SA wine set for futures trading

25 July 2007

A leading South African wine may soon be listed on the Chicago Futures Exchange, with local wine estate Cloof appointing an asset manager to register their signature shiraz wine, Crucible, for futures trading.

Cloof’s wine marketer Oscar Foulkes told Business Day this week that the estate had appointed Flagship Private Asset Management to handle the registration of Crucible futures on the exchange.

“Last week we began distributing Crucible Futures to buyers of the 2006 The Very Sexy Shiraz, as a way of guaranteeing access to the rarest of our wines,” Cloof said on its website.

A Crucible future will give its holder the right, but not the obligation, to buy one bottle of 2006 Crucible at R295, the cellar-door price of a 2004 vintage.

“This instrument not only guarantees access to this singular wine, but does so at a discounted price,” said the estate, which is situated on the outskirts of Atlantis in the Western Cape.

“When the wine is released in October, holders will have until 15 November to redeem their futures, after which they expire. Futures can only be redeemed at Cloof.”

The Crucible shiraz is a fairly rare wine, having only been produced in 2003, 2004 and 2006, while the estate is hoping for a 2008 vintage. 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.

According to the estate, the combination of demand and extremely limited supply, against the backdrop of rising fine wine prices, is having an 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 by 42% this year as global affluence chases a limited supply of top-end wines,” Cloof said.

Foulkes told Business Day he believed that, should the futures gain value, they could at some point start to determine the price of the wines.

He said that unlike top French wines, that could command any price, South African wines seemed to have hit a “glass ceiling” as far as price was concerned.

“Up to now Crucible has been available to buy on a first come, first served basis, even to Pick ‘n Pay, which is unusual for a wine of this nature,” Foulkes said.

SouthAfrica.info reporter

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