either drink them when they are ready (I will be in my dotage years) or it will be an excellent diversification of our portfolio. Nothing sinister in that.

So you don’t share the opinion of your old friend?

I’m buying the new crop of highly rated Ports. Most have a best from date of 2030! I’ll be lucky to make it there! My children can enjoy them. Same as some of the big name 2015 CdP I’m buying in mag. Good investments or good drinking for my kids!

No I don’t. If I were starting, perhaps I wouldn’t be so blasé about it, but I don’t think anybody needs to buy DRC, and if you look, you can find affordable alternatives. As we saw in the Keller thread, there are plenty of good less expensive wines, which you can buy. In Burgundy, you can buy lesser Grands Crus, or less hyped ones. Chapelle and Latricieres come to mind. I think I mentioned before, buying a full case of Rossignol Trapet Chambertin 2015 for the price of a single bottle of weak La Tache.

Interesting subject for sure. While I certainly feel this way to a large degree I also happen to look at it another way as well. The market is forcing the type of people you’d find on this board to discover the next best up and coming regions that are still under the radar price-wise and quality-wise, and to me that is a good consequence of the matter at hand. For example I look at a region like Alto Piemonte and see tons of potential for further development in those wines. Same with Champagne if you focus on grower wines specifically. Give it another 10-20 years and I’m sure those two regions will see a massive uptick in popularity and price. This whole thing is a vicious cycle but it keeps forcing new discoveries and an overall gain in quality of the wines being produced which nobody here can argue is a bad thing.

But at a certain point Elliott, perhaps there is a margin of diminishing returns, as how many truly great terroirs are yet undiscovered? All of the speculation, and indeed hype which many of us are a part of, is part of the negative, as many of our personal favorites get snapped up.

Mark, I don’t consider fine wine a commodity like soybeans or pork bellies. Those items are interchangeable, sold in bulk, and pretty far from any artisanal intent. I look to the maker of any (essentially) hand-made object for guidance how he or she would want their products regarded and treated; a winemaker has to make a living and should be rewarded for their work but I can’t imagine that they’d be indifferent to the fate of their wines.

There are fewer and fewer “craftsmen” all the time; how about sparing a few things from the endless chasing of a buck?

I think speculation is negative because the hyperbole prices drive the prices up for many more wines and not only those in very high demand. I bought Rossignol Tapet frequently and even the prices for this wines doubled over a few years which cannot be explained by normal inflation.

It’s been a long time since I’ve posted on this board, but here goes.

Count me in the camp that yes, speculators are ruining it and I write this fully conscious that as a Burgundian producer, I have benefited from the current excitement for the wines of my region.
The view that wine should only be drunk by “only by acolytes who know the magic words” is of course a huge exageration and I won’t spend any time defending that notion. I am happy with all manners of clients. But I cannot muster any enthusiasm for the notion of wine as a commodity. Here’s my beef: As a producer, I wish my bottles to go well beyond just being successfully sold and consumed. I wish them to enthuse, to thrill, to excite the people who end up drinking them. The more a wine gets traded and shipped around the world, the smaller the chance that it will be able to do so and the less it does so, the more this impacts the reputation of my winery. Consequently, I see it as good business to do my utmost to avoid my wines falling in the inventory of funds or compulsive flippers.
I am not opposed to people selling off their cellars, in full or in part. Tastes change, life circumstances too and there are many good reasons to sell wine. On the other hand, I have certainly encountered people who buy wines they buy solely with the intention of flipping down the line and can’t think of this as a good thing for our domaine or the pleasure of the people who drink our wines (which are practically the same thing).
The other thing is that it is difficult to entirely detach the notion of pleasure from price. Certainly as a consumer I have enjoyed some wines more when I obtained them for a keen price or thought to myself “this is good, but for the price I was expecting more”. Speculation has contributed to price hikes (it’s not all producer driven!) and it has become harder to enjoy wines in a more casual,simple way. Again, I think that in the long term, this is going to be detrimental to our region.

It’s a difficult equation balancing current Burgundy fever with long term best strategy for the region, all the more as just one producer. The example only applies so much, but I’m not sure how much Leoville-Barton benefited from Anthony Barton’s extremely conservative, reasonable pricing policies.

