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Chateau Lafite, thanks to a lucky 8, takes off in China

by Staff Writers
Paris (AFP) Dec 26, 2010
When Chateau Lafite chief executive Christophe Salin set a modest price for the 2008 vintage in April 2009, the financial world was melting down.

Today, a robust market led by China and a lucky "8" have pushed up prices on the grand cru by 590 percent.

It was a smart move by Lafite to emboss the Chinese character for "8" on its 2008 bottles, said George Tong, a prominent Hong Kong businessman and wine collector. That fueled a gold rush for fine wine investors.

"The pronunciation of 8' in Chinese rhymes with that of the word fortune'," explained Tong.

"The Chinese are superstitious and believe that having an 8' engraved on the bottle will bring fortune and make a nice gift."

Lafite is the rock-star of fine wine in China, the fastest growing wine market, and the 2008 packaging affirms China's status.

"I thought it would be a nice way to say hello', and thank you' to the Chinese people," said Salin of his packaging initiative.

The 2008 vintage, sold by the chateau as a futures commodity in 2009 and shipping this February, is an unlikely blockbuster.

Released when Bordeaux's clients were hamstrung by frozen credit lines and collapsing sales, it received good but not outstanding scores from critics and was sold nearly 50 percent cheaper than the weaker 2007 vintage.

Since then the fine wine market has begun to rebound and the stellar, exorbitantly priced 2009 vintage has overshadowed the 2008.

In fact, the surge came quite unexpectedly last October at Sotheby's Hong Kong auction of 2,000 bottles of Lafite direct from the chateau's cellars.

The headline sale was a bottle of 1869 Lafite, estimated to be worth 8,000 dollars a bottle, but which sold for 233,972 dollars, making it the most expensive bottle of wine on the planet.

"It was surreal," said Salin, who was already in shock from the second sale of the night.

The 2008 vintage, estimated to be worth 666 dollars a bottle, sold for 2,860 dollars per bottle.

Word had leaked out about the Chinese-friendly packaging and speculation heated the market.

"We must have sold 600 cases of Lafite in the 10 days after the auction with a 10-15 percent uptick in the prices" across the board since the auction, said Gary Boom, managing director of wine merchant Bordeaux Index. They were all vintages of Lafite.

"The auction has had an interesting effect on the market," agreed Nick Pegna, managing director of Berry Bros & Rudd in Hong Kong.

"There's been a raft of further speculation on the market."

Another big winner has been Chateau Mouton Rothschild.

Prices on the Mouton 2008 vintage rose 60 percent in the weeks following the Lafite auction results, based on a rumour that the Baroness de Rothschild had selected a Chinese artist to design its label.

On the Monday that the label by Beijing-artist Xu Lei was revealed, Bordeaux Index sold its entire stock of 2008 Mouton.

"As a Chinese, I am very proud because someone in my country is designing the label for one of the best wines in the world," said George Tong, echoing the response of other Asian connoisseurs.

"I am absolutely delighted about the success of my cousins at Lafite, ours and that of all the Bordeaux grands crus in China," said Baroness de Rothschild, who personally selects the artist and label each year.

The Baroness nevertheless cautioned about the dangers of exaggerated prices.

To date, the 2008 Mouton has gained nearly 380 percent in value since its release on futures in April 2009, according to Joe Marchant, co-head of Bordeaux Index's Investment Group.

Demand is likely to remain high with the addition of American wine lovers.

"I expect there will be quite a bit of interest for these wines," said Chris Adams, chief executive at Manhattan retailer Sherry Lehmann, who is resisting the call of the yuan, the Chinese currency.

"Our friends at Mouton and Lafite give us sizeable allocations, and our customers are grateful for the access to these wines.

"I am far more interested in cultivating my market than I am in selling pallets of these wines to unknown brokers in other parts of the world."

Overall, the outlook is positive, with demand for Lafite and Mouton masking a wider trend encompassing other Bordeaux brands.

"There's a huge interest in the 2008. It's perceived as cheap," explained Marchant in London, noting exceptionally strong demand in the last quarter as other chateaux "punch above their weight."

In Hong Kong, Pegna also expressed confidence in Chinese demand for the Bordeaux 2008.




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Irrigation pump helps rural Indian farmers
New Delhi (UPI) Dec 23, 2010
For rural farmers in India, an irrigation pump means no longer having to depend on unreliable monsoon showers to sustain livelihoods. But typical diesel-generated irrigation pumps, costing at least $880, are not affordable for India's subsistence farmers who till less than 5 acres. International Development Enterprises India, a New Delhi-based non-profit organization, offers a lo ... read more

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