Liv-ex Fine Wine Market Blog

2009 trade reaches 16-month high

Demand for Bordeaux 2009 continues to intensify in anticipation of Parker's pending in-bottle scores. As you can see from the chart below, the vintage's share of trade has reached a 16-month high.

 

Claims that 2009 was the "vintage of the century" powered trade during the En Primeur campaign in June 2010. As the dust settled on the campaign, interest in the vintage receded - a common feature of the En Primeur cycle. While it is natural for demand to rise again ahead of a vintage's physical release, the 2009s were given a notably early boost when Parker reaffirmed the vintage's greatness in September and announced his Magical 20. In the last few weeks, the buzz around 2009 has grown louder and volumes of trade have risen sharply. 

Liv-ex Fine Wine 50 pauses; Mouton '08 finds a foothold

Whilst the value and volume of trade on the exchange remain strong this week, First Growth prices have edged lower. The Liv-ex Fine Wine 50, which tracks the ten most recent vintages of the Firsts, closed at 339.39 on Monday. This represents a change of -0.49 per cent week on week, but a rise of 1.48 per cent year to date. The index's top risers and fallers are show in the table below. 

All prices are for 12x75cl cases stored in bond.

Latour 2008 leads those on the way down. Having initially been touted by Parker as potentially superior to the 2005 and 2000, the 2008 was downgraded last year and prices have since declined. At the opposite end of the scale, Mouton 2008 is up 8.29 per cent week on week. The wine fell 51 per cent from its peak in December 2010 to £4,040 in early February. Mouton finally found support at this level and has recovered to £4,375. 

Critics' backing boosts 2009 prices

Following the release of James Suckling's scores last week, prices for some of Bordeaux 2009's most acclaimed wines have risen sharply. Cos d'Estournel was among Suckling's nine stars of the vintage, having achieved a perfect score. Bids on the exchange have since nudged higher and today a six-pack of Cos d'Estournel 2009 traded at a record £1,265. Pontet Canet (JS 98) has also seen an upswing in demand. The wine changed hands this morning at £1,250 per 12x75cl case - its highest level since June 2011. The chart below shows the '09's recent price movement and is taken straight from the pages of Cellar Watch. 

Though the most pre-eminent of critics, Robert Parker, will not deliver his formal verdict until the end of the month, there is no doubt that the vintage has his backing. Parker's enthusiasm rippled through the Twittersphere last week when he called 2009 "the single greatest vintage I have ever tasted". Will his scores drive prices higher? 

Burgundy prices creep north

The Liv-ex DRC Index continues to hit new highs. The index, which tracks the performance of DRC's leading Crus, consistently outperformed the Liv-ex Fine Wine 100 during the second half of 2011. Burgundy prices remained buoyant in January and the benchmark closed at 371.55 on the 31st - up 0.92 per cent month on month and 37.61 per cent year on year. 

The Burgundy 2010 campaign has no doubt played a role in the region's success. To a greater extent, however, top brands, such as DRC and Comte Vogue, have benefited from the general broadening of the market.

Lafite has seemingly lost its sparkle in Asia and buyers are turning instead to rare wines from Burgundy. In response to this, a Christie's auction in Hong Kong last weekend offered wines from the private cellar of producer Henri Jayer. The auction sold 100 per cent of its lots for £5.4 million, more than three times its pre-sale estimate. Several lots achieved spectacular results, including a case of Vosne Romanee Cros Parantoux 1985, which sold for more than £167,000. As with the Sotheby's Lafite sale in 2010, this demonstrates that - for the auction market - provenance is all-important. 

Fine wine market shows signs of improvement

As highlighted in the last Cellar Watch Market Report, bid-offer spreads tend to widen during periods of market stress or uncertainty. Encouragingly, however, the value of bids on the exchange rose in January and spreads tightened. Spreads have narrowed further since the start of the month and are currently the tightest that they have been seen the end of July. Is market sentiment turning positive?

Please note that the latest version of the L-WIN database is now available for download (free of charge) from Liv-ex.com. 

Suckling proclaims '09 "the best modern vintage ever"

James Suckling has published his revised Bordeaux 2009 tasting notes. His generous in-bottle scores reflect his enthusiasm for the vintage, which he calls "the best modern vintage ever".

Having initially judged 14 wines to be potentially perfect, Suckling has awarded nine wines 100 points. The First Growths are among his 100-pointers, with the exception of Mouton Rothschild. Although Mouton was seemingly en route to perfection in 2010, it has not quite kept pace with its siblings and comes in a touch lower at 98 points. Ausone, Lafleur and Vieux Chateau Certan, however, make the vintage's perfect inner circle, as do Super Seconds Montrose and Cos d'Estournel (which is widely believed to be a Parker favourite). 

In all, 22 wines receive 98 points and above. Among his top scorers is Malescot St Exupery, which the critic singles out as "one of the best values in high-scoring wines in my tasting". You can view Suckling's tasting notes in full on Jamessuckling.com. 

Parker is expected to publish his in-bottle scores for 2009 in the next issue of The Wine Advocate. If he too ranks the vintage more highly than its predecessors (which is not unlikely given his ebullience at WineFuture), will we see stronger interest in 2009, and in Bordeaux in general?

