Liv-ex Fine Wine Market Blog

Spotlight on... Lafleur

 
 
Owner: Sylvie and Jacques Guinaudeau
Appellation: Pomerol
Vineyard area: 4.5 hectares
Standard blend: 50% Merlot, 50% Cabernet Franc
Production: 12,000 bottles p/a
Second wine: Pensees de Lafleur

History

Located near Petrus on "Le Plateau Argileux", Lafleur’s greatest vintages challenge those of its illustrious neighbour. The micro-estate was established in 1872, when Henri Greloud (the owner of Chateau Le Gay) purchased a small parcel of vines from a monsieur Bernier. André Robin acquired the property in 1915 and can be credited with the estate’s enduring ethos: “Qualité passe quantité” (quality surpasses quantity).

In 1946, management of the winery fell to André’s daughters, Thérèse and Marie Robin. Together, the reclusive sisters produced prodigious wines for several decades. But after Therese’s death in 1984, Jacques and Sylvie Guinaudeau (Henri Greloud’s great, great grandchildren) rented the vineyard from Marie. They eventually acquired full ownership of the property in 2001.

2010 vintage

An atypical blend of 62 per cent Cabernet Franc and the rest Merlot, the 2010 vintage received strong reviews from the major critics. James Molesworth of the Wine Spectator called it “super silky and refined” (95-98), whilst Ian d’Agata of Stephen Tanzer’s International Wine Cellar awarded it 96 points and described it as having “the finest, most polished tannins of all in 2010”.

Market Trends

Even the most influential critics have claimed that Lafleur is, at times, more compelling than Petrus. With this in mind, we thought it would be interesting to compare the prices and scores of top wines from both estates.

As you can see from the table below, recent vintages of Lafleur have received high praise from the Wine Spectator. In fact, those from 2000 onwards have scored an average of 94.6 points – one point shy of Petrus’ average.  Despite their similar scores, the last 12 months have actually seen the price gap between the labels widen. 

 
Prices are for 6x75cl cases stored in bond. Scores from Winespectator.com.

In September 2010, Petrus was changing hands at three times the price of Lafleur (on average). One year on, this ratio has increased to 3.6:1. Whilst Petrus continues to find favour with traders, post-millennial vintages of Lafleur have failed to sustain any real price growth and the majority remain well below their 2008 highs. A six pack of the chateau's 100-point 2005, for example, is now more than £10,000 cheaper than its Petrus equivalent.

Numerous vintages of Lafleur are currently offered on Liv-ex at discount prices. Trading members can view live markets here.

(Image courtesy of Thewinecellarinsider.com)

Cheval Blanc starts to move

In 2007, Cheval Blanc attempted to reposition itself by releasing its 2006 vintage at a 48 per cent premium to that of Latour. Subsequent releases reflected the same ambition, with the 2008 in particular coming to market at more than double the price of the First Growths.This rebranding exercise saw demand for the brand wane, and vintages from 2006 onwards posted sizeable losses following their release.

This year, however, Cheval Blanc has started to make headway. The brand as a whole has benefited from broadening market interest and recent vintages appear to be back in the saddle. The 2006, 2007 and 2008 have all posted yearly gains of more than 27 per cent, led by the 2008 at 41 per cent. As a result, the 2007 is now trading at around the same level as its London release price, while the 2008 has made a complete recovery (and more). At £3,560 per case, the 2006 still remains some way off its London release price. Nonetheless, the push that we've seen over the past few months is certainly closing the gap.

The chart below shows the average price of Cheval Blanc since December 2008. This is based on price data for wines that form part of the Liv-ex Fine Wine Investables Index (vintages 2000 onwards). As you can see, Cheval Blanc has not been immune to the general drift in prices that we've seen since the end of June, thus its average price has fallen four per cent. However, the brand has taken less of a knock than the First Growths and has outperformed the Liv-ex Fine Wine 50 Index, which has dropped by seven per cent over this period.

 

Liv-ex Fine Wine 50 Index down one per cent year to date

The Liv-ex Fine Wine 50 Index dipped below 2010 year-end levels for the first time last week. The benchmark, which tracks the price movement of the ten most recent physical vintages of the First Growths, closed at 396.41 yesterday - a fall of 1.17 per cent year to date. Over the same period last year, the index rose more than 37 per cent, having benefited from buoyant First Growth prices. 

 

First Growth performance in the second and third quarters

The Liv-ex Claret Chip Index, which tracks the price movement of top-scoring First Growths, fell 1.16 per cent last week to 412.12. High-scoring wines bore the brunt of downward pressure, though the Liv-ex Fine Wine 50 (which follows the last ten physical vintages of the Firsts) also drifted lower, ending Friday at 409.19 - down 0.70 per cent on the previous week.

