The Fine Wine 50 has continued to rise, increasing 0.9% on the previous week. It is now at its highest level since March 2013. Trade by value and volume was lower and Bordeaux activity decreased.
It was another strong week for Champagne with its share of trade up at 23.8%. Salon, Mesnil 2004 (AG 97+) and Salon, Mesnil 2002 (AG 97) were the top wines traded by value. The Champagne 50 index has hit fresh highs in four consecutive months, climbing 8.7% since May. The region took its highest share of trade by value this year at 9.6% in September. Bollinger, Grande Annee 2004 (WA 94) was the top wine traded by volume.
First Growth trade was higher at 18.8%, up from 16.3% last week. Mouton Rothschild was the most active, representing 43% of First Growth activity. Mouton Rothschild 2006 (WA 97) was in the top wines traded by value.
Pape Clement 2012 (WA 97) was among the top five wines traded by value this week. It was also one of the top wines traded by volume.It had the second most individual wine page views on Liv-ex in September after Opus One 2013.
Second wines were active again this week. Forts Latour 2009 (WA 94) was among the top wines traded by value. Echo Lynch Bages 2012 (WA 86) was in the top wines traded by volume. The Second Wine 50 has been the best performing sub-index of the Bordeaux 500, up 28.5% year-to-date.
Containing all the latest Liv-ex research and analysis, the full issue includes:
Liv-ex 1000 still rising
Neal Martin on Figeac
Final thought: California dreamin’
To access the full report, please log in or subscribe to Cellar Watch.
You can download page one – with charts and data – here, or read the text below:
It was another strong month for the fine wine market. Trade by value increased 9.2% on the previous month. The bid:offer ratio closed the month at 1.65 and the total exposure of the market rose to £39.8 million. The Liv-ex indices all firmed and a number of wines hit record highs. Haut Brion 2012 traded at a record £3,092 and continues to be well bid.
First Growth activity
Lafite was the most traded wine this month. It accounted for 7.4% of market activity, followed by Haut Brion (5.9%) and Mouton Rothschild (5.4%). The “great” 2009, 2005 and 2010 Bordeaux were the most traded vintages. 2003 and 2012 were also active. Of the 2003s, Haut Brion was the most active. It last traded at £3,240 in September — up 29.5% from the end of last year.
Champagne gets its fizz back
Champagne took its largest share of trade by value this year at 9.6%. In last month’s report it was observed that the Champagne market had improved recently. The Liv-ex Champagne 50 index has now hit four consecutive highs, climbing 8.7% since May. Activity for Bordeaux was lower at 70.5%, while Burgundy was higher at 8.6%. Italy recorded its lowest month of trade this year at 4.2%.
Liv-ex 1000 still rising
September was a solid month for the Liv-ex indices. The Liv-ex 1000 index hit another record high, closing at 285.30. The Rest of the World 50 and Champagne 50 were the biggest movers of the sub-indices, up 3.1% and 3.0% respectively. The Liv-ex 100 increased for the tenth consecutive month, up 1.6%. It closed at 281.23 and now sits 23% below is peak of June 2011.
The Liv-ex 1000 Index – the broadest measure of the fine wine market – closed September 2016 at a fresh high of 285.30. This is an increase of 1.3% on August’s close of 281.62 – the previous all-time high of the index. It has now risen for ten consecutive months.
The fine wine market has been rising since the end of last year. It received a marked boost after June 24 when the UK voted to leave the EU. A weaker Sterling has encouraged buying from Euro and Dollar-based merchants.
Amongst the Liv-ex 1000 sub-indices, the Bordeaux 500 (+17.7%), Bordeaux Legends 50 (+20.1%) and Burgundy 150 (+17%) have increased the most this year, rising rapidly in the summer as Sterling dropped after the UK referendum. However, in September the Rest of the World 50 (+3.1%) and the Champagne 50 (+3.0%) made the strongest gains as buyers broadened their focus.
The Liv-ex Fine Wine 100 Index closed September on 281.23, up 1.59% on the previous month. The index has now risen for ten consecutive months and is up 18% year-to-date. It is at its highest point since April 2012 when it closed on 289.92.
It was also a positive month for the Liv-ex Fine Wine 50. The index closed September up 1.3%.
September’s top movers were led by Smith Haut Lafitte 2009 (WA 100) which gained 14.3% and traded at an all-time high of £1,779 per 12×75 at the end of the month. Haut Bailly 2009 (WA 100) was also up 13.2% on August. Both wines have relatively accessible price tags compared to other 100-point wines.
Three of the bottom five are from Bordeaux’s Right Bank. These have made strong gains over the past year and pulled back a little in September.
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.
