A twenty-first century wine firm, bringing Burgundy’s reds to China

Marc Sidwell
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What is it like to work for a firm with two and a half centuries of tradition at your back? Hew Blair says it “drives you forward,” and his young broking manager Tom Jenkins agrees. The wine merchant Justerini and Brooks, the first wine firm to receive the royal warrant, has provided wines for every reigning monarch since George III, but that establishment pedigree doesn’t stop the firm from keeping an agile eye on the rapidly changing realities of a world of emerging markets and ecommerce.

In fact, argues Blair, Justerini’s has “always been one of the most innovative” – and sometimes a little too far ahead of the pack for its own good. One of the first spirit merchants to see the potential of blended whisky, its globally-famous J&B brand nearly landed a former chairman in jail in the US for “getting on the market a little bit early” at the end of Prohibition.

Today, after a decision about five years ago to focus on the very top end of wine, they are a niche merchant, specialising in and perhaps the biggest UK importer of top domaine Burgundies, Italian Barolos and Piemonte wines, Rieslings and others. One of the top three or four British wine merchants, the wine in their vault is estimated to have a cost value of some £100m, and a sale value somewhere between £250m-£500m.

“We’ve grown a lot in the last two years,” says Blair, proud of the effort they have put into sourcing exclusive wines from Bordeaux and Burgundy. But it is not just their ability to source the world’s finest wines that is setting Justerini’s apart but their interest in allowing their clients to trade their wine as an investment as well as to enjoy it as a luxury.

Justerini’s website already allows clients to trade their wine through the broking desk under Tom Jenkins, but the aim is to move soon to an open market where people can set their own prices directly. Importantly, the range of wine available to trade is truly impressive, some 6,000 different wines and vintages, outstripping certain other offers by a wide margin.

The driver behind this interest in wine investment is China. The demand from this growing global giant for the great Old World wines, especially of Bordeaux, has given wine investors the prospect of some remarkable returns – and with no capital gains tax to pay. Year on year, the Liv-ex 100, an industry index of the performance of fine wine prices, was up 40.8 per cent by 31 January 2011.

Still, the market did correct heavily in 2008, if only to rapidly continue its upward journey. Post-crisis, American buyers have also been showing signs of austerity, reducing their purchase of top-flight Bordeaux in 2009. But as Blair says, “It does hinge on China” – so long as China’s astonishing growth continues, fine wine looks promising. “People can’t really comprehend the size of the market. It’s not just Beijing, there are fine wine stores nationwide and a growing middle class.” Justerini’s is opening an office in Hong Kong, aiming to bring their St James’s Street expertise to this new clientele.

The challenge for wine investors, then, is to consider where the Chinese may look next, and Justerini’s think Burgundy is a promising choice. “They are there and they are learning. They will understand “Grand Cru” and Burgundy has more than thirty. 2009 may be the last vintage that will be reasonably priced for Burgundy. It may even go better with oriental food than Bordeaux.”

For anyone tempted to invest in these potential future favourites of the refined Chinese palate, Justerini’s Octavian vault offers ultra-secure underground storage in an ex-MOD munitions bunker, where wine is cellared under ideal conditions and is still individually labelled case by case with your name and insured to the highest level, for catastrophic loss. The vault is even owned by a separate company, Cellarers Wines, so that if the unthinkable happened and Justerini’s were to fail to make its three hundredth birthday, their customers’ precious wine would be safe from the corporate fallout.

After all, as Blair concludes, the nice thing about wine as an investment is, “if everything goes wrong, you can drink it.”

What would fill your dream wine cellar? Here are 20 thoughts from Justerini and Brooks, and the top sommeliers and wine buyers who recommended them:
1) Barolo Arborina, Altare, 1997 – Simone Galiazzo, Waterside Inn
2) Blanc Fume de Pouilly, Didier Dagueneau, 2008 – Simone Galiazzo
3) Chateau Climens, 1917 – Garry Clark, Chester Grosvenor
4) Chateau Haut-Brion – Ian Waddington, Gordon Ramsay Holdings
5) Chateau Latour, 1959 – Arnaud Goubet, Le Manoir aux Quat’ Saisons
6) Chateau Latour, 1961 – David Galetti, Le Gavroche
7) Clos de Tart, 2001 – Arnaud Goubet
8) Dom Perignon, 1985, en magnum – Garry Clark
9) Dom Perignon Rose, 1992 – Ian Waddington
10) Domaine de la Romanee-Conti, La Tache, 1978 – Nicolas Clerc, Le Pont De La Tour
11) Domaine Weinbach, Pinot Blanc, 2008 – Simone Galiazzo
12) Jordan Chardonnay, 2003 – Neleen Strauss, High Timber
13) Domaine de la Romanee-Conti, Le Montrachet, 2002 – Shana Dilworth, Orrery
14) Marsannay red, Bruno Clair, 2008 – Simone Galiazzo
15) Domaine de la Romanee-Conti, Le Montrachet, 1986 – David Galetti
16) Mouton Rothschild, 1982 – Garry Clark
17) Pol Roger, Cuvée Sir Winston Churchill, 1975 – Ian Waddington
18) Recioto di Soave, Tamellini, 2007 – Michael Deschamps, The Berkeley
19) Chateau Pavie, Saint-Emilion, 1990 – Alain Mara, Roux at Parliament Square
20) Francois Cotat, Sancerre, 1989 – Shana Dilworth

Hew Blair

Title: Chairman & Buying Director, Justerini & Brooks

Education: Harrow and Bordeaux University

Lives: The Borders of Scotland and London

Favourite wine: If I had to choose one: Chevalier-Montrachet , Domaine D’Auvenay and one that I could afford : Chateau Petite Eglise, Pomerol

Tom Jenkins

Title: Bordeaux Buyer and Broking Manager

Education: Bryanston School and the University of the West of England

Lives: Surrey

Favourite wine: Anything from Lalou Bize-Leroy (Domaine)