Saturday October 19 2013

The shift in globaleconomic powertowards Asia isintroducing newtastes into the finewine market butbordeaux remainsdominant, saysPeggy Hollinger

Made in LebanonChâteaux draw fromhistoric rootsVineyards Page 3

Jancis RobinsonClassic vintagesto drink nowFine wines Page 4

Next generationThe wave of new barsaimed at the youngMerchants Page 2

interest from east Asia. Between 2009and mid-2011, bordeaux prices surgedsome 80 per cent, as buyers in Chinaand beyond fought to own the bestvintages from the top châteaux. Eversince, burgundies and champagneshave drawn a growing number of old-world investors.

Since Asian interest began to slowfrom 2011, sufficient demand hasremained for these wines to help themsignificantly outperform bordeaux,according to Liv-ex, the London-basedexchange for investment-grade wine.

“Investing in the wine market isbecoming less about bordeaux, as peo-ple thought it was becoming tooexpensive,” says Justin Gibbs, co-founder of Liv-ex. “People are rotatingtheir focus.”

Cult wines such as California’sScreaming Eagle and Italy’s superTuscans have done well, helped notjust by their quality but also by theirsmall output, which makes them moreattractive to some investors. Therehas even been some noise about cer-tain wines from Lebanon or Israel.

But it will be decades before thesenewcomers can replicate the consist-ency of the fine French wines, saysMiles Davis, a partner of Wine AssetManagers, an investment fund.

Continued on page 2Retaining their cachet: many see little to challenge fine French wines for some decades yet Getty

For most people, austerity hasmeant higher taxes, scarcerpublic services and erodingliving standards. For inves-tors in wine, however, the

pressure on governments to showgreater fiscal probity has brought newopportunities as some of the world’smost intriguing wine cellars haveopened up over the past year.

In January, the French city of Dijonsold off 3,500 bottles of prized burgun-dies – roughly half its stock – to fundmunicipal services.

In March, the UK government soldfrom its vast fine wine collection forthe first time, putting 54 bottles of thebest up for sale, including a 1961 Châ-teau Latour, to raise £74,000.

The French presidency put 1,200bottles of its finest vintages on theblock at the end of May. Comprisingone-tenth of the Elysée palace’s cellar,the auction raised close to $1m; themost expensive bottle, a 1990 ChâteauPetrus, went for €7,625.

All three auctions raised far morethan expected. These were rare oppor-tunities in what recently has been alacklustre investment climate.

The bidding also reflected investors’growing appetite for alternatives tothe traditional bordeaux, whose priceshad been driven to heady levels byspectacular harvests and a surge of

Old certainties are under threat

Buying^Investing inWineF I N E W I N E S T O B U Y • C L A S S I C V I N T A G E S • V I N E Y A R D S • M E R C H A N T S

2 ★ FINANCIAL TIMES SATURDAY OCTOBER 19 2013

Buying&Investing inWine

fruity and appealing, but of nogreat complexity”.

While the Parisian stream ofwine has thinned to a trickle,Viennese production is a rela-tive torrent.

Just like Paris, the Austriancapital’s wine tradition datesback as far as the Romans.Unlike its French counterpart,Vienna still has many vines –612 hectares of them growingwithin its city limits. Theselargely cling to hillsides in thesuburban Vienna woods, thelow range at the far easternend of the Alpine chain.

Some Viennese wines areactually very good. Wineriessuch as Wieninger produce aconsiderable volume of inter-esting whites, including delib-erately old-fashioned fieldblends and novelties (for Aus-tria) such as oaked Chardon-nay, which are available tobuy in the UK. Not necessarilystellar by Austria’s generallyexcellent standards, these arenonetheless serious wines.

While some wines have long

north of Paris were particu-larly prized for their south-fac-ing suntrap slopes. The nowdown-at-heel Goutte d’Or quar-ter near Montmartre took itsname from the “golden drops”of the white wine once madethere.

What killed this thrivingindustry was better transport.When full, heady bordeauxbrought in by train becameavailable at good prices, thethin northern tipple thatarrived by cart lost some of itslustre, while faster public tran-sit made the hillsides newlyattractive for Paris workers’housing.

Bar some private gardenstretches of vines, the 1,700bottles produced annually byClos Montmartre are all thatremains of this once greattrade. Sheltered from cold by ahigh wall (“clos” refers to aprotected vineyard enclosure)its wines are pretty good,given local pollution levels.

Master of wine Tim Atkinhas described them as “light,

If you imagine the suburbsof any great city, you prob-ably think of business

parks, motorways and residen-tial sprawl, not vineyards.

