Dr Vino’s wine blog

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“I’ve bought so much art, so many guns, so many other things, that if somebody’s out to cheat me I want the son of a bitch to pay for it,” he told me, his color rising. “Also,” he said, smiling, “it’s a fun detective story.”

Indeed it is. That was billionaire Bill Koch as quoted in the fantastic New Yorker story about potential fraud in the fine and rare auction market. The story surrounds Koch’s four bottles of 1787 Lafitte (sic) allegedly from the cellar of Thomas Jefferson. He acquired them for $500,000 total and, upon learning that their origins could not be verified, he has now spent $1 million in investigative and legal action.

Great stuff–consider the article by Patrick Radden Keefe an absolute must read. It’s got a great cast of characters ranging from a dead president, the billionaire sheriff, the possibly gullible and definitely eager auctioneer, the gumshoe, the man with a hidden past, prone to excess going by the name of Hardy Rodenstock…All written in the classic, thorough, and engaging style of the New Yorker. Pass the popcorn and savor it like a glass of 45 Lafite–a real one.

There’s a fascinating section about just how easy it is to perpetrate fraud in high-end wine since many of the wines are never opened, instead simply displayed. And when they are opened, a lot of times those pulling the corks don’t know what a certain wine should taste like, thus they can easily be defrauded, or it is many years after purchase, and the statute of limitations has passed.

Oh yeah, the rest of the issue is “the Food Issue.” Might as well pick it up and read the whole thing over the holiday weekend.

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The recent turbulence on Wall Street has caused some pain: Bear Stearns is laying off 240 people, the easy money of the yen carry trade is drying up, and bonuses are rumored to be only 25 percent of what they were last year if the year ended today.

How does this affect the auction market for collectibles? Billionaire Eli Broad recently told Bloomberg that he thinks prices will decline for the high-end art market. As the fall auction season kicks into high gear, auctioneers must be wondering if the same fate awaits them for wine.

I think not for three reasons. First, there’s gotta be a pretty limited number of people who would pay $100 million for Damien Hirst’s diamond skull, while fifty cases of 1982 Lafite can be broken down to 50 different buyers if need be. Even 25 percent of last year’s bonus still buys a lot of wine. Ferrari? Maybe that gets the ax, but wine stays.

Size matters too: total US wine auction sales last year were $162 million, strong growth year over year, but at the rate of a skull, that doesn’t even add up to an entire diamond encrusted skeleton should Hirst ever do one of those. The $1.7 trillion hedge fund industry may be down, but it’s by no means out. And if you’re trading down from big ticket art, why not shift into lower-ticket but still investment-grade wine? There are a lot of new empty cellars in Greenwich, CT and beyond just waiting to be filled up.

Finally, it’s tangible. At the end of a day trading, going home and sitting in the 55 degree cellar and looking at the wine is fun. It’s there. It’s real, unlike many mortgage backed securities or derivatives thereof. And alluring. It might even make you want to uncork a bottle. As Napoleon is reputed to have said, “Champagne. In victory you deserve it; in defeat, you need it.”

What do you think about the market for collectible wines this fall? Have your say in the comments below.

Select wine auctions fall 2007: (after the jump) Read more…

Sommeliers unite!
“Almost a dozen” sommeliers in Melbourne are boycotting Tasmanian wine from Gunns Limited because of a perceived deforestation through their new pulp mill. The wine waiters may not be the big guns but, according to one, “Gunns have got a lot of money and a lot of power and we don’t. But we have the power, not through money, but through influence.” ["Pulp friction"]

Red hot red wine
“Château Lafite Rothschild 1996 has been selling at £7,000 ($14,300) per case, up from £4,200 six months ago; Château Mouton Rothschild 1998 has been on the market for £2,600, up from £1,500; and Château Latour 2004 has sold for £3,200, up from £2,050.” [FT.com]

The new pink?
“Citrusy and bright, Picpoul de Pinet is lively enough to be an aperitif, complex enough to drink with cheese or seafood and — no small consideration — affordable enough to indulge in a second bottle while waiting for a perfect partner for more than food.” [LA Times]

