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Market activity remains solid with trade by value up a tick on the previous week. The Liv-ex Fine Wine 50 rose 1.1%, closing Thursday at 327.68 – its highest level since April 2012. The market continues to receive a boost from a weaker Sterling which fell to a fresh 31-year low against the Dollar.
The 2016 harvest in Bordeaux is now entering its final phase. In the post below, Bordeaux grower, winemaker and writer Gavin Quinney offers an update on its progress so far.
Historic Bordeaux wines from a private collection including a bottle of Chateau Latour from the 1908 vintage and Chateau d’Yquem Sauternes dating back to 1874 go on sale at Sotheby’s in London this month, according to an e-mailed statement from the auction house.
Market activity picked up this week, increasing by both value and volume. The Fine Wine 50 closed at 321.28, firming 0.8%. The index is now at its highest level since the beginning of May 2013.
The world, or rather the pace of life dominating the developed world, is getting faster. Some call it efficiency, others a damn nuisance.
Grand Puy Lacoste 2009 hit an all-time high today when it traded at £600 per 12×75. This is an increase of 25% on its trade price of £480 at the beginning of 2016.
The Liv-ex Fine Wine 50 continued to firm and closed at 318.82 on Thursday, up 0.3% on the previous week. It is now at its highest level since May 2013
In a final report on En Primeur 2015 from fine wine trading platform Liv-ex, the company predicts that the prices seen in 2009 and 2010 are now a thing of the past.
A very good Bordeaux 2015 vintage, if a little patchy across appellations, did inspire stronger demand among wine lovers, Liv-ex said in a new report. Sales easily beat 2014 for UK merchants.
‘If we have learnt anything during the 2015 campaign, it is that those halcyon days are unlikely to return any time soon,’ Liv-ex said.
French police are investigating a possible death threat sent to the home of a Burgundy wine union president, as tension in France grows over the use of pesticides in vineyards.
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Pichon Baron 2015 has been released at €96 per bottle ex-negociant, up 45.5% on the 2014 release of €66. It is being offered by the trade at £995 per 12×75. This is 55.5% higher than the opening price of the 2014 (£640).
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Clos Fourtet 2015 has been released at €67 per bottle ex-negociant, up 32.7% on the 2014 release of €50.5. It is being offered by the international trade at £715 per 12×75. This is 45.9% up on the merchant release price of the 2014 (£490).
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Clinet 2015 has been released at €60 per bottle ex-negociant, up 36.4% on the 2014 release price of €44. The Chateau is recommending that the wine is offered by the trade at £624 per 12×75. This is a 45.1% increase on the first offer price of the 2014 (£430).
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Violent hailstorms over the weekend have wreaked havoc in Chablis, Cognac and Beaujolais, with one producer describing the situation as “apocalyptic”.
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Bordeaux wine estates are marketing their 2015 vintage on average 19 percent higher than the previous year, according to a table of 20 producers from the London-based Liv-ex wine exchange.
Read here for the full article.
With just days to go before its grand opening, we take a peek inside the futuristic €81m (£58m) Cité du Vin wine centre in Bordeaux, which has been dubbed the ‘Guggenheim of wine’.
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This month the Liv-ex bid:offer ratio touched 1.76. This is the highest level it has been since May 2010 when the market was rising strongly on the back of the China-led boom. Also this month, the total value of live bids and offers on the Exchange reached a new record of £33.4 million.
The way Bordeaux is sold is changing, and it is going to keep on changing. Despite frequently made predictions to the contrary, en primeur isn’t going to explode, nor is it likely to disappear altogether. I should also stress that nor will it return to the way it used to be, when cases were stacked high and cheap, and we could all afford first growths, or maybe super-seconds (or at least something). I believe that the approach currently taken by the Bordelais, or at least some top châteaux, which has diminished the significance of this once-feverish buying frenzy, is set to continue for the foreseeable future.
So is the fine wine investment market, after several years of losses, finally finding its feet?
Whenever anyone has bought the right wine, at the right time, at the right price with the security of an immediate exit route should the market take a turn for the worst, they have always made a healthy profit.