City winemaking is nonethe-less surprisingly common. Itcan be found in areas rangingfrom minute patches of Gamayvines in the backstreets ofMontmartre in Paris to broadacres hidden among the man-sions of Bel Air in Los Angeles.

The urban wines that thesesites produce are of fascinatingcuriosity to wine lovers,revealing not just the ability ofvines to thrive in difficultcircumstances but also howthe trade has shifted its bound-aries and clientele over thecenturies.

Take Clos Montmartre. Nowa pocket-sized parcel of vinesmaking wines for charity andthe local town hall, the Frenchcapital’s last vineyard is a rem-nant of a once sizeable Parisbasin industry dating back toRoman times. In medieval andearly modern France, the hills

The wine is a garnet colour,with an almighty, rich nose.It is a Ramisco 1992 fromthe tiny Colares region westof Lisbon, Portugal, and it

has made its way into a glass inCrouch End, north London, at the Bot-tle Apostle, one of a new breed of wineshops and bars in the capital aimedsquarely at young wine enthusiasts.

A 30ml, £2.95 taster of this punchywine is dispensed from one of twoEnomatic wine-dispensing machinesat the shop and, at £49 a bottle, it isexpensive enough to warrant tryingbefore buying.

That is not the only virtue: the tast-ing opportunities are also a way tonotch up greater knowledge of differ-ent wine styles.

Indeed, when the first Bottle Apos-tle opened in Hackney, east London,in 2009, its self-stated mission was tocreate “a wine shop [that] could cateras much to the wine novice as it doesto the seasoned tippler”.

Informality is essential to this newstyle of wine buying – the antithesisof the quiet and haughty staff of thetraditional wine shop. Across London,but particularly in the east, the trendis finding favour.

Muriel Chatel opened her shop Bor-ough Wines, also in Hackney, in 2010,after a decade selling wine at her stallin London’s Borough Market.

Ms Chatel, who grew up amid viti-culture in Bergerac, France, says:“I’ve been in the wine trade for 10years and it has changed so much.

“People are travelling and gettinginterested in wine in Europe. Whenthey come back, it used to be the caseyou had to go to specialised places [tolearn more], but that’s not where thisyoung crowd wants to hang out; wineselection in pubs is really awful, too.’

The shop is accordingly relaxed andfriendly, lined with scuffed wooden

floorboards and pinned with commu-nity notices by the door. But key toits success – it was quickly followedby branches in Stoke Newington andDeal, Kent, and a restaurant-shop,L'Entrepôt, in Hackney Downs – arethe stainless steel vat and refrigeratedbarrels that stand in the corner.

Every month it holds a differentwine, dispensed into refillable, retroglass bottles with rubber-seal stoppers(made in Italy for olive oil, ratherthan wine). The customer first buysthe bottle for £2.50, and each subse-quent refill is £5. Around 300 litres getsold every week this way at each ofthe branches.

Ms Chatel says the response hasbeen “quite incredible . . . the refill

and they’re well informed. People areasking more questions, they’re inter-ested in organic wines – the wholeexplosion of food and wine is reflectedin the customer.”

Michael and Charlotte Sager-Wildetook an even bigger bet on this curi-ous consumer when they opened theirwine bar, Sager & Wilde, earlier thisyear.

By locating in an affordable part ofShoreditch, in London’s East End,keeping the bar menu to good cheeseand charcuterie, and cutting outluxuries such as drinks napkins, theycould offer some unusual, top-endwines by the glass.

Some nudge beyond the £10 mark,“higher than some Mayfair places”, as

Modern breed of bar targets youngDown-to-earth approach sets out to cater as much to the novice as the seasoned tippler, writes Natalie Whittle

City vineyards preservehistory and way of lifeTucked away in centres and suburbs, producers fightsprawl of urban expansion, writes Feargus O’Sullivan

Green space: Clos Montmartreon the Rue Saint Vincent EPA

really appealed to consumers, it’s themost important part of our business.Most of the time, especially during theweek, consumers want a pleasant,easy drinking house wine. How we doit is [to ensure] all the money is spenton wine and not on packaging.”

Ms Chatel develops relationshipswith emerging winemakers, ratherthan big domaines, and buys surpluswine that still delivers on quality.

A recent Portuguese red certainlyhad a delicious balance unthinkablein a supermarket wine of the sameprice.

Corinna Pyke, Borough Wines’ co-director, says: “Part of our success isthat we’re not a stuffy intimidatingwine shop. Our staff are quite young,

‘It is quite anindulgence, forexample, to owna chunk ofexpensive urbanproperty anddevote it togrowing fruit’

“I don’t think any profes-sional investor would lookat these,” he says. “Youhave to have a track recordand back library. You don’tknow whether any wine isbrilliant or not for 20 or 30years. It is a risky policy.”