Bordeaux activity was lower with the region taking 66.6% share of trade. Last week the region saw strong activity and a number of wines traded at all-time highs. First Growths were less active, representing just 16.3% of trade. Lafite Rothschild was the most active, and Lafite Rothschild 2005 (WA 96) the top wine traded by value.
It was a strong week for Champagne with its share of trade up at 12.4%. Bollinger, Grand Annee 2005, Bollinger, Special Cuvee NV (WA 91) and Taittinger, Comtes Champagne 2006 were all in the top wines traded by volume. The Champagne market has improved recently as the Cellar Watch September Market Report recently explored in detail. The Liv-ex Champagne 50 index has hit fresh highs in three consecutive months, climbing 5.6% since May. This is more than it moved in the three years between May 2013 and May 2016.
The ‘Others’ region also saw activity pick up. Wines from the USA were popular with Dominus 2008 (WA 99), 2009 (WA 97) and 2012 (98+) all trading this week. Liv-ex also saw its first ever trade for Chinese wine with Ao Yun 2013 trading between £1,410 and £1,600 per 6×75.
Second and third wines were active this week. Second wine of Sassicaia, San Guido, Guidalberto 2013 (AG 92) was the top wine traded by volume, while the third wine of Calon Segur, Chapelle Calon 2010 was second. This has been a growing trend with buyers increasingly looking for brand names at accessible price points.
Liv-ex saw its first ever trade for Chinese wine on Wednesday, when a 6×75 case of Ao Yun 2013 traded. It then saw a further flurry of activity on the market, with trades ranging between £1,410 and £1,600 per 6×75.
Ao Yun is owned by LVMH and managed by Jean-Guillaume Prats (formerly of Cos d’Estournel). The 2013 is a blend of 90% Cabernet Sauvignon and 10% Cabernet Franc.
James Suckling noted the wine’s “beautiful structure and depth”, adding: “This is a wine that really impresses with all the finesse and quality of tannins.”
Bordeaux, Burgundy, Italy, Champagne and the Rhone are the major regional groups of fine wines that regularly see secondary market activity. However, the secondary market for fine wine has been broadening. In August, Liv-ex saw its first ever trade for English wine when one 6×75 case of Nyetimber, Classic Cuvee, 2010 traded on the Exchange.
Wines from around the world do regularly trade on the Exchange. This year the fine wine market has seen activity from New Zealand, Lebanon and Chile, among others. As shown in the chart below, this group – the ‘rest of the world’ – has seen increased market share in recent years.
The September issue of The Drinks Business includes an article called “The case for efficiency”. It argues: “Technology is revolutionising the logistics behind the sale of fine wines, with Liv-ex leading the way forward”. A copy of the article can be found online here.
The article highlights the laborious nature and the potential risks involved when moving fine wine within and between warehouses – an issue that is becoming more pertinent as the market becomes increasingly global. However, by taking advantage of technological advancements, Liv-ex and the industry as a whole is becoming better prepared to deal with these challenges.
Liv-ex Managing Director James Miles explains that in order to make fine wine trading more “transparent, efficient and safe”, it has been necessary to “transform a traditionally risky and slow process into one that’s instant”. Liv-ex’s introduction of SIB (Standard in Bond) Passports,LWIN and Vine warehouse services is helping to make this a reality.
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.
Despite this climb, the wine is still trading at a small discount to the Chateau’s equally scored 2010 vintage which last saw activity on the market at £620.
Robert Parker described the 2009 as, “very concentrated as well as velvety-textured, it is a beauty of finesse, balance, purity and nobility.” He awarded it 95 points.
Several other Grand Puy Lacoste vintages have also hit new highs this year. These include the 2007 (RP 89-91) at £315 and the 2006 (RP 94) at £425 – both in September. In August, the 92-point 2005 reached £760.
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. Market activity improved with value and volume up on last week. Bordeaux activity was brisk with the region taking a 77.8% share of trade.
This week Latour 2007, Yquem 2014, Haut Brion 2006 and Mission Haut Brion 1999 were released ex-Chateau. None saw trade in the secondary market.
First Growths were more active, led by Lafite 2013 (WA 87-89) – the top wine traded by value. Haut Brion 2012 (WA 98) was also in the top wines traded by value and hit a fresh high of £3,092 per 12×75. It continues to be a popular wine and was heralded as “one of the stars of the vintage” by Robert Parker.
It was a strong week for Italy with its share of trade up at 8.1%. Tignanello 2013 and Sassicaia 2013 (WA 97) both saw good volume on the Exchange. Sassicaia 2013 traded at an all-time high of £1,100.
