Where are port prices heading?

[Paul David]

It seems to me that over the past 2o years or so the price of port in general has gone down steadily. I'm not talking about bottles from the 50 or 60's but more about vintages such as the mid 80's and onwards. I the past those seemed to have increased in value steadily but now days a careful shopper can purchase releases from 94 & 97 in some cases for lower than release prices and every once in a while you may even pick up older releases from the 80's at similar discounts. Following prices of port on the auction index also reveals that the general price of port is on the decline. I'm sure that no one reading this in this forum is going to complain. The flip side is that this of course puts some pressure on the industry when releasing new product at higher prices. I am cretin that the overall quality of the product is going up (as well as the cost of production, but than again I would assume that supply may be going up as well while the number of port drinkers may be going down) Either way the basic rules of economics dictate that at some point prices are going to hit bottom. The big question is are we there yet? if not when? The question I would like to pose is: Where do you think the prices of port are going in the future & why? PMD

[Frederick Blais]

Very good question Paul, one way to keep price up is to lower the supply. If the number of port drinker goes down too much, producer could reduce the port production to produce table wine. Douro is the next region that is going to have a wine boom for wine drinkers. Already some cult wine have emerged from the region that should stimulate the market and the growers to have more Douro wine on the market.

How far are we from that, I don't know but I will not be surprise if in 5-10 years we could buy Taylor Fladgate wine !

[Roy Hersh]

This is an extremely well thought out topic!

I like to follow Port pricing and have watched closely since around 1990 even though I was a buyer earlier than that. The ebb and flow of prices in the last century are great lessons and the fluctuations are usually spurred by world wide economic trends, or changes in the Port market itself.

For example, when the 1963 vintage came out, the Port market was in a very serious funk (since the mid-1950s) and new Port buyers were almost non-existant. This was at a time that few Vintage Ports were purchased in the USA to begin with. The 1963s were dirt cheap on release and stayed that way for quite a few years. When the Portuguese Revolution of 1974 hit, the 1975s came on the market at low prices that were by today's standards, "silly." Fast forward to the 1991 and 1992 releases. When those wines came out, I was paying $25ish for the top wines (not Nacional, but Taylor/Fonseca/Graham's/Dow etc.) and even less for the others. In 1990-1993 I was paying betwener $39-$49 for 1977 Fonseca and just 3 years later they were at $200 in most places. The post-Dessert Storm (Iraq 1) economic downturn had ended, the "Cigar Movement" had taken place and for the first time ever, in 1996 the USA surpassed the UK as the world's leading market for Vintage Port consumption.

Things change and the pendulum swings. The Port industry is in some economic decline right now, no matter what the companies are saying. I know that there is some distress in pricing which began about April of 2004, after 3 years of steady increases of prices.

Looking forward, we are facing the 2003s with what feels like higher prices, but if you have read my "Forecast" article, you'll understand what and why the prices are jumping for the release of this small vintage. Also, stocks of older vintages have drastically been reduced both in Portugal and especially depletions of the old goods at many UK stockists. So, although there has been a decrease in the overall quantity of young VP on the market, people were buying up all the old juice at the depressed prices. I predict that it is only another year to two years where the prices will turn and we will see some significant increases, especially in the 1970/1977/1983/1985 vintages which will be at or nearing maturity. So if you are looking to buy into those vintages, I do believe you have another year or two before the tarriff will be stiff.

[Paul David]

Roy, thanks for the great analysis. I feel better about squirreling all this port in my cellar for the past few years. The deals keep getting better & I'm starting to run out of cash & storage place....It also appears to me that there seems to be a sweet (read soft prices) spot currently in the 1997 vintage and even some of the great 94's & a few 2000's are sometimes up for grabs. Another interesting point is a variance in pricing between the US & Europe. When visiting Portugal in 2001 I spoke to a few folks in the port business who were purchasing wine in the US for their own personal cellars as they claimed that it was worth while economically. I can only assume that this situation continues with the decline in the value of the $. I still feel that most Americans are not that familiar with after dinner wines which may also be another factor in addition to the soft economic conditions. PMD

[Peter Finkelstein]

I had the opportunity to see offerings from Kobrand and others in the last few weeks. As a retailer, I didn't buy any. The rep led me to believe that I wasn't alone, and that the largest retail buyer in the area had only purchased single cases this time around.

This leads me to believe that prices might be forced to come down........ IF the same thing is going on all over the world.

Peter Finkelstein

[xxxMonique Heinemans]

I can't say that prices are really going down in my country, neither in Belgium and Germany. Older (good) vintages are often much more expensive than new releases. When I look at the 1977 for instance I hardly can find one (Taylor, Fonseca, Graham, Dow) under 100 euro. The new 2003 has a pricerange from 50 to 80 euro. When I look on the web in the UK. I do can find older ones at "bargainprices", so it depents.
On the other hand vintages like 1991 and 1992 are relatively cheap. For instance: I bought the Taylor Vargellas 1991 last year for 29,50 euro, the Niepoort 1991 for 25,00 euro and the Q. de Noval 1991 for 21,50 euro.
But every year the retail is putting some 5-10% up their prices.

[Roy Hersh]

All of this is speculation based on past history and some basic economic indicators. It will be very interesting to see what really happens and look back at the forecasting that has taken place here and elsewhere.

[Chris]

I'm curious where the prices will be heading to. If they sell the top 2003 VPs for 80 euros now, how much will the same bottles they cost the in 20+ years? Who will be able to by a mature port then? And why should I pay 80 euros for a Taylors 2003 while I can have a 1977 for 110 euros even here in central Europe? I guess that primeur prices will have to come down significantly.

Chris

[Roy Hersh]

I think you should read the rest of this thread to get the answers to all of your questions. Welcome aboard the Forum!