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Investment analysis:
The current market for second wines is dominated by more sellers than buyers, one of the key factors that has driven down both prices and demand for wines such as Forts de Latour, Carruades de Lafite and Pavillon Rouge de Margaux.
One that has continued to buck the trend throughout the last couple of years and has remained firmly in favour with the Far Eastern market is Le Petit Mouton de Mouton Rothschild. It seems that whilst we are transitioning through a period when first growths and their second wines are struggling to find a settled market, Le Petit Mouton is experiencing resurgent demand and posts strong performance figures for the year.
(The average performance for comparable, young Petit Mouton vintages over last year was 22.8% with scores averaging at 89.)
One reason that demand is stronger than its counterparts is the low production levels of around 3,000pa. Scarcity of an asset has been a major factor to consider since the price correction, with those producing under 8,000 cases per annum generally benefitting most. Due to poor weather and short harvest window, 2013 produced nearly 50% their usual amounts; restricting supply even further and driving value up. Winesearcher.com and Liv-ex have in the past both highlighted the fact that Petit Mouton’s price did not rise as stratospherically as the first growths and the other second wines and therefore didn’t experience such a dramatic fall in price; subsequently it is more appropriately priced in the current market.
Demand from the Asian market, has been one of the other major factors for the wine’s strong performance this year. It seems Petit Mouton retains an unblemished profile with Asian buyers and that has been reflected by both the strong demand and trading we have experienced in 2013. Whilst we have seen interest in Carruades, Forts and Pavillon cool this year the same cannot be said for Petit Mouton.
David Wainwright, managing director of Zachys Asia Fine Wine, further confirmed this opinion when he spoke to wine writer Rebecca Gibb earlier this year explaining “Château Mouton Rothschild has been doing very well in terms of marketing and PR in Asia, especially mainland [China], this brand-building helps the popularity of Mouton and makes Petit Mouton stand out.”
*Robert Parker Jr only deemed Petit Mouton worthy of tasting in its stronger years. Even in what he considers to be ‘lesser vintages’, the wines are trading over 125% higher than the 2013.
Part of the reason for Petit Mouton’s success in 2013 is that a higher percentage of the first wine’s (Mouton Rothschild) crop made it into the second wine, pulling it ever closer to the highest scoring 1st growth of the whole vintage. This was similarly found in their 2012 vintage, which has seen almost 20% growth in just five months.
It is clear how undervalued the 2012 is when set against the youngest physical vintage – 2010 – which currently trades over 60% higher. The joint-highest scoring Petit Mouton on the market is available so far below the trend for back vintages, it’s the biggest recommendation from the whole 2013 vintage so far.
Shown above, despite being the joint-highest scoring Petit Mouton on the market, it is trading significantly lower than all other vintages.
NB. Back-vintages which Robert Parker has not tasted or given a score to have been noted as 80 for this graph. For those with a score range, the mid-point has been taken e.g. 2012 (90-92) becomes 91. As Robert Parker will not be releasing his score until July, Neal Martin’s has been used for 2013, writing for erobertparker.com.
It can be seen from this graph, taken directly from Liv-ex, that the closest comparable vintage, 2012, saw 33% growth since its release one year ago. The 2013 has been tipped by Neal Martin for a better score and has production levels of almost 50% so we conservatively forecast 20% annual growth for the next three years.
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