Red Obsession Page #2

And you respond in a very sensual way.

As soon as you have to use words

to describe your sensation,

you use words in a part of your brain

which is linked to your memory,

to your history, to your

taste, to your education.

In my brain, because it's

my background, it's music.

This is like a voice, a wine.

It's like an instrument

with what we call a 'timbre',

which is different...

A Steinway has not the same...

That's the difference

between a Lafite and a Latour,

between a Guarnerius and a Stradivarius.

My perception is like that.

I hear the wine, I don't smell.

I can tell you about

my first ever Bordeaux

and I'm still getting

memory from it now.

It was when I was a

student, all those years ago.

I'm still getting the pleasure

from that bottle of wine.

It was as though you'd got

a distillation of

something in this glass

which we know came from fruit,

but all the fruit had long since gone.

You were just left with this

ethereal, dreamy experience -

and it was a revelation!

Offering a wine En Primeur,

which basically means

you are offering a wine

which is not yet bottled, not yet ready,

means you are selling

a piece of excitement,

of anticipation, of magic,

and there must be some

hype and hope around this.

So, clearly, it's part of the deal

and that's why Bordeaux is

so famous around the world

because Bordeaux is very good

at creating that excitement.

With the 2009 vintage,

the hype matched the

quality of the wines.

This time around, we've

got an awful lot of hype.

I wonder whether their

wines will actually deliver,

and the proof, of course,

will be in the pudding.

But behind all the excitement

about whether the 2010

will be another 'vintage of the century'

is the commercial reality

that En Primeur is

all about... business.

In the past 10 years,

prices of the top Bordeaux wines

have risen by more than 1,000%.

As the price of these

wines continues to escalate,

the inevitable has happened -

they've become too valuable to drink.

15 years ago, when

I started the company,

I said that at some point in

the future, within 25 years,

half of all the top wines bought

will be bought for investment,

and people laughed at me.

Now, you go and look at

all the traditional

kind of wine companies

and they've all got investment teams.

What are you paying on those?

Close to four grand.

Close to four grand?

Are you having a laugh?

En Primeur is a calculated investment.

You're buying, essentially, the wine

because you think you're

getting it cheaper now

and you're taking a credit risk

and a price risk on the future

but, essentially, an En Primeur purchase

is an investment purchase,

and once you understand that

then you start treating

it slightly differently.

Didn't he say he's got a few million

he's gotta sell today or tomorrow?

He's got a couple million.

It's coming on to the market.

Because those guys have got

a deadline on that stuff,

so he's got 3 million to 5 million,

he's got to sell it.

Wine has outperformed the stock

markets, all the major markets -

the Dow Jones, the FTSE, gold -

all these markets, since 1982.

We were looking for some Margaux,

vintages from the '90s,

those sort of lesser vintages,

as the market might call them.

You want nine and a half?

That's interesting, OK.

That gives me 100

profit for my sale price.

I mean, what do I

need...? Yeah, exactly...

People will buy,

and they'll spend half a

million or a million pounds,

and buy, you know, 25 cases of Lafite

and 25 cases of Latour,

and four or five years

time, they sell it.

They've never seen the wine.

They don't even know what

the bottle looks like.

Here we've got X

number of thousand cases.

Average value of each bottle

would be approximately

400 or 500 euros a bottle,

times by lot of number

of cases, times by 12.

Work it out yourself.

Well, the 2009

prices hit an all-time high,

absolutely astronomical prices,

and totally unexpected too.

And now, with all the hype

that's been leading into

this Primeur campaign

for the 2010 vintage...

...there is this real

worry that the Bordelais

are going to take it to

another unprecedented level.

These extraordinary rises

have put significant pressure

on traditional markets.

Bordeaux's most important

customer of the last 30 years,

already battered by the

global financial crisis,

The Americans are not going to

be buying anything from 2010.

They didn't buy anything in '09.

A few people will buy,

but America used to be

the biggest market in

the world for these wines

and it's not anymore, the

prices are just too high.

They've priced themselves

out of the market.

There's nothing, you know,

left to say about that.

But prices for the new wines

are not fixed until the

critics reveal their scores.

The higher the scores,

the higher the prices

set by the chteaux -

a situation not all

critics are happy about.

This time of year,

when I'm looking at the young wines

and I'm trying to work out

what they will be in 20 years time,

but a lot of the overlay

of my perception is...

..."How much money are they

trying to squeeze out of us?"

We are all pawns, we are all part of

helping the Bordeaux chteau owners

get as much money as possible.

Ah, yes, of course, money!

Money conducts the world, you know.

Bordeaux is all about

trade, it's all about politics,

it's all about history.

What makes its heart beat

is not, "Gosh, I've just made

a beautiful cabernet sauvignon.

"Ooh, do come along

and taste it with me,"

but, "I'm powerful and I

want to be richer than I am,

"I want to be more powerful than I am

- and I know how to do it!"

The critics

reveal their scores

and confirm the hype.

The 2010

is another miracle vintage.

Internationally renowned

critic Robert Parker

scores perfect 100s for the top wines,

but warns the chteaux

that they should drop

their prices this year,

or suffer the consequences

of an overheated market.

If you're

pushing your prices up

and you're pushing your clients

to pay more for the wines

that they've been buying for

years and years and years,

you really run the risk

of completely and utterly

divorcing your traditional markets.

Ignoring Parker's warning,

the major chteaux

immediately raise the

prices of the 2010 vintage

to an all-time high,

as much as 40% up on

the record 2009 vintage.

But the risk they are

taking is a calculated one.

Bordeaux's fate has always been tied

to the fluctuations of global markets.

With one superpower having fallen away,

they're now turning their

attention to another.

Well, as of today, we've got

271 known US-dollar billionaires.

And that compares with,

say, 10 years ago, of 1.

So we've gone from 1 to

271 known billionaires,

but you have to take into

account that the wealth in China

is a little bit like an iceberg.

So what you can see on the

top is only a small proportion

of what the total wealth

picture would actually be.

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