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Right Bank 100 posts ninth consecutive gain |  |
Bordeaux 2012: all about price |  |
First Growths show the way |  |
Fine wine data from Liv-ex |
2012年DRC指数的轨迹与Liv-ex 50有些不同。在5月份当DRC指数上升到了一个新的高峰时，Liv-ex 50却正在迅速下降。虽然此品牌最终亦不能幸免地受大市影响，该指数也随后下降，但其整体0.9％的年度亏损仍远远低于波尔多的其它对手。
最引人注目的是其长期表现。自2008年8月起, DRC指数已上升了53.2％，而Liv-ex 50只上升了13％; 且DRC最近也打败了拉菲成为Liv-ex Power 100排名榜的首位品牌。但其葡萄酒让人流泪的价格（2005年份的DRC Tache每箱12x75的Liv-ex最后成交价为28,800英镑），以及市场现正追求感知价值的情况下，勃艮地能否继续保持领先于一个刚新整治了的波尔多市场呢？
The trajectory of the DRC index in 2012 was somewhat different to that of the Liv-ex 50. In May it climbed to a new peak, at a time when the Liv-ex 50 was rapidly falling. Although the brand was not immune to the prevailing climate, and the index subsequently dropped, its overall 0.9% loss for the year is far slighter than that of its Bordeaux rivals.
Most striking is its performance over time. The DRC index is up 53.2% since August 2008, while the Liv-ex 50 is up just 13%, and the DRC brand recently knocked Lafite off the top of the Liv-ex Power 100 list. Yet with many of its wines at eye-watering prices (DRC Tache 2005 last traded on Liv-ex at £28,800 per 12x75), and the market now seeking perceived value, can Burgundy hold its lead over a newly chastened Bordeaux market?
As we have reported before, top Burgundy wines have seen success against the backdrop of the Liv-ex 50’s fall. The Liv-ex DRC Index, which tracks the price movement of recent vintages of the brand's leading crus, has seen a 34.5% growth in the last two years – compared to the Liv-ex 50’s drop of 24.2%.
The gap between the two indices reached a peak in summer. Since then both indices have run relatively flat. The question today is where does the market perceive the value to lie? The contrarians out there would no doubt see a switching opportunity.
Christie’s first online-only auction three weeks ago saw many top Bordeaux underperforming, but its London and Hong Kong auctions held on 6th and 8th September brought positive news.
The private collection sold in London on the 6th generated £1,259,975, with 92% sold by lot. Several First Growths went under the hammer, with some seeing strong success: a case of Lafite Rothschild 2000 went for £16,675 – a 26% increase on its last Liv-ex transaction price – while Margaux 1996 saw a 33% increase. Wines from the Left Bank 200 also proved popular, with Leoville Las Cases 1994, Lynch Bages 1988 and Montorse 2003 seeing between a 9% and 22% increase on their last transaction prices.
Others, however, underperformed at the auction, with Mouton 1987 down 20% on its last transaction price, and Margaux 1988 down 18%. Cheval Blanc vintages hit two ends of the spectrum, with the 1990 seeing a 14% decrease on its last transaction price but the 1995 making a 31% increase.
The Hong Kong buyers seemed keener to bite than those in the London, with an impressive 97% sold by lot and 98% by value. Featuring top Burgundy in addition to Bordeaux, the auction saw many wines exceed their Liv-ex trade prices. Leoville Las Cases again proved a success as wines from the Left Bank 200 continued to charm bidders. Las Cases 2000, 2004 and 2006 all went for more than 40% above their trading prices, and Lynch Bages and Pontet Canet 2005 saw around a 25% increase on their Liv-ex transaction prices.
Those wines falling short were largely from the Right Bank, with several Cheval Blanc, Eglise Client and Vieux Chateau Certan making less than their Liv-ex price. 2006s performed particularly poorly, with VCC seeing a 28% decrease on its trade price, and Cheval Blanc 16%. Top Burgundy, including DRC Romanee Conti 2000 and DRC Tache 2002, 2003 and 2004 also undersold. Nevertheless, some DRC exceeded expectations, with a case of DRC Richebourg 2001 selling for £9,255: almost four times the value of its last Liv-ex trade.
Charles Curtis MW, head of wine for Christie’s Asia, reported on the ‘incredible energy and excitement’ that filled the salesroom, and said that ‘Results across the boards exceeded our expectations.’
All prices below are for 12x75, and have been converted to GBP.
Hong Kong
London
Plese note that Liv-ex trade prices do not include merchant margins and represent the prices merchants could expect to achieve when selling wine on the secondary market. 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 we reported in the second week of July, the Liv-ex DRC Index (which tracks the price movement of the brand’s leading five crus) has been outperforming the Liv-ex 50 over the last year.
With Burgundy experiencing its third consecutive increase in market share in July (reaching 6%, whilst Bordeaux remained at an uncharacteristically low 86%), the region may be benefitting from the First Growths’ fall from favour.
Nevertheless, the DRC index has fallen slightly (2.8%) since its peak in May, suggesting that the brand was not immune from the prevailing climate.
With much of the trade currently away, however, and the Liv-ex 50 posting stable levels over the last six weeks, we cannot expect August’s end level to indicate the DRC Index’s future trajectory. September – just over a week away – will be the month to see which direction the Liv-ex 50’s level will go, and whether the DRC Index will regain its footing.
