MEDIOBANCA STUDY: “WINE IS LIKE GOLD, A REFUGE GOOD. ONE OF THE WORLD’S GREAT WINES FOR ‘PARACHUTE’ INVESTORS AGAINST THE CRISIS”. MASSETO BY ORNELLAIA IS THE TOP ITALIAN WINE AT THE PLACE DE BORDEAUX

Wine is as precious as gold, a refuge item during times of financial crisis that is capable of ensuring superior results, even more so than property investments, which are also prey to the real estate bubble. This is the guarantee that was recently given in a study by Italian bank Mediobanca upon the occasion of the release of Masseto by the Ornellaia Estate at the Place de Bordeaux in France.

According to Mediobanca, though wines of inferior quality are tending to lose ground, higher level wines are still moving ahead, especially among consumers in emerging countries that boast higher growth rates and who can help traditional countries surpass this crisis. Mediobanca explained that the Live-ex Index, which includes 100 of the most prestigious wines in the world, has increased from January 2001 to 2008 with an average growth rate of 12.9%, while gold has increased by 13% and U.S. real estate by 4.8%, thus limiting losses even during the last months of the collapse. Even the companies quoted who are involved in the wine sector and who make the Mediobanca index of the sector have increased by 60% compared to a world stock result that registered an increase for the same period of only 17%.

Gabriele Barbaresco, head of the Mediobanca study, explained that “the current crisis can push companies to look for areas of growth in the economies of emerging countries that, though they have slowed, maintain growth rates that are still high. Italian wine, however, is increasingly oriented towards quality with a significant increase in great wine labels (+200%), 51% of which are DOCG, while common wines have fallen by 9.2%. This is also evidenced by exports, which have registered a decrease in volume though an increase in value”.



Focus – A great wine and, for investors, a “parachute” against the financial crisis: Masseto, is the top Italian wine at the Place de Bordeaux

Masseto, a rare exemplary of a single varietal wine (100% Merlot), 2006 vintage (on the market since October 2009) will have about 20% of its total world sales managed by 5 operators (negociantes) from the famous and prestigious Place de Bordeaux.

It is another step ahead for a rare wine that has many admirers who are willing to follow it to various auctions around the world in order to acquire it.

It is a product that, in recent years, has become a highly considered investment by economists and experts of the sector. It has become a true luxury item that only grows in value – up 450% since its starting price.

The commercialization of Masseto by Place de Bordeaux will only give increasing value to this precious red nectar. It is an excellent wine, a Cru, that is rare and sought after and which financial experts are now advising as a safe investment.
Place de Bordeaux and its negociants have a centuries old history of selling wines that were “born and raised” in the most prestigious wine region of France. These negociants have continuous commercial exchanges around the world and their role is a determining one for the acquisition by international mediators and collectors who ask for their advice on the wines that they offer, on their ageing capacities, the best prospects for growth, and their re-evaluation over time.

“The negociants have always managed the Gran Cru of Bordeaux and therefore they have the perfect know how in order to manage an Italian Gran Cru” – stated Giovanni Geddes, the managing director at the Ornellaia Estate – “and with this operation we will maintain full control of the traceability of our wine, we have an agreement that foresees the total transparency of where the wine will be sold and the exclusion of sales in some specific nations”.

The operation is very high profile considering the fact that, until now, no wine that was not directly linked to Bordeaux or Châteaux production had ever been admitted access to Place de Bordeaux. Masseto, therefore, is a precursor, an absolute novelty within the panorama of international wine that will be capable of paving a new road within the traditions of the great wines of the world. And Masseto, a wine that is tightly connected to its Tuscan territory, a wine that knew how to work around the fact that it was so rare abroad, became one of the most sought after wines in the world.

Masseto – a Cru that is derived from a single varietal on only 7 hectares of land and with a total annual production of 30,000 bottles – was created at the Ornellaia Estate on a whim by Lodovico Antinori, and, today, the property of Frescobaldi (who owns a total of 97 hectares of vineyards on the Tuscan coast), and has managed to stand its ground over the years when compared to the other great wines of Italy and the world until becoming one of the most coveted luxury wines, and now even an item that is considered a wise investment in these times of crisis.

Sales of Masseto at auctions are continuously on the rise both in Italy (Pandolfini, Gelardini&Romani) and abroad (Christie’s, Sotheby’s London, Sotheby’s New York). Over the time period from 1998 to the present, the value of a bottle has increased, in fact, by 446%.

The latest statistics show an average increase in the value of a bottle of Masseto of 322% when the average auction prices are compared from the past 10 years. It is impressive just the fact that the 2008 quotes for this wine have increased 70% from those of 2007. And it has even more impressive numbers for its larger formats like magnums (1.5lt) and double magnums (3 lt). Last year, at an auction in Merano, an imperial bottle (6 liters) of Masseto 2001 went for 6,948 euros, which is an increase of 500% over its commercial price in 2004.

”Within the financial panorama” – affirmed Mediobanca at a meeting that also included Serena Sutcliffe (who heads the wine department for Sotheby’s London and New York) and the head of the Mediobanca, Gabriele Barbaresco – “wine is becoming increasingly more an umbrella against the crisis: as for the case of quoted companies, their course on the stock exchange has systematically outperformed the listed prices that pertain to the mid period (January 2001 – October 2008), to the point of generating positive returns even when confronted with generalized losses in values on the different indexes. Luxury wines are, therefore, the solution to the crisis. Both at an Italian and international level, earnings are at 59% compared to 17% for stocks worldwide. But this is not all. The gap between investments in wine stocks and in the stock exchange has tended to widen over time, in constant growth for the first investment group. The toughest moment for world stocks, from January to July 2003 and the same period in 2008, corresponds exactly with the phases in which wine enterprises guaranteed ‘peaks’ of over-performance. They are true ‘parachutes’ against the ‘hole’ in the markets. The investment in wine, more so than in its stocks, has given great satisfaction. From July 2001, buying quality wine has earned on average 13.8%, more than the number one safety investment, gold (13.3%). Its capital gain is incomparable to that of real estate with only a 4.4% annual average.
Therefore, it can be considered a true “liquid gold” as it was recently called by The Guardian (October 5). The quality of wine is the true winning factor, more so than gold. In the long run, in fact, the so-called high end labels, above all those from Tuscany, will be further extended”.

And, in the case of Masseto, it is the fruit of a twenty-year effort, conducted primarily by Lodovico Antinori (and more recently in a joint venture with the Mondavi), which had its first bottling in its current form in 1987. The very first harvest was in 1986 with grapes from the Merlot vineyard that was planted in 1981.
Only since 1995, did Masseto begin its international rise thanks to acclaims it received in the most prestigious Italian wine guides. It received top scores for its 1997, 2000, 2001, 2004, and 2005 vintages as well as the highest acclaim worldwide for its 2001 vintage from ‘Wine Spectator’, which gave it the magazine’s top score of 100/100 and has since defined it as the Italian ‘Petrus’.