The 2002 and 2005 vintages of Lafite both saw marginal increases last week, though the 2008 (which forms part of both indices) was the most notable First Growth faller and descended just over seven per cent. Elsewhere, Mouton 2006 gained around six per cent, whilst Latour 1999 rose from £4,175 per 12-pack to £4,300.

The chart below shows the quarterly price performance of the Premiers Crus since the end of 2009 (based on the basket value of the last ten physical vintages of each brand). After finishing 2010 on a high - following the ex-cellars auction in Hong Kong - Lafite was the worst-performing First in the second quarter. And unless things change rapidly in the coming weeks, it seems likely to hold on to that position for the third quarter. Mouton has fared somewhat better than its siblings this year, though all of the Firsts have drifted in price since July.

 

From top Bordeaux to top Ningxia?

 
China's thirst for fine wine has long dominated the headlines. This week, however, the story took a new turn when it was announced that Chinese producer He Lan Qing Xue had won the top honour at the Decanter World Wine Awards for its Jia Bei Lan 2009 Cabernet blend. (Read the Telegraph's article on He Lan Qing Xue's success here.) According to Decanter, the wine is only available in China and is a blend of Cabernet Sauvignon, Merlot and Cabernet Gernicht. Domaine Helan Mountain also impressed the panel and won silver and gold medals for its Classic Chardonnay and Premium Collection Riesling.

As China's nascent winemaking industry makes strides and more wineries establish themselves as leading producers, will growing numbers of Chinese buyers begin to look to local stars, rather than to those of Bordeaux, to satisfy demand?

Angelus: Putting the Right foot forward

In the September Cellar Watch Market Report (released this week) we noted that this month's major movers board comprises almost exclusively Right Bank wines, including two vintages of Angelus. With this in mind, we have conducted a more thorough analysis of Angelus' recent progress based on the price data of vintages 2000-2008.

Over the past few years, post-millennial vintages of Angelus have consistently recorded healthy price growth. Since September 2010, however, the wines' ascent has accelerated. The 2007 and 2008 have both seen a surge in demand and have risen 67 per cent and 56 per cent respectively. Other "lesser" vintages such as the 2002, 2003 and 2006 have also charged ahead and are up 30 to 40 per cent year on year.

The chart below shows the current prices of vintages 2000 to 2010. Many of these wines have seen heavy buying this year, having benefited from broadening market demand. The 2004, however, is still available in strong volumes. At £1,500 per case, the wine appears to be on the move.

 

*The major movers board shows those wines that have posted the most notable monthly increases.

Lafite underperforms at HK auction

A collection of Lafite spanning 1981 to 2005 sold for HK$4.2 million (£336,000) at a Christie's auction in Hong Kong on Saturday. Despite setting a new world record - the most expensive wine lot ever sold at auction - the collection failed to match its pre-sale high estimate of HK$4.5 million. 

Overall, the two-day sale was a success, raising £4.7 million against a pre-sale estimate of £3.7 million. More than 570 lots went under the hammer, including those featuring the top names from Bordeaux, Burgundy and Champagne. Bidders' enthusiasm for Lafite, however, was somewhat tepid. This is particularly interesting in light of the First Growth's recent descent. (Read more here.)

Lafite's relatively lacklustre performance can be seen from the table below, which compares the Liv-ex Mid Price to Lafite hammer prices. Please note that the Liv-ex Mid Price is a trade-to-trade price and does not include merchant margins. It represents the price merchants could expect to achieve when selling wine on the secondary market. (End-consumers could expect to pay 10 to 25 per cent more.) Because we are approaching the auction results from a seller's perspective, and the buyer's premium does not go to the vendor, we have used hammer prices for our analysis.

As you can see from the table below, all of the vintages sold at a discount to the Liv-ex Mid Price.

 
Prices for 12x75cl cases. Hammer prices based on a buyer's premium of 20 per cent (though this can be higher).

Hail forces early start for Lafite as Cos takes a battering

Guest blog: Gavin Quinney reports from Bordeaux on an unscheduled start to the harvest for one of the world’s most famous estates, and the severe misfortune that fell on an illustrious neighbour.

"It’s an early vintage, and not an easy one," said Charles Chevallier, the director of Lafite Rothschild, as he checked the Cabernet Sauvignon from their parcel in St-Estephe in his new harvest reception area. He certainly never thought that he’d be bringing in this late-ripening variety exactly one week before the Médoc Marathon, when over 8,000 runners in fancy dress pass through the vineyards on the second Saturday of September. (In 2010, they started picking their Cabernet on 4th October.)

