Monday, March 14, 2011
Betting Against
I once went on a tour of Screaming Eagle. It is notable only because they don't offer any kind of tour to the public, not for a fee, almost not at all. At the time, when times were particularly good, they boasted a waiting list of 6000 people clamoring to get a few measly bottles of their wine for (at the time) $500 per bottle, plus tax and shipping. (That number is now $750+)
I bring it up because the recession that seems to have come and gone has left some people with a sense that maybe these wines, in particular, are not the best use of their money. One friend who had been courting Shafer Hillside Select got a letter saying that he was suddenly eligible to buy a few bottles. Only now he didn't have the money to do so. Essentially, the people on the waiting list were going through the same recession as the people on the mailing list.
This raises an interesting question: If people are getting more circumspect about their purchases of highly allocated wines, will one (or more) eventually go under? It could be the case that a guy who bought a vineyard/winery as a vanity project is having problems in his core business, the one that was heavily leveraged enough that he could afford to pursue his vinous fantasy. Or that the $200 bottle business is now saturated and the business model doesn't hold up in a leaner economy.
So who will be the first to sell out, merge into, or fold up? Will it be a newcomer? Last in, first out? Or could it be an icon, sitting on a library full of overpriced wines they always thought could be sold for high prices?
Discuss
