Wine Investment Question (6 August)

The following exchange took place by instant message on a wine forum and I thought readers may find it interesting. The person who is asking the questions is fairly young for a wine lover, and lives in a small country in the northern hemisphere, for the purposes of this exercise, we will call him Tom.

Tom: I am looking into going into Australian Cult wines. Could you please list Australian wines you consider cult and if possible info about them. Thanks in advance.

TORB: When you say "going into" tell me more please. As an importer, for investment, or what?

Tom: As a collector, I know these wines will age good and well. I would like to buy some for drinking while others maybe for investing

TORB: I don't want to dampen your enthusiasm but "cults" are for mugs. The reason I say that is two fold. First, they cost far more than wines that are just as good. Secondly, trying to make a profit from them is a mugs game, especially when you are not in Oz. If you want to buy for drinking/cellaring I am happy to help.

Tom: Well I would like to cellar some of those wines and drink them but some of those high RP scored wines can be in 10 years be the next Chateau Petrus. This is the list wineries that I am interested in:

Torbreck
Kay Brothers
Binder Wines
Wild Duck Creek
Clarendon Hills
Fox Creek
Mitolo
Greenock Creek
Tatiarra
Chris Ringland
Burge Family
Kalleske
RL Buller Calliope
Amon Ra Godolphin
Colonial Estate

How much Greenock Creek Block Shiraz 2001 case would cost in Australia (was rated 100RP)?

TORB: At this point I asked for his email address so I could provide a more lengthy response.

TORB Responds: Where does one begin to discourage this point driven madness? As far as list of wines is concerned, I have wines from eight of those producers in my own cellar, and although I have access and could probably purchase wines are from the majority of the rest reasonably easily, have chosen not to do so. Even those that I have purchased from, have been done so for one reason and one reason alone, I actually like the wine.

The thought of how many points Robert Parker has awarded the wines, or anyone else for that matter, have not entered into my purchasing thought pattern. In many cases, and this is important, the wines have been purchased before Robert Parker's points have even been published.

Why is that important? The answer that is simple. Once the wine is awarded a stratospheric score by Parker, the cost goes up exponentially as the greedy sharks in the distribution chain take advantage of the feeding frenzy of the buyers who make their purchasing decision based on Parker's scores.

The only way to make real money on these Australian wines, which wind up getting high Parker points, is either be in Australia where access is easier, or to get lucky enough to be able to find a label that Parker eventually rates very highly. If you live in Europe, the chances of either one of these two is pretty low.

Whilst some of the wineries listed above make some very good wines, not all of them will be rated highly, and if they are purchased in the northern hemisphere after they have been rated very highly, the chances are those in the distribution chain will have already absorbed a large percentage of the potential profit.

There are a couple of other factors to take into account here as well. A lot of the highly rated Bordeaux classics, have a very long history and track record of producing outstanding, very long-lived wines. Only about five wineries of those on this list have been in business for more than about 20 years. What also has to be seriously questioned is the ageing ability of many of the wines produced by these wineries. Based on my experience, the majority of wines produced by these wineries will probably the best consumed between approximately 7 and 12 years of age. There will be some exceptions to that, but they will be in a minority. This age worthy factor is important when considering investing in wine.

Parker's influence on Australian wine also needs to be considered. A number of years ago when Australian wine was "the newest in thing”, a high Parker score would send the market into a frenzy. Nowadays, unless a wine scores something like 96 points and is under $30, there isn't a stampede to buy it.

Finally, just because the wine scores a very high score, does not mean that the purchaser will actually like the wine when they pull the cork. So after all this, if you are insistent upon buying some of these wines because they are "cult" be prepared to pay a hefty premium for doing so, and the possibility that should you be stuck with them, you may not even enjoy drinking them.

If you want to invest in something, wine and Australian wine that, would be about the last thing I would consider.

 © Ric Einstein 2007