Peter Shakeshaft, chiefexecutive of Vin-X, a bro-ker, says investors shouldbeware of anyone proposingwines from unusual places.

“If someone is going totalk about something com-pletely different, I would gofor a second or third opin-ion,” he says.

However, no investor canescape the inevitability ofbordeaux. The good news isthat after prices for the bignames hit historical highsin 2011, some experts sug-gest value may be creepingback.

Counterintuitively, per-haps, poor vintages in 2011and 2012, and what prom-ises to be a disappointingharvest this year, may alsohelp drive up prices.

“A smaller supply shouldmean prices have a chanceof pushing forward,” saysMr Gibbs. This could rekin-dle interest in stock fromother older vintages thathave been overshadowed bythe bordeaux bubble.

That is positive for thewine market as a whole.“Ninety-five per cent of thetrade is still in bordeaux,”says Mr Gibbs.

“Other regions may havecaught the eyes of inves-tors, but the market doesn’tgo up without bordeauxgoing up.”

Peter Meltzer, author ofKeys to the Cellar: Strategiesand Secrets of Wine Collect-ing, says every investmentportfolio has to be domi-nated by the traditional bor-deaux.

“Other wines, howevergood they may be in theglass, don’t tend to appreci-ate at the same rate,” hesays.

The reasons are simple:bordeaux is still the mostliquid of investments; thebest vintages have provedtheir value for longer-terminvestors; and when thetime comes to realise a port-folio, buyers are easily foundfor well-known brands.

There is a sense, though,that the world of wineinvesting is changing. Thedecision by Robert Parker,the world-renowned criticwhose judgment can makeor break a vintage, to sell asubstantial stake in indus-try bible The Wine Advo-cate to Singapore-basedinvestors suggests the oldcertainties no longer apply.

Asian investors arebecoming more knowledge-able about the market andtheir tastes – and money –may bring new perspectivesto the fore.

“Asian buyers are begin-ning to ask the right ques-tions. They are not justbuying on a name,” saysMatthew Tipping of the finewine team at Berry Bros &Rudd, the wine merchant.

Yet for the foreseeablefuture, bordeaux will domi-nate.

Mr Meltzer, with decadesof auction watching behindhim, says it is “still the sta-tus quo” that will offer thebest returns.

“The others may be greatto drink, but they are not ascollectable.”

Continued from page 1

Old certaintiesare under threat

Mr Sager-Wilde points out, but he isclear that the wine is worth it: “Whatwe’re pouring now is hard to get.”

Last year, the couple ran a selloutpop-up bar and know that customers,even in their 20s and 30s, are preparedto pay for something special.

Sager & Wilde has 32 wines by theglass and one or two change everyday. You might get a £16 glass ofSilex, Didier Dagueneau, or an“incredible value” Rioja 1997 for £6.50– or, for adventure, a Gamay fromSerbia.

You can buy wine by the bottle totake away at Sager & Wilde and thisis another increasingly popularfeature at contemporary, wine-con-scious restaurants.

Over a (pretty decent) meal atL'Entrepôt you can pick from morethan half a dozen wines by the glass,and take home a bottle of the one youlike best with a 10 per cent discount.

At Sweet Thursday, a bright, buzzypizzeria-wine shop in De Beauvoirtown, north London, co-owner Beth-any Chellingworth runs the wine sideof the business, which gives a 10 percent discount to bottles bought after ameal.

She admits that the wine retail is“not as profitable as the restaurant,but it’s a nice asset to have; all ourwines are on display, and our winetasting events are really popular”.

Ms Chellingworth buys “things weenjoyed – the target was people ourage and background . . . there’s noNew Zealand Sauvignon Blanc or Ital-ian Pinot Grigio, we wanted to chal-lenge people a little bit. [You have to]build up trust and rapport.”

As Ms Pyke of Borough Wines says,her customers “don’t feel stupid orpatronised”. They enjoy “a relaxedand welcoming environment”, whicheven has about it a touch of “humourand irreverence”.

Rolling out the barrel: Borough Wines in London takes the informal approach to attracting customers Rosie Hallam

been made within city walls,other wine regions havebecome urban only recentlythanks to the insidious creepof metropolitan sprawl.

Vine growers living inFrance’s Pessac area a few cen-turies ago would probablyhave thought their villagebecoming a suburb of the cityof Bordeaux was as unlikely asmen landing on the moon.

Nonetheless, houses are nowedging in between its plantingsof Sémillon and SauvignonBlanc. This process is steadilytransforming the home ofsome of Bordeaux’s best whitesinto yet another dull suburb ofplaster-covered concrete andfaux-rustic shutters.