Attention deficit
“Financially we don’t mean very much to the state wine distributors, compared to Robert Mondavi,” Mike Reynolds of Hall winery told CNN. “Distributors look at the bigger brands,” he explained, and “our volume does not justify their attention.” A good point in general, but specifically, maybe the $70 million Gehry-designed winery will get the distributors’ attention for the Halls? [CNN]

A contingent future
Buy six and get one…option? Yes, that’s the new futures policy at Cloof Winery in South Africa. Buy six bottles of the 2006 Very Sexy Shiraz and get one option to buy a bottle of their top wine, Crucible. No word on whether the options themselves are tradeable, or what the demand is. [allafrica.com]

* Slow Food Westchester: July 25, 6 - 8 PM. I’ll be helping out with the inaugural event for this chapter (convivium). We’ll taste seven great wines that also happen to be some hue of “green.” Plates restaurant, Larchmont, NY. $40, reservations necessary. Call Plates to reserve: 914.834.1244

* New York University: Buying and Cellaring, three sessions starting on September 25. Register here
* University of Chicago: Buying and cellaring liquid assets: one monster session, September 29. Register here
In both of these new classes, we will examine the red hot wine market. We will discuss where to buy wines, where to sell, how to store, and when to consume wines. In the longer, NYU course, we will devise a buying strategy for your budget and storage conditions and I hope we’ll be able to do the same in Chicago, even though the time is more limited. Both NY and Chicago will have tastings of collectible wines so be sure to sign up–especially, since the people enroll, the bigger the tasting budget is!

* New York Unversity: Becoming a Wine Expert. Six Wednesday evenings, starting October 17. Register here
This spring, one participant in the course said that he had waited two years to get into the class — I hope it was worth it! This, my core class, has the enrollment limited to 25 because of space limitations at the Torch Club.

* The Gourmet Institute: New York City, October 19-21. Register here
I’ll be participating on the panel “Eat the Web: Blogging’s Effect on the Food World,” moderated by Ruth Reichl. It’s very expensive (think two iPhones) but there are all those celebrity chefs whose food you can eat!

And I’m trying to coordinate an offline meetup, hopefully for next week…More on that very soon.

Liquid assets
“I’d bought the wine before it was even bottled, as futures, for $350, and I unloaded it for enough money to purchase a car.” Elin McCoy on her 1982 Chateau Lafleur in a piece on the wine market today. The bluest blue chip? Lafite. But could a correction be coming? [Bloomberg]

Blog buyout
Gary Vaynerchuck, video blogger and owner of the store Wine Library in Springfield, NJ buys out the social networking site, Cork’d. I wonder what Dan and Dan are uncorking tonight? [via Lenndevours]

BYOB in NYC
NY mag has a list of six BYOBs with decent wine shops conveniently located around the corner. [NY mag]

Crank it up to 11
“Another barroom brawl on the BB…hey, is that what BB really stands for?” -Commenter in the fray about point inflation over on eBob. Keep scrolling (post 242) to when Mark Squires compares Parker to Galileo! [eBob]

Related: “Lake Wobegon wines” [Dr. V]
Map of New York City wine shops [Dr. V]

Sabretts and Vega Sicilia
Wines from renowned collector Steve Verlin’s estate are being sold this weekend in Chicago at Hart Davis Hart. He sounds like he was quite a character based on this preview tasting in New York: “In keeping with Verlin’s quirky preferences, the Sabretts [hot dogs] were served at Monday’s dinner with the 1968 vintage of Spain’s most honored wine, Vega Sicilia Unico. There was also popcorn popped in truffle oil partnered with a classic champagne, Krug 1985, and Krispy Kreme doughnuts were washed down with Chateau d’Yquem 1976.” [NY Sun]

Bordeaux sighs in relief
After getting damned and slammed by Jancis Robinson, Bordeaux catches a break from Robert Parker for the 2006 vintage. He hails it as “superior to 2004.” The Medoc lives to see another day, St. Emilion can raise their head in public but Pomerol is the belle of the ball since the wines from there are “excellent across the board.” Dry white Bordeaux bounces back from irrelevancy as the Parkermeister joins J Ro in praising the wines this vintage. But RP only hands out three potential top scores, to Mouton Rothschild, La Mission Haut Brion, and Bellevue Mondotte of St. Emilion. Needless to say, none of those were on the Jancis short list.

