I'm not above a glass of Trader Joe's Two-Buck Chuck.
But for those of you with disposable income that invites angst over terroir, or wine's origins—particularly for Bordeauxs—no other fine wine topic has quite ignited passion like China's new wealthy. Their sheer purchasing power has transformed the Bordeaux market, perhaps irrevocably, and shows signs of sustainability despite the 2011 price collapse.
"As the demand for these wines becomes great and greater from this new market, naturally the prices will rise," said filmmaker Warwick Ross, whose documentary "Red Obsession" recently debuted in North America at the 2013 Tribeca Film Festival. The film, co-directed by David Roach, is narrated by actor Russell Crowe.
And oh boy, did prices rise.
Bordeaux Bubble Bursts
During the height of the Bordeaux bubble in 2011, prices for highly sought after bottles soared. Cases of recent vintages of top-tier wines such as Château Lafite were going for as much as £15,000, roughly $23,200 USD.
"The Chinese market has really woken up to fine wines," said Joe Marchant, director of Bordeaux Index US. As China's economic rise minted more millionaires, curious wine buyers from Hong Kong and mainland China have been showing up at chateauxs in France's Bordeaux region. "A lot of people had access to really cheap cash," Marchant recalled.
Created in 1997, the Bordeaux Index is a European fine wine merchant with offices in London, Hong Kong, Singapore and more recently in Los Angeles. They manage clients' wine vaults around the world. In 2008, they also launched "The Bordeaux Index," a real-time index that tracks live changes in the prices of roughly 160 of the most liquidly traded Bordeaux wines. The index serves as a proxy of sorts for the wine market.
"We wanted to explore how wine behaves as a commodity, not just a drink that improves over many years," Marchant said.
The Bordeaux Index peaked at 150 in June 2011. Like many market bubbles, the wine bubble burst and prices have since retreated, with cases of Lafite declining in price by as much as 40 percent.
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