Auction sales in the U.S. have exceeded that of Hong Kong for the first time since 2010, Wine Spectator reported today. U.S. auction totals rose from $41.2 million in the second quarter of 2011 to $45.3 million in the same time period this year. The volume of Hong Kong’s sales fell, and its totals within this period subsequently dropped from $62.7 million to just under $35 million.
Charles Curtis, Christie’s head of wine for Asia, highlighted that Burgundy, white Bordeaux and Italian wines are all performing well in Hong Kong, despite the general market gloom. All trends we have highlighted in recent months on the blog (see here, here and here).
It is interesting to note that the Spectator states that Bordeaux pricing has only fallen 4% quarter over quarter at auction. It would seem clear, however, that the First Growths have fallen in price on an individual basis far further than this that. If we look at the Liv-ex Claret Chip Auction Index (which tracks prices for high-scoring Firsts from 1995 onwards), the fall is more than double this at 10.5%. Interestingly, when calculated using the Liv-ex Mid Price, the fall is almost exactly the same at 11.1%.
The below table shows the risers and fallers at auction this year for the 33 wines in the Claret Chip Index. Three of the wines have seen their average auction price increase during 2012, while vintages of Lafite - once a huge success in Asian markets - have suffered the sharpest declines.
With the fall of the Liv-ex 50 a focus for much of the market, it is easy to forget that some wines have been quietly forging ahead in the past year.
The Liv-ex DRC Index, which tracks the price movement of recent vintages of the brand's leading crus, has increased by 9.1% since July 2011. Vintages of its leading wine Romanee Conti have excelled, with the 2003 (L-WIN 1028687) increasing in value by 24% since this time last year, and the 2008 (L-WIN 1028687) by 15%.
In the chart below, the Liv-ex 50 and DRC indices have been rebased at 100 in July 2011: their deviating paths are striking. As with the Super Tuscan 50 Index, which we featured in our July Market Report, the DRC’s upward climb over the past year is the opposite to that of the First Growths.
Against the backdrop of Bordeaux’s fall, Burgundy’s share of trade has risen from 0.8% in June 2011 to 4.7% in June 2012, suggesting that the value of its wines has not gone unnoticed.
Last week, fine wine merchants and traders attended a series of Burgundy 2010 tastings in London. Initial reactions to the vintage have been exceptionally positive, with Allen Meadows (aka Burghound) noting that the wines could in fact be superior to their 2009 counterparts. This is particularly surprising given the challenging weather conditions that growers faced in 2010.
Meadows suggests that the wines are notable for their refinement, balance and great sense of energy:
"It’s one thing to have racy acidity and punch but it’s another to ally these attributes with real substance. And this is what the 2010s do with such brilliance."
The table below shows his top picks of the vintage.
Whilst many growers overcame the elements and produced "genuinely excellent" wines, yields were down between 30 and 40 per cent on 2009. As a result, stock is in limited supply and buyers may need deeper pockets this year.
Many of our trading members have reported modest price rises of five to ten per cent across all quality levels. Of course, where vineyards (and hence production) were severely affected by the adverse weather, increases can be as high as 40 per cent. Despite this, merchants maintain that the market has absorbed the price hikes "with little if any resistance". All of the fine wine traders that we spoke to said that demand for the Premier Cru and Grand Cru reds was outstripping supply. According to one merchant, "Price is definitely not the problem. Because yields were so low, not enough stock is available." Buyers who have not been able to secure allocations will have to hunt for stock on the secondary market, where prices are likely to rise quickly.
Interestingly, anecdotal evidence suggests that there has been a strong rise in demand from Asia this year. "In Hong Kong five years ago there was no recognition [of Burgundy]," said one leading trader. "Now it's something that people are incredibly excited about. Buyers are bored with Bordeaux."
Interest from Asian clients (who are reportedly a mix of speculators and collectors) appears to be concentrated in the high-end wines, including those of Roumier. As noted last week on the blog, Asian buyers are increasingly favouring Burgundy's top labels. This was clear at the Sotheby's auction in Hong Kong on Saturday, where Bordeaux suffered but Romanee Conti sold at a premium.
We recently reported on the blog that Lafite's performance at Christie's Finest and Rarest Wines auction in Hong Kong was relatively underwhelming. Burgundy's most eminent producer, however, has created quite a stir this month.
Over the past few weeks, DRC has been a major feature of several auctions around the world, including Hong Kong, London and New York. But although top lots of Tache and Romanee Conti set new records for the estate in London and New York, the results achieved in Hong Kong are equally, if not more, significant. This can be seen from the table below, which compares the winning bids from the Sotheby's auction in New York on the 10th with those from the Christie's sale in Hong Kong on the 4th. Auction prices include buyer's premium and are shown alongside current merchant list prices.
All prices are for 12x75cl cases and have been converted to GBP.
The above comparison reveals that buyers in Hong Kong were willing to pay an average of 48 per cent more than their New York counterparts for the same vintages of DRC. This seems to confirm that Asian interest has indeed expanded beyond Bordeaux - and it is the top names from Burgundy that are first in line to benefit.
As regular readers will know, we recently attempted to value the great estates of Bordeaux. So what result would we get if we applied this same methodology to Domaine Romanee Conti?
The answer is a valution of €1.23 billion, which places it just below Mouton and just above Margaux.
Of course, the multiple of production value to estate value we used (15x) was based on historical sales in Bordeaux, not Burgundy. But for a wine such as DRC, there seems little reason why it should not equally apply.
(Please note that the same errors and omissions that applied to our original piece of research apply equally to the above).
