No segment of the foodie world lends itself better to Wall Street-like speculating than fine wine. And why not? Wine — along with good balsamic vinegar and a few other things — is one of the only foodstuffs that doesn’t go bad long after you purchase it. No one’s getting rich off of that slab of Kobe beef, for instance, except for the folks — including the rancher and the importer and restaurateur — who are bringing it to your plate. But good wine, as the saying goes, often does get better with age, which is one of the main reasons folks have been collecting it for centuries.
However, a new, more fanatical strain of wine hysteria has taken off like gangbusters in the past few years, even as some aspect of the trend has been around for over a decade or more: that of betting on wine futures.
Basically, the draw is this: via an established-yet-unregulated system, a customer is able to purchase a specific vintage and varietal of his or her favorite grape goodness before it’s ever bottled and publicly released. On one hand, it allows folks to get in on the ground floor, purchasing a given wine at what is likely the lowest price they’ll ever find it. The downside, of course, is that said wine might not be delivered — and which, unless you’re really loaded, you’ve yet to even taste — for up to two years and sometimes even longer.
And sometimes, not at all.
About a month ago, a man named Ronald Wallace — who counted clients including Guess? Inc. co-founders Paul and Maurice Marciano, Philadelphia Phillies pitcher Jamie Moyer and Rush Hour movie producer Arthur Sarkissian — was sentenced on charges of mail fraud, wire fraud and money laundering. After Wallace’s house of cards (corks?) collapsed in 2003, hundreds of clients claimed they were owed some $13 million worth of primo vino from the cabernet conman. Most of the orders, as it turns out, were never even made — Wallace instead spent the loot on a new Beemer, home improvements, lavish vacations and country club dues.
But Wallace even took the game one step further, allowing clients to guarantee wine futures before they were even available from the château, which, in theory, added yet another year before the investor/aficionado would begin to smell a rat in the mash and cry sour grapes.
Tens of millions of dollars each year are invested in wine futures, say experts, and the number keeps growing every year. Check the food section of the New York Times on weekends, and you’ll find half-page ads from wine dealers offering cases of Bordeaux and a number of other varietals.
Which is not to say there’s not money to be made; the consumer certainly stands to make money, but so does the winery, the wine merchant, the wine distributor, the wine importer and the wine broker. Once the loot is followed down the line, the markup can sometimes rise to upwards of 300 to 400 percent. Still, the consumer, at bare minimum, should get his wine cheaper than if he waited for the official release. To boot, he stands to make even more money if the vintage is a good one — none other than wine critic/kingmaker Robert Parker has said that “buying futures of the finest wines always makes economic sense in the great years.” Mind you, everyone else has already made their money, and too often, the average consumer doesn’t even know what the great years are going to be until it’s already too late.
It’s a perfect sport, in other words, for the same suddenly-flush-with-dough Gen-Xers and “late boomers” who just 10 years ago were still collecting baseball cards and near-mint, first-run copies of the first Fantastic Four comics. And advertisers, bless their pointy little heads, know this all too well and will flood the mailboxes of anyone who’s ever left a business card at a wine shop or innocently signed up for a foodie mailing list.
The only thing to do, of course, is to educate yourself and moreover develop a close relationship with your wine merchant (who, it goes without saying, should not be named Ronald Wallace).
There is another good option out there. If you can’t afford futures, ask your merchant about “pre-arrival” prices. Your potential for a windfall will decrease dramatically but so will the chance you’re going to get a fleecing on that Riesling.
Timothy C. Davis is an associate editor with Gravy, the official newsletter of the Southern Foodways Alliance. His food writing has appeared in Gastronomica, Saveur, the Christian Science Monitor, and the food Web site www.egullet.com. He may be contacted at timothycdavis1@gmail.com.
This article appears in Dec 13-19, 2006.
