Buy now, drink later

If you are passionate about wine, well-supplied with cash, and very, very patient, now may be the right time to stock up on Château Ausone 2005. Ordering this blue-chip Bordeaux on the “futures” market while it is still aging in the barrel will set you back $1,395 a bottle, or $16,740 a case. Of course, you won’t be able to collect this robust yet ethereal red at your local liquor store until 2008 — at which point you really should let it mature in a climate-controlled cellar for at least a dozen years before taking your first sip.

Why would any sane person plunk down thousands of dollars for something they won’t taste until at least 2020? In many cases, it’s because buyers figure they’ll never have a chance to sample the most highly prized wines in the world unless they buy early. Demand for the most revered names in viniculture, especially the famed first and second growths of Bordeaux, has soared in recent years, thanks in large part to an influx of newly rich buyers from China and India. Competition for the best of the best is now both fierce and frenetic. In the spring of 2006, when the world’s top critics tasted the 2005 Bordeaux vintage en primeur, or while still in the barrel, and proclaimed it an exceptionally good year, prices skyrocketed. While you could have bought a bottle of good but not great Ausone 2004 on the futures market for $395, the futures price for the stellar ’05 vintage leaped a thousand dollars higher.

The irony is that the wine futures market began as a way for budget-conscious tipplers to save money. Growing and aging wine ties up capital for years, so wineries have traditionally been willing to give customers a discount if they pay up front, a couple of years before the wine is bottled and shipped. Sometimes the wine turns out to be worth more on the open market when it’s released than the price that futures buyers paid. When that happens, the lucky holders of the futures can choose to either take delivery of the wine or sell it back to the agent at a profit, prior to shipping.

Problem is, you can’t count on making a profit. While Bordeaux vintages during most of the 1990s yielded handsome profits for those who bought futures, the 1997 crop disappointed. Some buyers of futures in that year wound up paying more for their wine than they would have if they waited and bought their bottles when the vintage was released.

Rather than paying the price of a small car for a case of Ausone 2005, you may want to tiptoe gingerly into the world of wine futures by first trying your luck with more modestly priced Bordeaux labels, which go for as little as $35 a bottle. If you live in Ontario, you can place a futures order for as few as three bottles through the Liquor Control Board of Ontario (LCBO), although in other provinces, especially if you order through a wine club, you’re looking at buying at least a half a case — six bottles — and more likely a full case.

Darcy Kelley, an e-business strategist who sits on the board of the Toronto Vintners Club, has dabbled in both the high and low ends of the market. He bought a selection of 1995 Bordeaux second-growth futures for investment purposes 10 years ago. He stores those bottles — and others that he may someday choose to sell at auction — in climate-controlled security at Toronto’s Fine Wine Reserve. Kelley estimates that if he sells those wines five or 10 years from now, they will fetch at least three to four times the price he paid for them.

Kelley, though, isn’t tempted to repeat his 1995 success by investing in the status-label 2005s, which he thinks are already fully valued. Instead, he confined his 2005 buys to what he calls “drinkers” — wines purchased for his own consumption, at $35 to $55 a bottle, that he will store at home in a refrigerated cellar unit. Kelley’s 2005 picks, based on past experience and the critics’ en primeur reviews, were d’Angludet ($39), Dauzac ($52) and La Bienfaisance ($36). He is particularly looking forward to the d’Angludet, which Decanter magazine’s Steven Spurrier described as a dark, dense, herbaceous offering, redolent of wild violets.

Other experts also believe that you can find the best value in 2005 futures by shopping among moderately priced Bordeaux. Shari Mogk-Edwards, director of sales and purchasing for Vintages, the LCBO’s fine wine and premium spirits division, points out that many of the most revered châteaux, including Latour and Margaux, put out second wines priced at a fraction of their flagship offerings. In a year like ’05, she says, “from a pure taste perspective the value in the second labels is very, very great.”

One good way to find out about promising wine futures is to hang out with other wine lovers. Graeme Harris, a communications executive with a financial services company in Toronto, belongs to the Opimian Society, a national non-profit wine-ordering cooperative with 15,600 active members in chapters across Canada. He was thrilled when his very first futures buy, three cases of Château Cantemerle 1995, was worth so much upon release that he was able to cover about 80% of the cost of the one case he kept by optioning to sell the other two back to the sales agent. But turning a profit isn’t Harris’s main objective when he buys wine. “Ultimately, wine is like art,” he says. “It’s something you want to enjoy, not something you’re trying to make a fast buck out of.”

Best Bets
We’ve seen these futures — and they work.

We asked Natalie MacLean, one of Canada’s top wine writers (NatalieMaclean.com), and wine enthusiasts Darcy Kelley (DK) and Graeme Harris (GH) to choose their top picks in 2005 Bordeaux futures. Prices are per bottle, as quoted by the Liquor Control Board of Ontario. Initials beside each choice indicate who made the pick:

Under $50

La Tour Carnet, $49 (NM)
d’Angludet, $39 (DK)
La Croix de Gay, $46 (GH)

$50 to $200

Kirwan, $79 (NM)
Certan de May, $105 (DK)
Nenin, $99 (GH)

$200 to $500

Palmer, $385 (NM)
Cos d’Estournel, $299 (DK & GH)

$500+

Margaux, $995 (NM)
Haut-Brion, $750 (DK)
Pétrus, $1,295 (GH)