First Growths: back to 2011

Last month, the Liv-ex 1000 index reached a record high for the seventh consecutive month. The index previously reached a high in July 2011 at the peak of the China-led bull market before falling to a low in August 2014.

Other Liv-ex indices have not been making the same records. The Liv-ex 100 has been rising, but is yet to surpass its previous highs; the Liv-ex Fine Wine 50 – which tracks the daily price movements of the First Growths – remains 22.8% below its peak in 2011.

Still, several First Growths are now close to or above their 2011 Trade Prices. The chart below shows those that are within £500 of their highest prices during the bull market.

Mouton Rothschild and Haut Brion are both well represented, and a handful of Latour and Margaux vintages have climbed back to levels seen six years ago. As yet, no Lafite Rothschild vintages feature.

FG trade 2017 v 2011

Six of the wines shown above are currently commanding higher prices than during the bull market (2010-12). Mouton Rothschild 2003, for example, currently has a Trade Price of £4,500 per 12×75, marginally higher than levels reached in 2011.

mouton 03

Others are inches away from breaking through their previous highs. Mouton Rothschild 2002, for example, is just 0.6% off its peak Market Price.

As the fine wine market continues its momentum, it remains to be seen if trade prices will continue to rise.

Bull market prices are the highest price that the wine has traded at between the 1st January 2010 and 1st January 2013. The 2011 wines were released towards the end of this period, after the market peaked.


 

Fine wine merchants bullish in 2017 – survey results

Liv-ex 100 in 2017: merchant predictions

Liv-ex members are expecting the fine wine market to rise further in 2017, according to the results of a survey conducted in February.

On average, respondents expect the industry benchmark Liv-ex 100 index to increase by 7.8% this year to close on 320.6. This would represent a second year of strong gains for the market.

So far, the index is has edged up by 1.7% after posting gains in both January and February.

The vast majority of respondents expect the index to move upwards. 89% of those surveyed predicted that the index will rise; just 9% think it will fall. A small handful expect it to run completely flat.

The most optimistic respondent expects gains of 31%; the most pessimistic predicts a drop of 15.9%.

In 2016, members underestimated price rises for the year. Their average prediction was for gains of 5.4%. The reality was an increase of 24.8%.

Liv-ex members represent the largest pool of professional fine wine traders in the world. Its 440-strong member base is estimated to account for 95% of fine wine turnover globally.


Liv-ex 1000 increases 0.6% in February

ten years

The Liv-ex 1000 Index – the broadest measure of the fine wine market – closed February 2017 at another new high of 303.15. This is an increase of 0.6% on January’s close of 301.24 – the previous all-time high of the index. It has now reached record highs for seven consecutive months and is up 21.6% year-on-year.

The index previously reached a high of 279.69 in July 2011 at the peak of the China-led bull market. It then fell 13.3% before hitting a low of 242.6 in August 2014.

sub indices

Amongst the Liv-ex 1000 sub-indices, Burgundy has been leading the charge. Over one year the Burgundy 150 index (+25.9%) has increased the most, outpacing the Bordeaux Legends 50 (+22.8%).

The Champagne 50 was the best performing sub-index this month, up 1.8%. The Italy 100 and the Rest of the World 50 recorded small declines of 0.3% and 0.1% respectively.

Index 28.02.17

The Bordeaux 500 index – which tracks the price movements of the ten most recent physical vintages of 50 top Bordeaux Chateaux – is up 21.8% year-on-year. By sub-index, the Second Wines 50 index is the highest riser, up 31.3% over one year. The seconds have outperformed the First Growths: the Fine Wine 50 is up 25% over the same period.

The Sauternes 50 is the slowest mover of the sub-indices, but is still up 6.9% over the same period.

bdx 500 sub indices


 

Ten years on: Sauternes 2007

Over the past few weeks, Liv-ex has examined the price variations – the highest and lowest Market Prices against the current and release prices – of Bordeaux wines from the 2007 vintage. The chart below displays the same data for the highly rated 2007 wines of the Sauternes 50 sub-index of the Bordeaux 500.

In contrast to the other sub-indices of the Bordeaux 500, all five of the wines in the Sauternes 50 index have dropped in value since En Primeur.

Yquem 2007 has fallen the most and is now available for £2,100, a 46.2% decrease on its release price of £3,900. The equally scored Climens 2007 (NM 98) sees the second largest variation in price. At peak, its Market Price was 37.1% above release. Since then, it has nearly halved to £650.

Suduiraut is now trading at £319, 23.1% below release.

Despite modest rises after En Primeur, Rieussec and Coutet have fallen over 23% and are now available at £295 and £225 respectively.

Sauternes07

Previous analysis on 2007 – ten years on:


 

Ten years on: Second Wines 2007

Second wines

Last week Liv-ex analysed the price variations – the highest and lowest Market Prices against the current and release prices – of the Bordeaux First Growths from the 2007 vintage. The chart above displays the same data for the wines from the Second Wines 50 sub-index of the Bordeaux 500.

All five of the First Growths’ second wines have made staggering gains since En Primeur. Like its first wine, Carruades Lafite 2007 has risen the most – 283.3% since release – and sees the largest variation in price. At peak in August 2011, its Market Price was more than six times higher than its release of £600.

Similarly, like its first wine, Clarence Haut Brion 2007 has gained the least since release, but is still up by 113.8%. The 2007 was the first vintage from the estate to be named Clarence, rather than Bahans Haut Brion.

Petit Mouton and Pavillon Rouge are both around 10% off their peak and command Market Prices of £1,646 and £1,350 per 12×75 respectively.

