24 July 2007

South Africa: Top Cape Wine Estate to List Chicago Future

Cape Town — South African wines may soon be listed on the Chicago Futures Exchange alongside lean hogs and corn bushels.

Oscar Foulkes, wine marketer at Cloof wine estate, has set the process in motion by appointing asset managers to take charge of the estate's signature shiraz wine, Crucible. Flagship Private Asset Management will handle the registration of the Crucible futures on the exchange.

For each six bottles of the 2006 vintage of Very Sexy Shiraz, Cloof will give away one Crucible future which will give holders the right, but not the obligation, to buy one bottle of the 2006 Crucible at R295, the cellar price of the 2004 vintage.

This instrument not only guarantees access to a limited vintage of 4800 bottles, but does so at a discounted price. When the wine is released in October holders will have until November 15 to redeem their futures, after which they expire. Futures can be redeemed only at Cloof.

The 2003 and 2004 vintages were nominated for five stars in the John Platter guide, topping a long list of local and international awards and medals.

Foulkes says the combination of demand, stimulated by the wine's critical acclaim, and "extremely limited" supply, against a backdrop of rising fine wine prices "is having an inevitable impact on Crucible's selling price".

The Live-ex 100 index, which tracks the auction prices of the world's 100 most investable wines, is up 42% this year as global affluence chases a limited supply of top-end wines. Should the futures gain value, Foulkes believes, at some point the price of the wine could be decided by the price of the futures.

South African quality wines seemed to have hit a "glass ceiling" as far as price was concerned, unlike top French wines that could name their price, said Foulkes.

"Up to now Crucible has been available to buy on a first come, first served basis, even to Pick 'n Pay, which is un-usual for a wine of this nature," he said. "Sadly, since 2002 we have been able to produce Crucible only in 2003, 2004 and 2006. There will be no 2005 or 2007, but I do hope that we can manage a 2008 vintage," says Foulkes.

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