Caution: fragile. May be fake
Have you ever objected when the sommelier at a fancy restaurant uncorks your wine and tests a sample himself? Then don’t buy wines from the 18th century, which now post-Rodenstock, are getting downright molested. Quote: “A combination of nuclear isotope analysis and gamma radiation and proton beam tests conducted by experts from the universities of Bordeaux and Manchester will be used to confirm the age of each glass bottle in the Antique Wine Company collection. The wine itself � extracted by hypodermic needle through the cork - will be subjected to molecular and chemical analysis.” [Decanter]

Cameron Hughes, in the house
Yesterday’s post about American negociant Cameron Hughes sparked a comment frenzy–including several by Cameron himself. He elaborates on the differences between his wines and private labels at grocery stores, his sales techniques, and even offers readers of this site 50 % off shipping using a discount code. See the comments.

After slamming the 2006 vintage last week saying it was “a great vintage for mushrooms and truffles, but less great for wine,” Jancis Robinson is back this week to sort through the rubble.

At the best properties there had been crucial work at the sorting tables, throwing away any split and rotten grapes as well as those which were most obviously underripe.

Wow. Triage tables. Sorting the wounded. Here were the survivors, per Jancis (full story):

Whites: Climens, Haut-Brion Blanc, Laville Haut-Brion, Pavillon Blanc de Château Margaux, Yquem

Left bank reds: Cos d’Estournel, Grand Puy Lacoste, Haut-Brion, Lafite, Latour, Léoville Barton, Léoville Las Cases, Margaux, Palmer

Right bank reds: Angélus, Arrosée, Conseillante, Evangile, Le Pin, Tertre Roteboeuf, Vieux Château Certan, Eglise Clinet, Lafleur, La Fleur Pétrus, Providence

POSSIBLE GOOD BUYS:

Bernardotte, Bahans Haut-Brion, Clos du Clocher, Grand Puy Lacoste, Haut Bages Libéral, Phélan Segur, La Tour Carnet

Back in London, the wine retailer Berry Bros & Rudd threatens to take a pass on large chunks of the 2006 vintage. “Having tasted the vintage I am convinced that 06 is not as good as 05 or possibly even 04,” Simon Staples told the Telegraph. “We will have no qualms about walking away from even the most illustrious châteaux if they do not offer good value.”

Related: “St. Emilion Grand Cru Classe, suspended!” [Dr. V]
“Bordeaux 2002: undervalued” [Dr. V]

How great it is
“2005 was my best vintage–until 2006.” Franz Pichler of FX Pichler in Austria told me at a tasting.

Why drink wine?
“Twenty five years ago people drank wine for three reasons: 1) allegedly because it made dinner better; 2) because it made the people at dinner better; and 3) to intimidate others. Now, the first two reasons are still valid but the third is to ensure you will have sex within six hours of drinking the wine.” –Josh Wesson, founder of Best Cellars, at a Vinexpo panel about “millennials” in New York yesterday.

All for one?
“It is a reasonably well-known fact that the largest buyer of classified growth Bordeaux…..with a heavy emphasis on FIRST GROWTHS, is the Asian chairman of a major…and I mean major company….of course all his activity is done through third/fourth/fifth party strawmen….and not one auction house or wine merchant would dare reveal the name(and they all know who it is)….purchases to the tune of 40-50 million dollars per year for about 4-5 years.” [Robert Parker, on his BB, ellipses in original]