Where the heart is

With the western world cosying up for Valentine's Day, we thought it would be interesting to take a closer look at the estate that stole the heart of the "Prince des Vignes" in the 18th century. The Marquis Nicolas de Segur, who owned several of Bordeaux's most revered chateaux, famously proclaimed, "I make my wine at Lafite and Latour, but my heart is in Calon." 

The most northerly of the Medoc Grands Crus, Calon Segur is a Third Growth that enjoys a strong consumer following. Though the wines have received high scores from the critics, many younger vintages remain within reach of both drinkers and investors at around £400 per case. With traders increasingly turning to more affordable, lower-ranking Crus Classes, it is, perhaps, no surprise that vintages from 2000 onwards have outpaced the market and risen by an average of 13 per cent year on year.

Despite their recent run, the wines continue to offer value for money. On a pounds-per-point basis (see explanation below), the 2004 is the most compelling buy. The vintage has gained 14 per cent in the last year and - at just £380 per case - boasts 17.5 points from Jancis Robinson.

The table below shows the current price, annual change, score and POP (price-over-points) ratio of vintages 2000 to 2010. Trading members of Liv-ex can view live markets here. 

*All prices are for 12x75cl cases stored in bond. Scores are from Jancisrobinson.com.

POP

A wine’s POP score is its price-over-points ratio - our loose measure of value. It is calculated by dividing the price of a nine-litre case of wine by a 20-point score. In theory, the lower the POP score, the better value the wine is.

Cellar Watch Market Report released

The February Market Report includes: 

• Trading Activity – Bright start to 2012

• Liv-ex Fine Wine 100 – Market rises for first time in six months

• Major Movers – Return of the First Growths

• Critical Corner – Burgundy 2010: "typically Burgundian"

• Final Thought – Drawing parallels

Please log in and find the full report under the Analysis menu. Those who have not yet subscribed can download the first page of the Market Report here.

Decanter on Liv-ex and the fine wine supply chain

The March 2012 edition of Decanter magazine features an article on the fine wine supply chain intiative we announced at the WineFuture conference in November. We are reproducing the article below, with the kind permission of its author, John Stimpfig.

Liv-ex to shake up fine wine supply chain

Liv-ex, the global online trading platform, has proposed a radical shake-up of the fine wine supply chain, designed to remove the need for the constant physical movement of younger fine wines from one storage account to another.

‘Most fine wines traded on Liv-ex are not being purchased for immediate consumption’, says its director James Miles. ‘Nevertheless, they end up constantly moving from place to place simply to transfer the title of ownership. This process is unbelievably expensive, risky and detrimental to the provenance and condition of the wine.’

Liv-ex’s high-tech solution is to create a central electronic depository to store and manage ownership records of wines lying in multiple locations. ‘This would allow for the title to be transferred electronically, thus eliminating the need to move wine between countries or bonded warehouses,’ Miles points out.

As an example, he quotes the 2008 Bordeaux vintage which went up dramatically in price after its en primeur release and consequently saw considerable trading. ‘As a result, a case of wine could easily have gone from the chateau to negociant, then making short stays in Germany, London and New York before ending up in Asia. Under the new system it could simply remain in a certified warehouse in Bordeaux. It would effectively become ex-chateau stock.’

Liv-ex believes the change would not only benefit consumers but also producers, merchants and warehouse operators. Cost would be reduced and not moving young wines would eliminate problems of damage, loss and theft. A move towards electronic records would also improve traceability, provenance and condition.

Alun Griffiths MW, wine director at London merchant Berry Bros & Rudd, says the move ‘would give greater assurances to consumers about the provenance and storage history of the wine.’

Johnny Goedhuis, chairman of London merchant Goedhuis, adds: ‘This is a mammoth task that Liv-ex is taking on and it will be a long-term project. But if they can pull it off, it would make a dramatic difference by speeding up transactions times and cutting costs. My only concerns would be over quality of storage and stock control. Assuming these could be overcome, I am extremely supportive.’

Liv-ex’s Miles acknowledges that the project will require time, financial resources and technical development, as well as the support of colleagues in the distribution chain. ‘I am sure there will be plenty of problems,’ he admits, ‘but that’s inevitable when you try to launch something on this scale.

‘However, we believe we are uniquely placed to do this and are 100% behind it. Already we are putting infrastructure components into our own systems which Liv-ex members will be able to use next year. We don’t expect people to adopt it from day one and others may well take some time to opt in. But we are confident that this is the right way forward because it’s a win-win situation for everyone.’

Talbot ticks up

Recent discussion on the health (or otherwise) of the fine wine market has generally centred on the fortunes of the First Growths and the Super Seconds. But it is worth remembering that there is a great deal of excellent wine at just below this exalted level that is quietly holdings its price - and in some cases actually posting price rises. 

One such wine is Talbot, the St Julien Fourth Growth that has long been particularly popular in the UK. 

As you can see in the table below, it has weathered the recent  correction relatively unscathed, with prices rising 13%, on average, over the last 12 months. And with Talbot costing less than £500 per case in multiple vintages, it still represents excellent value for money for those wanting to pop the corks.

One vintage to watch is the  2009, which is expected to receive scores in the low-90s from both the Wine Spectator and the Wine Advocate. The only other Talbots boasting similar scores - the 2000, the 1986 and the 1982 -  cost upwards of £600, £1,000, and £1,500, respectively. Trading members can find live market here.

All prices refer to the Liv-ex Best List Price for a 12x75cl case in-bond. WS=Wine Spectator. JR=Jancis Robinson