Just my $0.02

Mark - would you like a sealed box of 36 Donruss 1988 wax pack baseball cards? My father had a case of them left over after the season and I had two young sons and a new house. I took them, put them in the back of a closet, and forgot them until about a year ago. Current price on Ebay is probably less than 1988 retail. This stuff is cyclic. You just have to wait out the hoarders and then when they get tired of waiting, you buy the stuff at a discount and thank them for paying for storage.

Jeremy - Well put!


Very true in so many respects. But fear not, maybe some modern day Robin Hood will come along and liberate these bottles/$$$ from the evil clutches of the robber barons.

I can’t change the free market, though I’m more likely to buy Bairrada, Chinon, Roero or Vespolina than switch to Bordeaux. After all it’s only a handful of years ago that many of us were saying Bordeaux had jumped the shark in terms of rapacious pricing. For me there is still poor value in that region.

Is it just speculators? I’d be surprised if there weren’t also more people (than before) buying for the status symbol of having a classy cellar. Buying the hot names because only the best is good enough. Indeed I see these as the people who started the recent escalation in prices, whilst the speculators are the ones who accelerate those price rises by jumping on the bandwagon.

Will prices crash? Perhaps when the music stops, there won’t be enough drinkers willing to pay the inflated price. However that’s a way off. In the meantime, there will have been plenty of get rich quick shark investment schemes, who promised riches, but who never bought the wines they should have done, or indeed any wines at all. Jim Budd’s Investdrinks site ought to be sober reading for anyone thinking wine investment schemes are a sure way to beat the stock market. For now also, I see no decline in the fortunes of the super-rich (be that the top 1% or any other arbitrary figure). If they continue to prosper, and enjoy the prestigious wines, then the demand for blue chips will remain and soften the risk of speculators over-reaching. We shall see in time, and I’m not some fortune-teller for investments - for me wine is for enjoying, ideally with friends & loved ones.

A final thought that always makes me chuckle. Wine is not a liquid investment.


I agree Jeremy.

Just got my 2 bottles annual allocation from a small shop in Aix en P … (Morey 1er and Malconsorts…) . At least, some do not exaggerate the mark up ( although I don’t know the gate price) but it is painful… (I don’t even get access to any Pere & fils in London any more… (nor in Aix but he has to share what he gets between customers and am privileged…)

It will be detrimental, not only to a specific region, but to wine overall. But it’s not just speculators. There was an article the other day in the SF Chronicle about the NBA players who are “into” wine. Hollywood, sports figures, performers, finance people - they’re all interested in wine these days. And that’s a fad. Eventually it will be something else. That fashion however, has resulted in a lot of “top” end wines, or rather expensive wines, and it’s hand in hand with the speculators who are buying up the old-world wines for investment purposes. There are people who created investment vehicles for them and that’s also a part of it. And on this board, there are people who are asking about how they can quickly “build” a cellar, kind of like getting a landscape architect to plant a few fully-grown trees to trick out your house so you don’t have to learn or wait.

But wine is in the end, a commodity. Yes, it changes from year to year and no, it’s not as indistinguishable as one wheat grain from another, but actually, flour is very different depending on where it’s grown and what cultivar it comes from. We’ve reduced it to a commodity, but it doesn’t have to be. As long as wine is a fashion item and a signifier, there will be a lot of speculators. Eventually they’ll move on, leaving a core of people still speculating and a bunch of others who may be able to buy clearance wines or who may never be able to afford some of the wines that have become more expensive. I’ll never forget reading the quote from the owner of Ausone, where he said he raised his prices because good wine should be a luxury.

So I guess in the end, I don’t really mind. My life is not lesser for not drinking Ausone weekly. There are wines that I would drink more often were the prices lower, but even then, for me, it’s far more interesting to drink a variety of very different wines than it is to drink the same wine most of the time. So in some ways, it’s a bit of a blessing because there’s new wine appearing all the time.

As to the possibility of how many great terroirs there are - we really have no clue. The planet is very large and the area mapped out is probably less than one percent. In the United States, we haven’t even really discovered most of the possibilities in California and there are at least 35 - 40 other states where one might imagine making credible wine. I would have discounted Texas, but apparently there is potential there too. And across Europe there are ancient areas waking up. In South America nobody knows but why wouldn’t we find exciting regions in the southern hemisphere?

Thank you, Jeremy. I know that many producer think like you! Wine is for drinking. And Anthony Barton is worldwide respected not only for his fine wine but his fairness also.

Respectfully, I’m hard pressed to think of a worse wine in which to invest for monetary gain than Port, with the possible exception of Sauternes.