In particular, houses havenow moved to abut the vine-yards of Château Haut Brion,one of the five Bordeaux châ-

teaux listed as first growths in1855. The astronomical pricesthe château’s reds command,however, should keep them offthe estate’s actual terroir indef-initely, with further develop-ment held in check not by lackof demand for new homes, butbecause the estate’s interna-tional renown makes it sacredground.

Beyond the medieval surviv-als and the rural vineyardsswamped by sprawl, one finalcategory of city wine producerremains: the toy vineyard.While they will probably notwelcome the designation,wines made recently in Lon-don fall into this category.

These include a new enter-prise called London Cru thatmakes wine from importedFrench grapes in Earl’s Court,west London. Enfield’s seven-acre Forty Hall vineyard in thenorth of the capital, mean-while, will be producing itsfirst organic vintage this year.

Both are intriguing projectsno doubt, although theyremain too small to be of greatsignificance.

Yet while toy vineyards pro-duce little wine, they can beunusually potent symbols oftheir owners’ wealth.

It is quite an indulgence, forexample, to own a chunk ofexpensive urban property anddevote it to growing fruit.

Overall, however, urbanwinemaking remains a charm-ing curiosity. Long may it con-tinue, while the more seriousbusiness of life goes on else-where.

Borzou DaragahiNorth Africa and Middle Eastcorrespondent

Abigail Fielding-SmithBeirut correspondent

Peggy HollingerLeader writer

Feargus O’SullivanFreelance writer and journalist

Jancis RobinsonWine expert and author

Rachel SandersonMilan correspondent

Lucy Warwick-ChingOnline Money editor

Natalie WhittleAssociate editor, FT WeekendMagazine

Hugo GreenhalghCommissioning editorPhilip Parrish, sub-editorAndy Mears, picture editorSteven Bird, designerRachel Savage, research

For advertising details,contact: Mark Howarth,0207 873 4885,mark.howarth@ft.com, or yourusual FT representative.All FT Reports are available onFT.com at ft.com/reports

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On FT.com

HealthWhat are thebenefits ofdrinking wine?Andrew Jack on thepros and cons ofthe odd glass of red

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FINANCIAL TIMES SATURDAY OCTOBER 19 2013 ★ 3

On a balmy midsum-mer evening thisyear, the Tuscan

wine town of Montalcino,famous for its Brunello redwine, held a fundraiser forthe local school. Under theslogan “Brunello for Mon-talcino”, the event was asstriking for the interna-tional nature of the gather-ing as for its setting in a14th-century hilltop fortresssurrounded by vineyards.

Among the several hun-dred guests dining onFiorentina Tuscan steaksand Brunello red there werelocal producers and also USbankers and lawyers, board-level executives and Euro-pean and Chinese businessowners, many of whomwere not tourists but resi-dents.

At a time of deep reces-sion in Italy, Montalcino isa place where the fableddraws of the bel paese –wine, landscape and qualityof life – are proving a pullfor foreign investors. More-over, given a jump in inter-national demand over thepast five years for Brunelloand its younger sister wine,Rosso di Montalcino, theycan also get a return ontheir investment.

André Esteves, owner ofthe Brazilian investmentbank BTG Pactual, is thelatest international arrivalto the Montalcino estatescene. He bought theArgiano estate with friendsthis year for an estimated€50m. A working vineyardsince the 1500s, it has 48haof vines and produces110,000 bottles a year ofBrunello di Montalcino.

Mr Esteves joins RichardParsons, former chief execu-tive of media group TimeWarner, and the family ofSwiss pharmaceuticalsbaron Ernesto Bertarelli,who have acquired wine-making estates in the Mon-talcino area. Louis Camill-eri, chairman of Philip Mor-ris International, thetobacco group, is anotherrecent arrival.

Giorgio Gabelli, who ismanaging Mr Esteves’investment in Montalcino,says Argiano made €3m inrevenues in 2012. Most ofthis came from wine, whilesome 20 per cent came from

its hospitality business. Ithas a cellar that dates from1580, one of the oldest inthe area.

“What Mr Esteves boughtwas a brand of great pres-tige and a piece of historyof Brunello,” Mr Gabellisays. “He is a great lover ofwine. Brunello is renownedthe world over. It is like abillionaire buying a 120myacht, except Mr Estevesbought a wine estate.”

Fabrizio Bindocci, presi-dent of the consortium ofBrunello di Montalcino pro-ducers and managing direc-tor of the Il Poggione win-ery, says foreign interest inMontalcino has risen in thepast few years, not justbecause it is beautiful butalso because the wines areproving to have a signifi-cant return on investment.