Hail is, in my experience, the wine grower’s worst nightmare. In the space of a few minutes, a healthy crop can be all but wiped out. At 6pm last Thursday, 1st September, with the red harvest just days away, there were several hailstorms across the Bordeaux region. Just up the road from me at Grézillac, near Branne, a few miles south of St-Emilion, hail tore through leaves and blasted grapes in several vineyards. There was then a deluge in Vignonet, closer still to St-Emilion, as the storm continued further east. Mercifully, this was mostly just heavy rain.

On Saturday, I headed over to the Médoc and, from what I’ve seen, a sizeable chunk of St.Estephe – some 900 hectares, apparently – was by far the worst hit. As well as hail, there was an "inondation", with over 70mm of hail and rain falling, compared to barely more than 10mm of rain at the same time in Margaux.

The hailstorm cut a swathe between the vineyards of St-Estephe  –  "a corridor", witnesses said –  with the vines on the gravel mounds leading from Lafon Rochet to Cos Labory and Cos d’Estournel – and beyond to Le Crock, Haut Marbuzet and Montrose  –  taking the brunt of it. Leaves were shredded and grapes battered. 

My swift stroll around the parcels seemed to support this, with the vines on the slopes down to the Gironde estuary having less damage than those on the south and west-facing slopes and plateau. The vines to the north of the chai, or winery, were badly hit. St-Estephe’s other Super Second, Montrose, suffered much less than Cos, but several parcels were hit to a greater or lesser extent before the hail petered out at Meyney. Montrose started picking after the storm, with their large team of imported Spanish workers hard at it on Saturday.

Both the leading St-Estephe estates have seen massive investment of late, with Cos building a new winery and cellars which opened in 2008. Montrose will unveil a new barrel cellar later this year.

Also hit was Lilian Ladouys, where they were busy harvesting by machine over the weekend and de Pez, while Calon Segur and the vines around Phelan Segur, both further north near the village of St-Estephe itself, suffered only superficial damage. Calon Segur was probably spared by the gods because it had been hailed on last year.

In case you were wondering, Lafite has a 4.5 hectare (11 acre) plot in St-Estephe, opposite Lafon Rochet, and they have had a special "derogation" to transform this into Pauillac for many years. The Cabernet Sauvignon from here almost always goes into the Grand Vin – but not this year. At an estimated 50hl/ha, that’s 30,000 bottles that won’t make the cut, the best that Charles Chevallier is hoping for is for the grapes to produce wine of "second-wine" quality.

The fruit was in good condition as it was picked by Lafite’s initial squad of 70 pickers and porters, all sporting yellow safety vests as some of the rows are next to the main road. With the leaves peppered by the hail, and some of the grapes split by the impact, there was no option but to bring it in.

 
Pickers at Lafite bring in a parcel of Cabernet Sauvignon.

Meanwhile, just across the stream that divides St-Estephe and Pauillac, called La Jalle du Breuil, at least five enormous machines were out on Saturday at Lafite and Duhart Milon next door, spraying an organic "champignon" product on the grapes to combat against the onset of botrytis. Some bunches had suffered a minor impact, and any split grapes could have led to problems with rot.

UPDATE: Read Jeff Leve's interview with Jean Guillaume Prats here.

Lafite: The force behind last month's losses

The Liv-ex Fine Wine 100 Index lost four per cent in August - its third-most dramatic monthly fall since its inception in 2001. Though the majority of index constituents performed poorly - most notably the First Growths - the real millstone was Lafite Rothschild. 

Recent vintages of Lafite were under acute pressure last month, so much so that all but the 2004 saw significant price slides. The 1998 and 2008 vintages declined by around ten per cent each, whilst the 2003 and 2005 both dropped by eight per cent.

Because the Liv-ex Fine Wine 100 Index is production and scarcity weighted, and the First Growths are produced in sizeable quantities, recent vintages of Lafite have a profound effect on its monthly movements. The chart below compares the performance of the Liv-ex Fine Wine 100 Index to that of Lafite since December 2010.

    

Liv-ex Claret Chip losses in context

The Liv-ex Claret Chip Index descended -0.99 per cent last week to 421.27. Having to-ed and fro-ed since late February, the index has increased less than two per cent in the year to date. How does this sit with historical changes over this period? 
As you can see from the chart above, which shows the index's movement between January and August each year, price growth has varied considerably over the years. The Liv-ex Claret Chip Index (which measures the performance of top-rated First Growths only) recorded its worst performance in the eight months to August 2004. Prices moved rapidly in 2006 and 2007, though subsequent years saw the index record more moderate increases before upping the pace again in 2010.  

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