Vodka, aka, diluted ethyl alcohol
“The European Union would define vodka simply as diluted ethyl alcohol, which is, of course, what it is. That suits members like Britain, the Netherlands, France and Austria, which wring “vodka” from anything from grape mush to sugar cane. The quotes are important here, because countries of the Vodka Belt around the Baltic Sea, which have distilled the stuff for centuries and produce two-thirds of the European Union’s vodka, insist their traditional use of grains and potatoes to make vodka should be enshrined in the definition. All else, they insist, is mere regional swill, and should be labeled as such.” [Serge Schmemann in the NYTimes]

Truth in labeling
“It might be disenchanting if the label also listed the chicken, fish, milk and wheat products that are often used to process wine.” Oh those? Not so much. But what’s this Mega Purple? [LA Times]

It’s spring time, which for us wine geeks doesn’t just mean crocuses and robins–it means it’s time to pay now for wine that won’t be delivered for another two years.

A friend called me on Saturday and asked if I wanted to claim a few bottles of Ridge Monte Bello 2006 allocation. I hesitated for a moment, thinking that nobody outside the winery has ever tasted the wine and the final blend is probably a year away from being constructed. Then I said yes.

Is this sheer folly? At least when Bordeaux futures start rolling out in the next month, journalists and buyers from around the world will have already ventured to the region to taste barrel samples and be able to offer a third party opinion.

But I figure Ridge is a Name You Can Trust. Which wines would you be willing to pre-buy without anything other than the weather report and some vague assurances from the winery about the current vintage being spectacular?

Perks
Become a non-executive member of the Board of Directors of UST Corp (NYSE: UST), which owns several wineries as well as Skoal “smokeless” tobacco, and you can get a $5,000 worth of the company’s wine! (That’s 555 bottles of $9 Columbia Crest.) Other officers get a similar allowance and the CEO Vincent Gierer gets a $6,500 allowance “to foster the use of the Company’s wine products at events they host.” Mmm, yummy wine products. Granted, some of this sum goes for “the maintenance and/or installation of security systems” for all that wine booty. But you’d think with his $6 million salary, he could have afforded that anyway. [SEC filings via footnoted.org]

Declines
Constellation Brands (NYSE: STZ), the biggest publicly traded wine producer announced disappointing earnings thanks to “pricing pressures that it blamed on rising supplies of competing Australian wines and reduced consumption in Britain.” The shares fell to a multi-year low on Thursday. [Forbes]

Rises
French wines tacked on two percentage points in the US market–at the expense of Australia, according to an AFP story. “The export figures show that we are going in the right direction. We must advance toward the path of committed reform,” said Louis Regis Affre, managing director of the Federation of Exporters of Wine and Spirits in France (Fevs). [Sapa-AFP]

Fakes
Sir Ian Kershaw, author of an award-winning two-volume biography of Hitler, said he was “immediately skeptical” when reading reports of the sale of an $8,000 “Fuehrerwein” at auction. Was it the fact that Hitler was a teetotaler? He doesn’t mention that but he points out that “a Tafelwein, a low-class table wine, was, even in 1943, not a particularly dignified present, even allowing for Hitler’s scant knowledge of wines,” he said. “Beyond this, an earlier wine bottle carrying a picture of Hitler - or at least a Nazi emblem - had been banned as kitsch.” Indeed. [thisislondon.co.uk]

Let’s get critical
Critical Wine, a new movement that “aims to raise awareness of the potential ills of globalization,” will hold an event April 3-4 in Verona, just after VinItaly. Wolfgang Weber writes “participating wine producers work with indigenous grape varieties, practice organic or sustainable viticulture, and exhibit some sense of their particular territorio.” The marketing of resistance? [Wine & Spirits, no link available]

Cuvee chez soi
Home wine making is on the rise. [BusinessWeek]

Armagnac fights cancer the scientific journal Thrombosis Research reports. No word on the effects of cognac. Or E&J Brandy. [via decanter.com]

Legendary investor Warren Buffett has his own elixir, and it’s not red wine: “The good news: At 76, I feel terrific and, according to all measurable indicators, am in excellent health,” Buffett said. “It’s amazing what Cherry Coke and hamburgers will do for a fellow.” [AP]