Production of Montalcinowines in 2012 exceeded14.1m bottles, of which 9.2mwere Brunello di Montal-cino. Revenues were €167m,up 2.5 per cent comparedwith 2011. The region hasseen sharp growth in directsales as the number of tour-ists to the region rises. In2012, direct sales wereworth 18 per cent of totalrevenues. Revenues fromwine tourism rose 8 percent from the year before.

Mr Bindocci is hopeful ofanother jump in sales thisyear. Fresh from the har-vest of this year’s grapes,the vendemmia of 2013 maybe on a par with Brunello’s

great year of 1979, he says,thanks to the effect of acool spring and an excep-tionally warm September.

Recent arrivals sayanother attraction for out-side investors is the open-ness of the traditional wine-producing community.Mark Barnett, founder ofLondon restaurant Mao Tai,has a villa in the hills sur-rounding Montalcino wherehe and his wife spend sev-eral days each month. Hesays that compared with“Chiantishire”, there is aneasy flow of learning aboutwinemaking, from the long-time residents to the new-comers.

“People are very welltravelled, very open andwilling to share their pas-sion for wine. That makes adifference,” he says.

Francesco Ripaccioli,owner of the Canalicchio diSopra winery, agrees. “Thenew investors would nothave been able to find thesuccess they have withoutthe back-up from the tradi-tional producers,” he says.He notes that the relation-ship can also be mutuallybeneficial.

Until five years ago, thewinemaking region ofMontalcino had neverproduced more than10m bottles a year butit has seen a surge inexports, particularlyto the US. Exportsnow account for 65per cent of revenues.

More than a quarter ofoverall sales go to the US,while southeast Asia, east-ern Europe and Brazil aregrowing markets.

The area has becomequite international in char-acter. The Italian-AmericanMariani family, one of thebiggest Italian wine distrib-utors in the US, wereamong the first newcomers.They bought their CastelloBanfi estate in the early1980s and cleared brushlandto create 1,000ha of vine-yards.

Massimo Ferragamo, oneof the heirs to the SalvatoreFerragamo shoemaker-to-the-stars dynasty, boughthis Montalcino estate, Cas-tiglion del Bosco, a decadeago. It has 70ha of vine-yards, all licensed to pro-duce Brunello. It also has agolf course, hiking trailsand luxury accommodationin the main estate house orin villas on the estategrounds.

Mr Ferragamo spendsmost of his time in the USas chairman of the shoe-maker’s operations therebut was driven to invest inMontalcino by an ambition“to make a great wine”,

says Simone Pallesi, chiefexecutive of Castigliondel Bosco.

The estate’s vineyardsunusually are located350m above sea level andare south-facing, produc-ing a hot, dry microcli-mate but with limitedhumidity because of thealtitude. Their top-of-the-range red isCampo del DragoDOCG.

Mr Pallesi saysthe increasingattraction of Mon-talcino to interna-tional visitors pro-vides “hugepotential for all ofus at Montalcino”.

“People don’tjust come to drinkBrunello anymore,” he adds.“More and morethey want to expe-rience the reasonwhy Brunello iswhat it is and theconnection withthe terroir andthe end result.”

Investors lap up MontalcinoOverseas owners of vineyards reap rewards, writes Rachel Sanderson

As co-owner Ramzi Ghosncalmly inspects the vatsfermenting the Cinsaultand Grenache grapes thatgive Massaya wine its dis-

tinctive nose, you would never guessthat Hizbollah militants are clashingwith gunmen just half an hour downthe road. Perhaps understandably, MrGhosn is keener to talk matters of thepalate, rather than dwell on theturbulent politics of the Middle East.

“We’re moving away from easy-go-ing wine,” he says. “Finesse is thename of the game.”

Until recently, Lebanese wine tomost people simply meant the Bekaavalley’s Château Musar, whose ownerSerge Hochar beat a path to interna-tional markets at the height of thecountry’s civil war. Musar’s quirkyreds, as unpredictable and complex asLebanon itself, remain the industry’sbest-known export.

Since the civil war ended in 1990,the number of producers hasincreased from a handful to nearly 40.

In spite of still-turbulent politics,ambitious post-Musar players such asthe Ghosn brothers are determined toput out wines that are taken seri-ously, whilst staying true to the ter-roir.

With an output of only 8m bottles ayear – and the cost of producing andexporting them from the Middle East– Lebanon’s wine does not come notcheap. Entry level bottles retail foraround £9 in the UK.

Like most producers, the majorityof Massaya’s vines are in the Bekaavalley, a stony, mountain-flanked2,000 sq km plateau close to theSyrian border. Its sun-baked summersand cool evenings make it ideal forviticulture.