Second_wines_2007


Liv-ex 1000 continues to climb

Liv-ex 1000

The Liv-ex 1000 Index – the broadest measure of the fine wine market – closed January 2017 at another all-time high of 301.24. This is an increase of 0.5% on December’s close of 299.80. The index has now reached record highs for six consecutive months and is up 21.5% year-on-year.

Sub-indices

Among the Liv-ex 1000 sub-indices, the Burgundy 150 (+25.4%) and the Champagne 50 (+22.2%) have increased the most over one year. The Italy 100 (+2.8%) made the strongest gains this month as buyers broadened their focus.

However, in January the Bordeaux Legends 50 (-0.9%) recorded small declines on the previous month.

monthly close


Liv-ex 100 gains 1.25% in January

five years

The Liv-ex Fine Wine 100 Index closed January at 301.08, up 1.25% on the previous month. The index has now risen for an unprecedented fourteen consecutive months and is up 25.3% year-on-year. It is now at its highest point since October 2011, when it closed at 308.03.

The biggest movers last month came from a number of regions. The top two were Guigal, Cote Rotie 2012 (average price, production combined of the La Las) and 100-point (WA) Smith Haut Lafitte 2009. They increased by 11.0% and 7.3% respectively. Guigal, Landonne 2012 was upgraded to 100-points at the end of December 2016 by Wine Advocate.

Pavie 2009 (WA 100) also gained 5.4%. Earlier in the month it traded at an all-time high of £3,100 per 12×75.

Overall, momentum increased in January: the index rose 1.25%, compared to just 0.4% in December. However, not all wines moved in a positive direction: Leoville Las Cases 2009 (WA 98+) and Haut Bailly 2009 (WA 100) pulled back slightly after making significant gains in previous months.

Movers


Fine wine merchants underestimate price rises in 2016

Fouryearview

Every January in the Liv-ex members’ survey, we ask fine wine merchants to estimate the closing level of the Liv-ex 100 index that year. For the first time since 2013, when we first asked for predictions, the index has performed better than Liv-ex members expected. It gained 24.8% to close on 297.33; on average, merchants predicted a rise of just 5.4%.

This year, almost all merchants underestimated the gains made by the index: 98.9% thought it would perform worse than it did. The lowest guess was for a closing level of 215; the highest estimation was 300 – just 2.67 points too high. Several expected the market to decline last year, with 14.1% predicting that the index would drop.

The winner in 2016 was the person that made the second highest guess of all those surveyed – he who dares, wins. In this case, he won a magnum of Louis Roederer Brut 1990.

predictions_v_reality


 

 

Talking Trade: Bordeaux slows, Burgundy rises

FW50

The Fine Wine 50 Index saw renewed momentum this week with Sterling dropping to a 31-year low against the Dollar. The index increased 0.5%, closing Thursday at 337.73. Trade by value and volume was up, but it was not a strong week for Bordeaux with the region’s trade share at 59.1%.

Regional

Meanwhile, this week saw the Burgundy 2015 En Primeur tastings kick-off in London with early consensus suggesting the vintage will be very good. Jancis Robinson said “the 2015 reds are seriously impressive – though for those paying in pounds they will also be seriously expensive.”

Activity for Burgundy was solid on the market. The region saw a mix of young and old vintages trade with Dominique Laurent Chambertin Vv 2006, Armand Rousseau Chambertin 2014, and high-value DRC Romanee Conti 1996 all finding the bid. Neal Martin has awarded DRC Romanee Conti 1996 a score of 99-100 and said it was “perfectly balanced.”

It was also a strong week for Champagne. Salon, Mesnil 2002 was the top wine traded by value and Verve Clicquot, Yellow Label NV was in the top five wines traded by volume. Other Champagnes that traded this week included Moet & Chandon, Dom Perignon 2006 and Louis Roederer, Cristal 2006.

Value

The value and volume tables were mixed this week with wines from Champagne, Bordeaux, Italy and Burgundy all finding the bid. San Guido Guidalberto 2014 was top by volume. Antonio Galloni said the wine, “doesn’t have the richness or overtness of most years, but it makes up for that with its understated, silky personality.” He scored it 88 points.

Volume

95-point Pichon Baron 2008 hit at an all-time high of £890 per 12×75 this week. This is 2.3% above its previous high of £870 it struck in July 2011 during the China-led boom. Robert Parker said the wine was “gorgeous” and “well-proportioned”, upgrading it from its original barrel score of 92-94 points.

Pichon Baron

Looking for weekend reading? This week, Liv-ex published a blog on Lafite’s premium. You can also view a Spotlight on Beychevelle and read about Vine’s 1,000,000th case.


 

Liv-ex 1000 closes 2016 at another all-time high

lvx1000

The Liv-ex 1000 Index – the broadest measure of the fine wine market – closed December 2016 at an all-time high of 299.80. This is an increase of 1.1% on November’s close of 296.60. The index finished the year 22.3% higher than it was at the end of December 2015. It has risen for thirteen consecutive months.

lvx1000-sub

Among the Liv-ex 1000 sub-indices, the Burgundy 150 (+26.0%), Bordeaux Legends 50 (+24.9%) and Bordeaux 500 (+23.1%) were the top performers over 2016. All of the indices received a marked boost after June 24 when the UK voted to leave the EU. A weaker Sterling has encouraged buying from Euro and, particularly, Dollar-based merchants.

However, in December the Champagne 50 (-0.9%), the Rest of the World 50 (-0.3%) and the Italy 100 (-0.2%) recorded small declines on the previous month.

table