Occupy the Cellars

If recent wine auctions in the U.S. and Hong Kong are any indication, the market for the world's top wine collectibles is headed into some wild uncharted territory.  For several years now in the Far East, wealthy long-time collectors, well-heeled newbies and speculators alike have focused their attention on a handful of top Bordeaux.  During the past year, happily, the speculative fever for clarets has cooled a bit.  The bad news:  many of the same collectors in Hong Kong and China are now targeting Burgundy, a region whose best family estates make tiny quantities of their top bottlings.

Thus prices for posh labels from the most glamorous producers have gone through the ceiling in a very short period, thanks to desperate pursuit by a minuscule percentage of the wine-drinking population.  And evidence suggests that their interest is spreading beyond the bluest of the blue-chip Burgundies.  Can top Barolos, northern Rhones and even Napa cult bottlings--pricey as they already are--be far behind?

Is this the last gasp of conspicuous consumption before the next down wave in the world economy?  Or are we seeing a paradigm shift in which celebrated wines virtually disappear from the marketplace as new buyers armed with strong currencies overhunt Europe's best wine lands?  Since Burgundies are made in very limited lots to begin with, it doesn't take much available cash to skew the market for the top examples.

Historically, Burgundy pricing at the cellar door has been stable--in direct contrast to practice in Bordeaux, where prices can fluctuate widely depending on the perceived quality of a new vintage and the likely market demand for the latest set of wines.  Up to now, it has been very difficult to accuse Burgundy's top family domains (or those in the Piedmont or Rhone Valley) of greed, or of turning their backs on their long-time customers in favor of new clients willing to pay more.  But there's simply no way that Burgundy's better producers can ignore the strong demand for their wines, and many have taken sharp price hikes for the 2009s and 2010s.  Middlemen along the way have similarly been tacking on richer mark-ups for the items in greatest demand.   Here's how one top producer in Vosne-Romanee explained to me the sharp price hike he took on his most lusted-after 2009s:  "I was getting the blame but not the money for the tripling of prices for my wines on the Internet.  I'd prefer to get the blame and the money."  Top producers in Burgundy, Bordeaux and California are even selling their wines directly through the auction houses, thereby putting further pressure on the supplies available to thirsty consumers.

But cheer up: even if the top 1% of buyers is spiriting away the greatest wine collectibles today, matters are hardly grim for the rest of us.  Wine speculation is always a risky business--and wine is far from the most liquid of assets--but there has never been a better time to be a wine drinker.

If you can afford $15 to $20 for a good bottle you'll do just fine, provided you're willing to forgo the biggest names in each category.  The range of choices for American wine lovers is staggering today thanks to better winemaking than ever before and to cut-throat competition at virtually every price point up to thirty bucks.  Producers are fighting to maintain or improve their share of the U.S. market, and importers, distributors and retailers must often reduce their mark-ups to hit sweet spots in retail pricing.

Some of the most fertile sources for excellent wines at affordable prices, such as southern France, the Loire Valley and Spain, are prominently featured in this month's collection of recommendations.