A short drive north from Massaya,the magnificent ruins of a Romantemple to Bacchus at Baalbek offera hint of the deep historical rootsof Lebanon’s wine culture. The

Bekaa valleyfinds its feetLebanese production draws on roots set deepin history, writes Abigail Fielding-Smith

Phoenicians, whose Mediterraneantrading empire flourished from theirbases in Lebanon’s coastal cities from1550BC to 300BC, have a reasonableclaim to be the first wine exporters.

As the scent of lavender waftsacross the air, the view from the Mas-saya winery is mostly unspoilt by thetrappings of subsequent eras. Vinesseem to stretch all the way across thevalley floor to the snowy higherreaches of the mountains.

Distributed by Thorman Hunt in theUK, the products of the 15-year oldvineyard turn over more than $2m ayear. It is investing in a new winerynear the ski resort of Faqra.

As Mr Ghosn explains over a 2008red from their popular silver, mid-level selection, the vineyard’srelatively short history has beeneventful.

At the end of the civil war, MrGhosn and his brother were living inParis. Determined to help Lebanonrebuild, they started making arak, alocal aniseed-flavoured spirit, at thefamily’s holiday estate in the Bekaavalley, from which they had beenforced to flee one night in 1975.

Plans evolved and the brothersbecame interested in developing awinery. In 1998, they signed up twoFrench partners: the Bruniers of Châ-teauneuf-du-Pape and DominiqueHebrard of Bordeaux, who providedinvestment as well as advice onproducing and marketing the wines.

Even with the support of theirFrench partners, it took them 10 yearsto become profitable. The businesssuffered in the face of bombs rainingdown on the valley during the 2006war between Hizbollah and Israel.

With tensions rising again inLebanon because of the civil war inSyria, Mr Ghosn has had to draw upcontingency plans to get their bottlesto port in Beirut, the capital, if roadsare cut off by demonstrations.

Set against these problems,

Mr Ghosn says, are thealmost perfect wine-grow-ing conditions of theregion.

“We have sunshine,” hesays, gesturing at thelight dappling throughthe leaves. “You can belazy in Lebanon andproduce good, decentwine.”

Aseries of high-profilefraud cases involvingwine investment in

the UK has led to thelaunch of a new self-regula-tory body. Not everyone isconvinced of its merits.

Established to promotetransparency among mem-ber firms and to stamp outfraudulent activity, theWine Investment Associa-tion (WIA) was launched inFebruary.

It followed revelationsthat a growing number offraudsters were setting upoffices in the City of Lon-don to cold-call potentialinvestors.

Wine investment compa-nies have been invited tosign up to a new code ofconduct and to agree totougher controls, as well asa stringent complaints pro-cedure. Mazars, theaccountancy and audit firm,is working with the WIA tocarry out compliance auditsof member firms. Membersthat sign up to the code willbe entitled to display anindustry kitemark.

“After 30 years of inactionit was essential that regula-tion was introduced intowhat is a sector of growingimportance,” says HugoRose, WIA chairman.

“For the first time theindustry has a body toestablish a code of practice,regulate operators, exposerogue traders and ultimatelyincrease investor confidencein wine as an asset class.”

The introduction of thecode coincided with a crack-down by the Financial Con-duct Authority (FCA), theCity watchdog, on the pro-motion of unregulatedinvestment funds – includ-ing investment in wine – tothe public.

The FCA has banned

financial advisers from rec-ommending risky, unusualor complex funds to “ordi-nary” (less wealthy or lesssophisticated) investors.

The introduction of theWIA has been broadly wel-comed by the financial serv-ices industry.

“Wine is a very small,illiquid and unregulatedmarket,” says Yogi Dewan,chief executive and found-ing partner of HassiumAsset Management, awealth manager.

“Sadly, as prices haveincreased, so has the incli-nation for forgeries,” headds.

“As wine merchantsspring up, so does thenumber of funds, scams andinvestment schemes thatpiggyback on uninformedinvestor interest.”

He cautions: “It is a startbut, as an investor, it ishard to see it really makinga difference.”

Geordie Clarke, editor ofdigital wine magazine ByThe Bottle, says to be effec-tive the WIA needs over-whelming industry support.

“Unfortunately, it hasbeen unable to stir up a rea-sonable amount of interestin the market,” he says. “Sofar the WIA has just twofull member firms and twomore are pending subject tosuccessful audits.”

Others warn that becausethe WIA is a “self-regula-tory body”, this gives littlereassurance for investors.

“It falls a long way shortof regulation by the FCA,which would mean inves-tors could fall back on thefinancial services compen-sation scheme if necessary,”says Patrick Connolly, acertified financial plannerat Chase de Vere, the finan-cial advisers.

