Can anyone answer my question please

[phillisc]

Hi all, continuing the rant...very sorry but in a really foul mood this morning...feel like one of those keyboard warriors!!

No names no pack drill Gavin, but...
I know Tim, Dave vino and other wise souls on this forum have said don't pay the overblown current release price...pick it up at auction for a more sensible price...ahh the beauty of those marketers who think they know everything
However, here is the question;
Can anyone please tell me why I can buy the premier Coonawarra Cabernet Sauvignon 1990 vintage for less than the current 2009 release?

The 1990 version is $90. The 2009 version if you were a club member was also $90 (RRP $129.99c) but is now $100+ at the chains and at the winery cellar door.
I contacted aforementioned business who has the 1990 to check cellaring history , condition of said item, and all is first class.

If nothing else, this is what is completely wrong with the Australian wine industry.
Does this mean that the 2009 edition will still only be $90 in 20 years time...proably not but seriously begs the question that it is sometimes much better to buy later than to be sucked in with the buy now or miss out mentaility.

Have a lovely day....ps. I have a dozen of the 1990 vintage...seriously thinking about another 6.

Cheers Craig.

[GraemeG]

I have no answer in particular, except there's plenty of 2009 to sell, and not so much 1990.
If it's any consolation, the phenomonon isn't exclusive to here. It seems good back-vintages of Bordeaux - classics like 1985 and every good vintage since - are cheaper than buying the 2009.
Fashion, hype, stupidity - these are the reasons I guess.
GG

[rens]

Grange is another classic example. Not that I buy the stuff but why would you pay $580 from uncle Dans retail when you can pick up the current 2007 for $394 last sale at Langtons (68% of the retail price (plus postage and buyers premium)?
Tells me someone at Pennies HQ is delusional.

[markg]

The auction price is simply the "publicly endorsed" value of the wine.

The wineries work out what it cost them and add a profit = RRP.

When it comes to auction it has already lost (at a minimum) 40% of its RRP (the same as any second hand good).

Over time, as the wine gains a reputation, either as a great wine or as a crap wine its value changes. If it is VERY lucky it may even reach the current release price, but that's highly unlikely with any current release wines.

Its not the wineries, its the marketplace. It creates a level playing field for thousands of wines based on price and changing taste(s).

[TiggerK]

I think you have to search a little bit more to find the next 6 of 1990 vintage, it is quite rare.

Umm, he said he can get it easily? Helps if you read rather than concentrate on self promotion..... Vaguely generic short answers like that reek of a canned pork product in waiting.....

[mf]

One issue with the question is the implication that older wine is better than new wine (something which may be for true for indiviuals taste in wine or particular wines but not something that is necessarily true of the market).

I thought, as a generalisation, that the market normally reflects that wine actually decreases in value as it gets older (or at least increase in value by less than inflation). This is also probably pepetuated by the point above that as soon as an item becomes second hand that there is an assumed loss in value (appreciate not the case here).

Based on that it should actually be the case that an older vintage wine sells at a lower price than the latest release - I guess, theoretically, you should only buy wine younger if you have a belief it is a wine that does not follow the general market for wine (e.g. there is something special about its level of scarcity, you have some theory that it is undervalued at current price (e.g. an underappreciated region/variety) etc.) or you buy it now just to remove the downside risk of it not being able to be purchased at a later date (which could include you know you won't be bothered scouring auction sites to buy it at a later date) or at that later date you may have to purchase from unknown provenance (again appreciate that is not the case here).

Seems this wine just happens to follow the normal trend (albeit I suspect the wine to which you refer may have had a large price increase which very well turn out to be unwarranted) - as you note the result may be that this wine is still $90 is in 20 years (or more likely it is something more than $90 but not as much more as pure inflation would have implied it should have increased). I assume the 1990 wine was not $90 when released? (query whether its value has even increased with inflation).

In any event you could conclude that the market is stuffed or it just reflects that the market thinks wine decreases in value as it gets older and the winner is the person who likes old wine and can find it with good provenance (or better yet the person who buys young wines that don't follow the market trend and old wines that do). You should be happy if the market makes decisions that you think make no sense as long as you take advantage of it rather than follow it.