Recent Gatwick–Bordeaux flights will have been carrying an additional burden. It is fair to assume that every one of the many wine merchants en route to taste the 2015 vintage last week had in their luggage the 100-page, half-kilo report on the bordeaux market from Liv-ex, the global b-to-b fine-wine marketplace.
The next releases from Latour will be the remaining stocks of the estate’s 2000 grand vin and the 2009 vintage of Les Forts de Latour, the château has revealed.
The release of the 2000 tranche represents the “totality of stock still available at the estate,” Latour said in a statement, while adding that, at 16 years old, it still had “excellent cellaring potential”.
Bordeaux 2012 was not an immediate success on the secondary market. Between En Primeur release and this time last year – when the wines had become physical – the overall value of those within the Bordeaux 500 index had dropped by 2.6%. Trading activity was also low: the vintage had accounted for just 2.9% of Bordeaux trade.
Since becoming physical, the news has been more positive: the wines have made gains of 9.7% over one year, outperforming the Bordeaux 500 index which is up 0.7% over the same period. This means that the wines are now in positive territory – up 6.9% – since En Primeur release. Activity has also increased, with the vintage accounting for 9.5% of Bordeaux trade since February 2015.
You'd have thought negative interest rates would fuel a boom in diamonds, antiques and fine wine, as people look for an alternative to stuffing cash under the mattress. But you'd be wrong: prices for all three are falling.
The Liv-ex Fine Wine 50 has continued to see strong upwards momentum, reaching a fresh high this week when it hit 273.66 on Thursday – its highest level since the beginning of June 2014. In general terms, activity on the Exchange also increased with trade by value and volume up on the previous week.
Liv-ex’s Bordeaux indices are continuing to rise, especially on the Left Bank, driven by on-going demand for ‘good value’ claret.
The Liv-ex 100 gained 1.1% in January to close on 240.87. The Liv-ex Fine Wine 50 index also moved up, increasing by 1.7% over the month to close on 269.17.
The Liv-ex Fine Wine 50 Index of leading Bordeaux wines climbed in January for the second straight month, marking its first back-to-back monthly gains since June and erasing the declines of October and November.
Six bottles of 1982 Petrus from the Pomerol region of Bordeaux fetched 12,338 pounds ($17,600) at a Sotheby’s wine sale in London this week, according to an e-mailed statement from the auction house.
The price, paid by an Asian bidder, fell short of the upper estimate of 15,000 pounds for the lot. Two six-bottle lots of the same estate’s 1998 and 2005 wine sold for 10,575 pounds each.
So what might one reasonably expect from the market in 2016? In many ways a continuation of trends seen last year which have been laid out previously here but which briefly included: a broader and more ‘normal’ secondary market back to where it was around 2004 before the Chinese bubble, the lessened importance of en primeur (to a point), the pursuit of value as much as brand, a faltering Burgundian category and the growing dominance of Pessac-Léognan over Pauillac on the Left Bank of the Gironde.
The Liv-ex 1000 index – the broadest measure of the market – gained 0.3% in December to close on 245.22. This represents a 0.6% increase on 2014’s close of 243.75. The Bordeaux 500 Index gained 0.7% in December but fell 0.2% short of the previous year’s close of 238.53.
The Liv-ex 100 gained 0.7% in December to close on 238.26, a modest increase that was not quite enough to push the index into positive territory over the year. Instead it closed 2015 flat, just 0.1% below the 2014 level of 238.50. The Liv-ex Fine Wine 50, which slid in November, climbed back to close on 264.88 but fell short of 2014’s close of 266.83 by 0.7%.
The Liv-ex 100 closed November on 236.7, a drop of 1.5% on the previous month. This is the largest month on month fall that the index has seen since June 2014 when it dropped 2.9% to close on 236.02. It would need to gain 0.8% in December to close the year in positive territory. The Liv-ex Fine Wine 50 fell 1.6%: also its sharpest decline since June 2014. To close the year up, it needs to gain 2% in December.