Regulator failsto enthuseUK body to curb fraud is short onrecruits, says LucyWarwick-Ching

In terms of financial investment, ChâteauMusar (left) is the one to lay down.Since Michael Broadbent named it the

“find of the fair” at Bristol Wine Fair in1979, Serge Hochar’s bold, originalwines have captured the publicimagination.

This year Bonhams sold cases ofChateau Musar 1985 and 1986 fornearly £500 and, according toBloomberg, its 1959 vintage sells fornearly $1,800 a bottle.

Mr Hochar’s personal favourites frommore recent years include 1991 and1988. These wines are “not classical”, hesays, but have “something distinctive”about them. “I hate perfection,” heconfesses.

Wine writer Michael Karam says whileno one else is producing wines likely toincrease in value, the best of the majorwineries will be “fabulous” to drink in 10-15years. Tips include a case of the Comte deM from Château Kefraya, the Gold Reservefrom Massaya or the El from Ixir.

Investment

What to buy

Tasting notes

Premium forscarcity

Bordeaux may dominate the wineinvestment market but Wine Searcherfigures published this summer showed thepriciest come from Burgundy, followed byGermany’s Mosel. The prices – bottles ofBurgundy’s Domaine de la Romanée-Contihave sold for over £34,000 – reflect notjust quality, but scarcity value from smallestate sizes.

The inspector’s call:Ramzi Ghosn tests hisvineyard’s produce

Buying&Investing inWine

4 ★ FINANCIAL TIMES SATURDAY OCTOBER 19 2013

Buying&Investing inWine

Until about 60 years ago,Algeria exported morewine than any othercountry – even France. Itshistory of winemaking

dates back to the first millennium BC,when Phoenician and Carthaginiantraders shipped barrels of wine acrossthe Mediterranean.

So it was with some excitement thatthe young medical student RamziBendella first tried the produit of hisown country a decade ago. But, as herecalls, “it was very bad wine”. Alge-ria’s 1990s civil war had crushed anindustry that had been propped up bythe French during its colonisation ofthe north African country.

Peace has been good for Algeria’swines and the industry has improveddramatically, amid what some mightcall a renaissance of wines of franco-phone north Africa, including Tunisiaand Morocco.

“The glass, the corks – all of thathas improved,” says Victoria Meghdir,vice-president of Meghdir & Sons, awine importer in the US state of NewJersey. “But it is just a matter ofgetting the mainstream population toappreciate it. A very small percentageof the population knows or has experi-enced these wines.”

While the sunlight, moisture andtemperature in wine-producing areasof the Maghreb region are ideal, northAfrica’s social climate is harsher. TheIslamic faith of most of the populationforbids alcohol.

“The quality has improved since com-panies such as [French drinks group]Castel invested and Bordeaux vigneronsgave of their expertise,” says DouglasWregg, sales and marketing director atLes Caves de Pyrène, a UK-based wineimporter. “But the winemaking haslagged behind probably because thereisn’t a critical local market.”

Algeria produces around 500,000hectolitres of wine a year, Moroccoabout 400,000 and Tunisia 300,000. (Bycomparison, north Africa producedupwards of 25m hectolitres annually60 years ago.)

Algerian wine-growing regions arecentred in the country’s agriculturallyrich northwest, near the second cityof Oran. They include Sidi Bel Abbès,Mascara, Mostaganem and Tlemcen.

Algerian wines are distinctive fortheir low acidity, high percentages ofalcohol and very little oak ageing.They are rich in colour, dominated byClairette and Ugni Blanc grape varie-ties. Visitors to Algeria adore theCuvée Monica produced by the vine-yard owned by the actor Gérard Dep-ardieu. It has a slightly earthy, smokyflavour with hints of cherry.

Tunisian winemaking is concen-trated among some 20 vineyards onthe Cap Bon peninsula to the east ofTunis, the capital.

Many in north Africa’s wine indus-try say sales have grown. “There is anincrease of 5 per cent compared withlast year,” says Samir Dardouri, chiefof marketing at Les Vignerons deCarthage, a collective of Tunisianwine growers revitalised about a dec-ade ago by German investment.Around 70 per cent of its production isexported, primarily to France but alsoas far afield as Brazil and China.

Popular Tunisian wines includeSelian, produced by Domaine Neferis,the spicier Carignan Calatrasi and adry blanc premier cru. Château Mor-nag is a fragrant and smooth blend ofCarignan, Syrah and Merlot grapes.

The biggest impediments to expand-ing and improving the wine industriesof north Africa are political and cul-tural. Mr Bendella, now a urologist inOran, still hides his consumption ofwine from his parents.

