Statistical analysis and commentary for each major wine region and specific wines will be provided. This will help readers to identify pricing trends with relation to appellation and vintage.

Year 2000 in Review: Enter Australia, Stage Right

At this time last year many industry experts anticipated a lull in the fine wine market due, of course, to the euphoric finish of 1999. Several events kept this downturn from occurring, and foremost among these was the ‘discovery’ of many limited production Australian wineries. Critical praise in the Wine Advocate and Wine Spectator created instant, worldwide demand for those wines, giving many bored collectors the opportunity to pursue some fresh game. The other major spark that kept buyers active in 2000 was the release of highly acclaimed wines from the 1997 vintage in Italy and California, and 1998 Châteuneuf-du-Pape. Many producers (and critics) have declared that those vintages are destined to be the ‘Vintage of the Century’ for each of those wine regions. Indeed, we expect interest in those wines will continue to fuel demand through 2001 and beyond.

A unique quality of the wine market, one that makes it such an interesting study, is that it is intricately connected to Mother Nature. Every year, in all of the worlds major wine regions, producers and enthusiasts alike stand a’ tipped toe to discover what boons the weather might bestow. This variation means that analysis of a wine region must encompass not just the newest vintage, but how that year relates to preceding vintages. The globalization of wine distribution has also created an extremely competitive marketplace that pits France vs. Italy, Australia vs. the U.S., or Rhône vs. Bordeaux. Each region is now aggressively vying for the attention of the wine consumer, and pricing is no longer a simple matter of comparing the current vintage to the demand for and quality of the previous vintage. Producers must also take into account what’s transpiring in other wine regions and how well their wines will compete globally. Thus, in order to understand what’s on the horizon for the upcoming year it is essential to take a look back at 2000.

Australia. Wow! This region absolutely exploded onto the world wine scene. Sure, most wine enthusiasts have known for years that Australia produces world class wines, but now collectors are clamoring after bottles of Torbreck (pictured above), Fox Creek, and Noon, to name a few. And now, it appears Australia has its own super premium cult wine. Just as Bordeaux has Pétrus and Le Pin, Burgundy has DRC and Leroy, and California has Screaming Eagle, Australia now boasts the Wild Duck Creek ‘Duck Muck’. Microscopic production has forced some bottles of the 1997 vintage to eclipse the $1,000 mark, and the wine is currently averaging $924/btl. This offers some proof that Australian wines are now being viewed on equal standing with the world’s other top wine regions. One word of caution, however. The only Australian wine with an empirical track record is the Penfold’s Grange, and buyers speculating on some of the wines mentioned above should consider that the market for those wines may not be firmly developed.

Italy. We have yet to truly see what effect the outstanding 1997 vintage will have on the auction market. Many of the top wines were not available in the U.S. in time to make it into the fall auctions. Will it create an excitement for Italian wines in general, giving them the chance to fill the void created by the overpriced Bordeaux and Burgundy markets, or will demand for Italian wines decline once the 1997s disappear? To be sure, the top wines, such as Antinori’s Solaia (Wine Spectator’s Year 2000 ‘Wine of the Year’,) Ornellaia, and single vineyard offerings from Gaja will continue to show significant market appreciation. But the jury is still out on whether Italy can continue to compete against Bordeaux and Burgundy on a yearly basis.

France. Obviously, Bordeaux producers committed a major error in pricing their 1997s, and this has caused some levels consumer backlash towards their wines. Despite the charming nature of the wines, the vintage was a flop in the marketplace this past year due to their inordinately high release prices. The malaise it created might also have affected auction prices for the more highly regarded 1996 vintage. It was not uncommon to see First Growths such as Lafite and Margaux fetching less than $200/btl. Of course, the stunning 1998 wines from the Rhône Valley and a string of excellent Italian vintages also may have served to decrease the demand for Bordeaux. In 2001, merchants around the world will continue to unload their remaining stocks of 1997s at reduced prices, and hope that critical praise for many 1998s from the Right Bank will help recapture the interest of fine wine buyers. [As a side note, last summer Robert Parker released a retrospective of the 1982 Bordeaux vintage, with many wines receiving upgraded ratings. In the past this almost always resulted in substantial price increases for those wines. In 2000 this did not happen, which is either proof that Robert Parker does not exert the same amount of influence on wine prices that he once did, or, more likely, that Bordeaux prices have indeed hit the ceiling.]

Once it was ‘leaked’ in 1999 that the world champagne supply might not match demand, Champagne producers were able to make the most of the Millennium, with a record amount of wine sold at record price levels. This was all fine until retailers reported champagne sales were not as high as originally forecast. Thus, excess stocks have resulted in a drastic reduction in sales for new releases. The sales decline was also partly attributed to the fact that most of the prominent houses attempted to maintain their prices at the levels brought about by the alleged ‘shortage’ preceding the Millennium. The latter half of 2000 witnessed a dramatic marketing push by some of the major firms to expand the market for champagne. This should play out well for the consumer, as price cuts most likely loom on the horizon.

Portugal. Port producers may have made the same error the Bordelaise made in pricing their 1997s. Whether they were hoping to capitalize on the demand created by the terrific 1994 vintage or were merely wanting to prepare consumers for the record prices they expect to charge for the 2000 vintage, many producers raised prices by as much as 50% for their 1997s. Only the Quinto do Noval wines, which are riding high due to several 100 pt. ratings, have consistently found buyers on the auction market. Sticker shock seems to have caused wines from other producers to still be languishing on retail shelves. Perhaps their saving grace will be that they will face little competition for three more years until the next ‘declared’ vintage (2000) is released.

United States. For the second straight year this publication was surprised by the auction performances of California’s top cult wines. Screaming Eagle was averaging $600/btl throughout most of 1998. When 1999 rolled around, we thought buyers were crazy to push bidding past $1,000/btl. Surely the market could not continue to support such high prices? Well, we were proved wrong again in 2000, because prices for all vintages of Screaming Eagle increased by an average of 52 percent, with the average price per bottle exceeding $1,500. Prices for rare formats went up exponentially (one magnum sold for more than $10,000 at one fall auction.) Other cult wines, such as Abreu, Colgin, Bryant Family, Dalla Valle ‘Maya’, and Harlan Estate were also on the rise with all of them experiencing double digit increases. What is going to happen when the 1997s impact the scene? So far most collectors seem to be stocking up on the 1997s, since the 1998 and 1999 vintages are generally of lesser quality. Already the handful of cases of 1997 Bryant Family sold at auction approached the $1,000/btl mark, and this despite the fact that 1997 was the most abundant crop Bryant Family has yet produced! Look for 2001 to continue this unlikely trend as the rest of the 1997s are released.

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