Now second only to Bordeaux in terms of trade levels on the secondary market, Italy shows no signs of slowing down.
Italy leapfrogged Burgundy to become the second most traded regional group of wines on Liv-ex back in August and its monthly share of trade continues to climb.
In August Italy overtook Burgundy to become the second most traded regional group of wines – after Bordeaux – so far in 2015. As of the end of October, its average monthly share (year to date) is 7.1%. This is a steady increase on previous years: in 2014, it represented 5.1% of activity by value. Back in 2010, it accounted for just 0.9%.
The headline numbers for Bordeaux have been negative now for several years. The Liv-ex 50 (First Growths) is down 40% since the market’s peak; the Bordeaux 500 is down 20%; the region’s market share has fallen from 95% to 74%.
However, as the chart above shows, Bordeaux price falls since the market’s peak have not been consistent across the board.
Although the Liv-ex 50 continued to slide – dipping 0.5% this week – the Bordeaux First Growths saw an increased market share, taking 32.7% of all Liv-ex trade. The value and volume of total trade also rose significantly on last week.
Unlike last week when interest was fixed on high value wines, this week traders turned their heads towards volume purchases. Indeed, total volume traded on the Exchange was up 38% on the previous week.
The volume of wine traded on the Exchange held steady this week – but value surged as interest turned to higher priced wines. However it was not the First Growths that were pushing ahead: they represented a relatively low 22% of all trade by value.
After several years of decline, the industry benchmark – the Liv-ex Fine Wine 100 index - has been holding steady since July 2014, the market’s low point. Since then the index, which is calculated in Sterling, has gained 3.3%. But how does it look when viewed in other currencies?
Since the market’s low in July 2014, the Bordeaux 500 index has gained 2.4%. All but one of its sub-indices have edged up, leaving the Sauternes 50 index out on a limb: it has continued to drift, dropping 7.2%.
The Liv-ex Fine Wine 50 Index gained 0.2% after holding steady in September - and Bordeaux’s weekly trade share remained above 80% for the second week in a row.
The Liv-ex Fine Wine 1000 index – the broadest measure of the market – gained 0.6% in September to close on 246.97. The Bordeaux 500 index edged up 0.4%.
The Liv-ex 100 Index ran flat in September, closing on 241.65 (0.00%). It is up 1.3% year to date. The Liv-ex Fine Wine 50 also ran flat, closing the month on 269.04 (-0.03%).
Demand still high for top Burgundy at Acker Merrall & Condit’s autumn sale which realized HK$37 million.
Eighteen of the 25 sale lots came from Domaine de la Romanée-Conti as over 300 guests from five cities across Asia attended Acker’s Hong Kong sale.
While the Liv-ex Fine Wine 50 Index ran flat, both value (+53%) and volume (+31%) traded on the Exchange were up on the previous week. Although Bordeaux’s trade share remained below 70%, activity for the First Growths increased, with the five Premier Crus accounting for 39.8% of all trade by value.
Overall Haut Brion was shown to have climbed the most since the market’s low in July 2014, while Lafite Rothschild – the best performer during the China-led bull market – has continued to drift. But which Haut Brion vintages are leading the charge?
Throughout the China-led bull market, Lafite Rothschild dominated trade on the Exchange: during one week in July 2010 the Chateau represented 48% - nearly half - of all trading activity by value. Prices were flying and in November 2010 Lafite commanded an average of a 130% premium over other First Growths in the secondary market. At that time Lafite 2008, which was released with the Chinese number eight – a symbol of good fortune – etched onto the bottle, was trading for as high as £14,450 per 12x75.
Solaia 2012 is the latest in a flurry of new releases after estates including Masseto and Opus One released last week. It is being offered by merchants at £1,272 per 12x75, placing it just below the average price of recent vintages.
Bordeaux’s bid:offer ratio on Liv-ex has doubled over the last year in a sign that prices may be heading upwards again soon.The bid:offer ratio takes the total value of bids on the Liv-ex exchange divided by the total value of offers. Typically, when the bid:offer ratio moves up, prices tend to follow suit.
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