[markg]

I would have to respectfully disagree with the comment that a wine should decrease in value as it gets older.

Wine changes in the bottle, one of its endearing characteristics of course. You cannot create bottle age it can only be acquired over time, hence it should actually increase in value to account for the time being properly cellared. But then that is subjective to how a buyer values it in the first place and how well the wine is ageing of course.

[mf]

I would have to respectfully disagree with the comment that a wine should decrease in value as it gets older.

Wine changes in the bottle, one of its endearing characteristics of course. You cannot create bottle age it can only be acquired over time, hence it should actually increase in value to account for the time being properly cellared. But then that is subjective to how a buyer values it in the first place and how well the wine is ageing of course.

I don't think you are respectfully disagreeing with anything (as I don't think we are disagreeing) - I didn't say it "should decrease in value" as it gets older or that every wine decreases in value when it gets older. All I was saying was that the market (the determiner of supply and demand) seems to imply that the price does fall (especially factoring in inflation/real wage increases etc.) on the "average" bottle of wine (so on average the price should fall unless it is an exception). On that basis it does not surprise me that this particular wine is such an example. I am sure you see plenty of exceptions from which you benefit (so good luck to you). I happily buy lots of wine that I cellar on the expectation that they will increase in enjoyment value for me (but does not mean I am confident they will increase in monetary value - although it increases the chances I will buy them if I think there is a chance that they might).

I am just thinking why get upset at this "injustice" in the market when you get to benefit from it. It should also be recognised that buying a wine now rather than the future hedges you against the risk of not being able to get it in the future, having to buy with questionable provenance or the risk it does actually go up in cost. All things to which a value should be attributed. I may be over complicating things but if you are trying to query "market value" then there are multiple factors that should be considered of which these are some (which doesn't necessarily mean the market is "wrong").

[AndrewCowley]

Would help if the wine was named. What is it?

[phillisc]

Thanks Mark and Andrew, the wine was $23-25 when released in 1994. It has a coloured label not dissimilar to Gavin's background colour to the Auswine forum, with gold writing.
It has a an old building on the label with a triple pitched roof line...first made in 1982 by the great John Wade.....we will leave it at that so not to upset the sensitive souls.
I will purchase the 2010 and 2012 releases of this wine to round out the 30 years since the first release and then that's it. The release price will be $120 next year and about $140-160 for the 2012 in 2015. It will not have a 2011 release.

Then I will laugh my head off, because my obsession will end, I will feel so much better, like a smoker who does not miss those cravings, and said company will then be owned by someone else. Plus at these prices I can buy a 6-pack of equally good Coonawarra wine from someone else.

Cheers Craig.
PS. the wine in question has a sister shiraz of the same price, beginning with the freak one off 1955 vintage, and then reintroduced in 1990 and sadly equally overpriced... but back vintages of this wine are even cheaper than the above wine at auction.

[AaronL]

PS. the wine in question has a sister shiraz .

Hmm a sister named Michael....... sounds like a creepy family

[rens]

You wonder what would have been had Treasury Wine Estates not had their way with it. Could it have been like Rockford or the like that still charge $50 for their flagship wines?
hmm

[phillisc]

PS. the wine in question has a sister shiraz .

Hmm a sister named Michael....... sounds like a creepy family

Umm sorry about the slip there, could I have meant sibling and not sister.

[phillisc]

You wonder what would have been had Treasury Wine Estates not had their way with it. Could it have been like Rockford or the like that still charge $50 for their flagship wines?
hmm

Yes Rens, excellent observation.
I remember once hearing that it may have been Grollo Bros. from California ( who I believe have a total crush bigger than the whole of Australia), apologies, may have to check that, but it is a huge single crush nonetheless.....anyway the deal at the time was rumoured to be hundreds of millions of dollars offered for Wynns, and I think Seppelts and Lindeman's, were possibly part of the deal when Southcorp were holding the reins. Sadly they said no.

Things would have been a whole lot different...and have a feeling that one day this will happen.
I 100% agree with your thoughts that a winery like WCE could have wines of equal or higher calibre than they do now...to certainly match the quality of some smaller players.

Cheers Craig.

[marsalla]

I think you might mean Gallo