Maghreb fortunes riseNorth Africa rediscovers wine heritage, writes Borzou Daragahi

Rich pickings: a vineyard inHad Brachoua, Morocco

Getty

The classics intheir prime

Jancis RobinsonVintages fit to drink now

One of the pleasures ofbeing on the Londontasting circuit isfeedback from FT

readers over the spittoon. I haverecently been reminded it is sometime since I wrote about whichvintages of classic wines are bestto drink now.

Given that red bordeauxoccupies such a high proportionof FT readers’ cellar space, I willbegin by considering vintages forthis investment favourite. Let uspass lightly over the overpriced2012s and 2011s to alight on 2010s.These are looking better andbetter, but even the lesserexamples are so stuffed full ofeverything, including tannins,that it would be a shame to openthem now. Some of the lesser2009s with their voluptuous fruit,on the other hand, are already apleasure to drink.

The 2008s tend not to be ascharming and will probablybenefit from prolonged ageing justas much as the 1998s and 1988shave. I know it is not logical toassume the weather follows theGregorian calendar, but there is asimilarity between the three mostrecent vintages ending in 8 andthose ending in 7. Speaking ofwhich, 2007 offers some of the bestdrinking for those who cannotafford to pay for prolonged ageing.This was another vintage thatwas overpriced initially, but atleast these relatively light, fruitywines have matured rapidly.

If I were still choosing wines foran airline, I would make a beelinefor 2007s. Not so the 2006s andespecially 2005s, which stillwarrant keeping for many a year,for different reasons. The 2005sare a bit like the 2010s (bless themfor respecting my divisible-by-five-years-tends-to-be-superior rule);

they are very concentrated andmost are slumbering in a quietlockdown phase. The 2006s aremuch less concentrated, but thebest still need time for the fruitto shine through the structure.

Only when we go back to 2004do we reach a vintage that aclassically trained claret drinkermight consider drinkable. I havealways liked these rather fresh,rigorous wines and am beginningto appreciate their direct appeal.The 2004 bordeaux vintage hasbeen rather obscured by themassive reputations of the vintageseither side of it, which is a pity.

I was not as enthusiastic assome about the 2003s produced inthat heatwave year. Many reachedtheir sugar levels by desiccationrather than phenolic ripening andthe result is wines without areally interesting, complex mid-palate capable of evolving to thesubtle nirvana of red bordeauxperfection. Only a few of thefinest wines, mainly from Pauillacand Saint-Estèphe, will attainnirvana. Some are plagued byburnt or raisined flavours, and Isuggest most are enjoyed now.

The reputations of 2002 and2001, once regarded as a pair oflesser equals, continue to divergewith the years. The 2002s seemlighter and leaner, whereas someof the most rewarding wines todrink now are the 2001s. Althoughthe 2000 vintage was the one that

initially drew the attention, andcan be delicious today, there aresome properties, especially on theright bank, where the 2001 ismore elegant and satisfying.

The 1999s are more, shall wesay, serviceable, but the wine ofthe last two “8” vintages – 1998and the initially very tough 1988– is at last ready to drink. The1997s are generally on the waydown, along with such winesfrom the 1991-94 period as remain,while 1996, 1995 and 1986 canprovide fully mature drinkingnow. The 1990s, 1989s and 1982sare still great at the top level, butmany a lesser wine is fading.

As for red burgundy, there ismore wine-by-wine variation inageing rate and potential thanwith red bordeaux. But if we takea typical Côte de Nuits premiercru red, which is generally a yearor two slower to develop than aCôte de Beaune, I suggest 2010and 2009 are stored away for a fewyears, along with the best 2005s.Some 2002s may be emergingfrom the shell into which somuch red burgundy retreats aftera few years in bottle.

Of vintages to drink now, 2007would be my choice. These winescharm, even if they rarely havethe stuffing for prolonged ageing.The 2008s, which were obduratein extreme youth, are starting toshow the great terroir definitionof which they are capable.

The 2006s, 1999s and especially1996s and 1995s are the vintagesto pick now at exalted appellationlevels, although many will repayfurther patience. Avoid most2004s and drink most 2003s nowwhile the fruit lasts.

See Purple Pages ofJancisRobinson.com for nearly90,000 wine reviews

‘Some of the lesser2009 red bordeaux,with their voluptuousfruit, are already apleasure to drink’

Tasting notes

Pioneer spiritNew World wines may lag behind theOld World’s in prestige but are notnecessarily that new. Frederick theGreat of Prussia, right, drank SouthAfrican wines from Constantia in the1770s, while the oldest Syrah vines arenot in their native France but Australia’sBarossa Valley. Bordeaux,by contrast, was not fully colonisedby the Cabernet Sauvignon that formsthe bulk of its great wines until the19th century.