Jeannie Cho Lee MW shares her insights on fine wine investment and auction trends for a Hong Kong audience in 2011. Powerpoint includes buying tips and undervalued picks identified by Jeannie Cho Lee MW.

1. Fine Wine Investment and
Auction Trends
November 2011
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2.  A comparison of 10 most
recent physical vintages of
the 5 Bordeaux First
Growth versus 100 of the
most sought-after fine
wines
 Key finding: Investment in
blue chip wines is still
worthwhile despite recent
dip
 Prices have now corrected
to June 2010 levels but are
still double Jan 2007 levels
Source: Liv-Ex.com

3.  An overview of the most
recent physical vintages of
commonly traded wines from
Bordeaux, Burgundy, the
Rhone, Champagne, Port,
Italy and the New World
 Key finding:  13.23% year
on year indicating that not
only Bordeaux but fine wines
from rest of the world are also
experiencing upward price
movements
Source: Liv-Ex.com

4. Index Summary as of October 31 2011
Index MOM YTD 1yr 5yr
Liv-ex Fine Wine 50 -5.8% -9.3% -1.0% 135.2%
Liv-ex Fine Wine 100 -4.5% -8.4% -2.4% 86.2%
Liv-ex Claret Chip -5.9% -12.2% -5.9% 107.0%
Liv-ex Fine Wine 500 -3.6% 7.4% 13.2% 96.2%
Liv-ex Fine Wine -4.3% -4.2% 2.2% 105.7%
Investables
 Over the past five years Bordeaux first-growth wines (10 most recent vintages)
have experienced the highest price growth compared to other wines
 Recent YTD price movements confirm trend toward price correction as a
reaction to extremely high pricing of Bordeaux en primeur over the past 2 years
and their subsequent boosting of prices for bottled vintages
 Overall, global fine wines are still at an upward price movement over the past 5
years
Source: Liv-Ex.com

5. Top 10: Average price per case on merchant’s
price list for last five vintages (HK$)
Record-breaking prices
Record-breaking prices
Domaine Romanee Conti 273,868
Pétrus 262,289 Bloomberg (Sep 2011):
Bloomberg (Sep 2011):
A case of Romanee-Conti 1990
A case of Romanee-Conti 1990
Le Pin 167,689 Domaine de la Romanee-Conti sold
Domaine de la Romanee-Conti sold
Leroy 154,668 for around HK$193,000 per bottle in
for around HK$193,000 per bottle in
Acker, Merrall & Condit
Acker, Merrall & Condit
Lafite 127,685
Ausone 108,324 Decanter (Oct 2010):
Decanter (Oct 2010):
33bottles of 1869 Lafite Rothschild
bottles of 1869 Lafite Rothschild
Latour 102,986
became the world’s most expensive
became the world’s most expensive
Lafleur 84,423 wine sold at auction, fetching
wine sold at auction, fetching
Mouton Rothschild 75,280 HK$1.81 million each
HK$1.81 million each
Haut-Brion Blanc 73,221
Source: Bloomberg.com; Decanter.com
Drinks Business November 2011

6. Biggest Risers in top 50 Biggest Fallers in top 50
Label Rank Last Year Move Label Rank Last Move
Year
Pichon Baron 22 69 47
Le Pin 49 22 -27
Vega Sicilia 36 68 32
Palmer 40 14 -26
Lascombes 43 70 27
Ausone 23 9 -14
Leflaive 28 54 26
Eglise Clinet 47 35 -12
Léoville Poyferre 26 49 23
Yquem 24 13 -11
Pichon Lalande 30 50 20
Krug 34 24 -10
Cheval Blanc 7 20 13
Sassicaia 27 21 -6
Clarence Haut 44 57 13
Brion Rayas 45 39 -6
Ducru 14 25 11 Salon Mesnil 31 26 -5
Beaucaillou
Haut-Brion 37 33 -4
Opus One 25 36 11 Blanc
Source: Drinks Business November 2011

7. Hong Kong: top auction houses’ sales and revenue
Auction house No. of HK sales No. of HK sales No. of HK sales 2010 Revenue HK$
2010 2011 planned 2012
Acker Merrall & 6 6 6 493m
Condit
Bonhams 2 2 2 25m
Christie’s 3 6 6 169m
Sotheby’s 8 6 TBD 410m
Zachys 3 5 5 150m
Source: Drinks Business November 2011

8.  Lafite’s dominance has been reduced but it
is still the world’s most powerful fine wine
brand
 China (to some extent in coastal cities) and
Hong Kong tastes have broadened over the
past few years beyond Bordeaux
 Most promising wines to watch are still in
France, mostly in Bordeaux, but Burgundy
is also growing, especially noticeable in
auctions in 2011
 For most international fine wine brokers
and auction houses, Asia now makes up
more than 50% of their revenue
 More & more mainland Chinese are
buying wine but sticking to the top 20-25
chateaux & iconic producers like DRC

9.  For investment purposes, go for left bank Medoc wines; if
branching out to other regions/styles, consider Burgundy;
outside of France, Italy and the US are the top countries
for iconic wines with strong secondary market trading
records
Look for up and coming
Look for up and coming
 For drinking purposes, in the near term, go for Cru superstars that are still under-
superstars that are still under-
Bourgeois level reds or St Emilion Grand Cru wines from valued such as:
valued such as:
good vintages that were under-rated such as 1999 or 2001
 For long term drinking purposes, many petit chateaux
from 2005 and 2009 made excellent wine that will be Beychevelle, Duhart Milon,
Beychevelle, Duhart Milon,
ready to drink in about 5-8 years time Pontet Canet, Gruaud Larose,
Pontet Canet, Gruaud Larose,
Rauzan Segla, Leoville Poyferre,
Rauzan Segla, Leoville Poyferre,
 With the wine auction markets softening, early 2012 may
be the time to pick up some bargains; alternatively, try Alter Ego, Grand Puy Lacoste,
Alter Ego, Grand Puy Lacoste,
fax/phone bidding in NYC or London auctions where Leoville Las Cases, Montrose,
Leoville Las Cases, Montrose,
final hammer prices are lower Pichon Baron
Pichon Baron
 Consider cost of shipping, transport and handling when
buying fine wine and most importantly, do your
homework before you buy!