Pape Clement 2012 (WA 97) has seen a flurry of activity since the beginning of the month. It was the second wine traded by volume and hit a fresh high of £728. Robert Parker said it is “a truly great wine and not far off their magnificent 2005 and 2010.” The 2005 was awarded 99 points and the 2010 was awarded a perfect 100-point score.
Five weeks ago, Bordeaux grower, winemaker and writer Gavin Quinney (@GavinQuinney) of Chateau Bauduc wrote a report on the progress of the 2016 vintage. Liv-ex has once again opened up the blog to Gavin. His insider’s report on how things are shaping up for the harvest is below.
It’s five weeks since my mid-August report on ‘Bordeaux 2016’s glorious Summer’, so here’s an update on how things are shaping up for the harvest. The white harvest is well under way as we await the Merlots and Cabernets.
The ‘glorious summer’ continued, in fact, for four more weeks until the night of 13th September. It had proved to be exceptionally dry. For the 12 weeks from 23rd June (that infamous date seems a long time ago now), many areas of Bordeaux saw ten times less rainfall than the 30-year average: St-Emilion, Sauternes, Margaux and parts of the Entre-Deux-Mers had around just 14mm compared to the average of 140mm. Even Blaye, which registered more rain than most, had only 30mm in those 12 weeks – less than a quarter of the norm. It was also hot for long stretches, but as you can see from the chart below, the night-time temperatures were not unbearably warm, and the switch between cooler nights and daytime heat was beneficial for the vines.
The lengthy drought ended with a bang last Tuesday evening, with a thunderous storm that had worryingly come with a hail warning. A few hailstones caused a few anxious moments as they tapped on the windows but mercifully there was nothing more serious than that. The vineyards did, though, get a proper dousing, and not before time. The figures in my temperature and rainfall graph below refer to my local weather station. St-Emilion and the far north of the Médoc had a bit less with 32mm, while Margaux, St-Estèphe and Léognan had 47-51mm on the Tuesday and the Wednesday.
The night of the 13th also seemed to usher in the Autumn, with cooler daytime temperatures and noticeably chillier mornings. It feels that we’ve now entered the third and final stage of this year’s growing season. Spring was wet and relatively cold, Summer was very dry and comfortably hot, and now the build up to the Autumn harvest, and the harvest itself, will be dry, sunny and fresh – with any luck, of course. The forecast, at least, seems fine for the moment, and that rain might just be the refreshment that the vines called out for.
Much depends on the subsoils and how the root systems coped with the lack of any summer rain – see the table below for a comparison of recent vintages. Many better-placed vines look in a remarkably good state, while younger plants on more porous or drier ground have undoubtedly suffered. It would though, I think, be a mistake to assume it’s just a case of the top appellations versus the rest: some parcels or rows in, say, Pomerol and Margaux look markedly parched, while others in the (less expensive) Côtes look as fresh as a daisy. And vice versa.
The red vines do need some water stress in Summer to produce the best fruit but the roots need access to just enough moisture. Fortunately the wet Spring put enough in reserve for many estates.
As with last year, the argilo-calcaire (clay-limestone) terroirs of St-Emilion (pictured), for example, appear to be in rude health despite the drought. (Last year though there was rain in August.) On the Left Bank certain plots of the Haut-Médoc and its famous appellations within its borders (see Lafite, pictured) have also coped really well, while others had vines that were noticeably flagging – at least until last week’s rain. Yields have been affected by the drought but there are plenty of heavily laden bunches, especially on the Merlot. The overall crop size should be good, thanks to excellent flowering on the Merlot which makes up two thirds of the red in Bordeaux (and nearly 90% of the vineyards are red). That’s the third good production in a row following on from the poor yield of 2013.
It will be fascinating to see how the prolonged stress will have stamped its character on the vineyard sites and the resulting wines. Much will depend on the run-in for the reds, both with the weather and the decision making over harvest dates. After tasting red grapes from around the region, I’d suggest there’s no rush. The rain may have caused a little dilution but given a few weeks of dry, sunny weather, the prospects are exciting if the weather holds.
The dry whites have been and are currently being picked in the Graves and Pessac-Léognan (the first grapes were harvested at the beginning of the month) and now also in the Entre-Deux-Mers (pictured). These recent chilly mornings have been terrific for the Sauvignons and Semillons. Meanwhile, some of the larger ‘caves’ or co-ops have finished their whites already. ‘They want to make a safe wine like one from Gascony’, said one dismissive neighbour, a former head of the Entre-Deux-Mers syndicate. He started his whites today.
Given that we haven’t seen a growing season quite like this, I suspect there’ll be a few debates about what and when to pick. And that’s even before consulting the weather forecast.
If you want to see how the Bordeaux harvest progresses, I’ll be posting plenty of images on Twitter and Instagram @GavinQuinney using #bdx16.