Latour 2005: a chequered past

Latour

This week Latour announced that its first ex-chateau release of 2017 will be its 2005 grand vin, 2011 second wine (Forts Latour), and 2012 third wine (Pauillac de Chateau Latour).

As can be seen in the chart above, 98-point Latour 2005 has not seen significant price growth since the Bordeaux market started to recover at the end of 2015. It is up only 2.4% since December 2015. Over the same period, 95-point Lafite Rothschild 2005 is up 36%, while 100-point Haut Brion 2005 has increased 22.8%.

Latour 2005 has something of a chequered past. It was originally seen as a potential ‘perfect’ wine. Robert Parker first awarded it 98-100 points in barrel and its price increased rapidly in the two years before physical release, rising 126.7% between April 2006 and April 2008.

When finally released in bottle, Parker awarded it a reduced 96 points and its price subsequently fell. Even during the dizzy heights of the China-led boom the wine failed to match the price level achieved during its pre-bottle phase. Although Parker did finally upgrade the wine to 98 points in his ten-year retrospective of Bordeaux 2005, this did not appear to do much to revive interest in the wine.

Liv-ex will follow this blog tomorrow with a more detailed analysis of the Latour release using its ‘fair value’ methodology.


 

 

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.


Talking Trade: Champagne and Italy activity, Lafite hits fresh high

FW50

Trade by value and volume was up this week, driven by activity for low value, high volume wines. The Fine Wine 50 was flat, closing Thursday at 339.76. Bordeaux activity slowed and was below February’s average share. Most other regions saw activity increase.

Regional

Italy was boosted by two Brunello Montalcino 2012s: Altesino and Argiano. A number of Super Tuscans – Sassicaia, Ornellaia and Tignanello – were also active. Sassicaia was the most traded with the 2013, 2010 and 2009 vintages all finding the bid. Sassicaia 2010 traded at £1,372 per 12×75 this week, just under its all-time high of £1,374 in August 2016.

Activity for Champagne was driven by Salon Mesnil 2004, Louis Roederer Cristal 2009 and Krug Vintage Brut 2002. Antonio Galloni has awarded 97+ points to Salon Mesnil 2004, calling it “bright, tense and crystalline.”

Volume

The top five wines traded by volume were from Bordeaux, Italy and Burgundy. Prieure Roch Nuits Saint Georges Clos Corvees 2013 and Altesino Brunello Montalcino 2012 were also among the top wines traded by value.

Top viewed

Last month, the top three traded Bordeaux vintages were 2010, 2005 and 2014. The most viewed individual wines pages were all First Growths or high-scoring Bordeaux, as shown in the table below.

Views

Lafite high

90-point Lafite Rothschild 2013 hit an all-time high of £4,000 this week. It is up 25.5% year-on-year. Robert Parker described it as a “lightweight Lafite Rothschild that does improve with aeration… yet it never scales the heights of the greatest vintages from this First Growth.”

Lafite 2013

Looking for weekend reading? This week, Liv-ex published two blogs on its benchmark indices – Liv-ex 1000 increases 0.6% in February and Liv-ex gains 0.4% in February. Liv-ex also continued to look at wines from the Bordeaux 2007 vintage – Bordeaux 2007: value and performance of the First Growths.


 

Cellar Watch March 2017 Market Report released

Fine wine market report - January 2016The Cellar Watch March Market Report has been released.

Containing all the latest Liv-ex research and analysis, the full issue includes:

  • Market holds steady
  • Ausone returns
  • Neal Martin on Mouton Rothschild
  • Right Bank movers
  • Final thought: Opus One

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:

Market holds steady

Trade this month was down on January both by value and volume. The bid:offer ratio has also edged lower to 1.22 from 1.60. However, active markets stood at 6,613 at the end of February, up from 6,232 one month ago. All of the key Liv-ex indices have continued to firm over the last month, and the Fine Wine 100 has now risen for an unprecedented fifteen months.

Bordeaux quality leads

The top five most traded wines in February were all ‘First Growths’ of the Left and Right Bank. Lafite Rothschild was the most traded, accounting for 11.6% of market activity by value. Latour (3.2%) and Mouton Rothschild (7.6%) were also active. Petrus and Cheval Blanc represented 4.3% and 3.7% of trade respectively. The most active Bordeaux vintages were 2010, 2005 and 2014.

Room for Burgundy

Bordeaux activity was up from last month but remained low in historical terms, taking 68.6% of trade by value. Burgundy slipped slightly, but was still solid at 14.2%. Italy saw trade by value increase from 6% to 6.5% last month. Altesino, Brunello Montalcino 2012, Sassicaia 2012 and Sassicaia 2013 were the most active Italian wines.

Indices continue higher

February was another solid month for the Liv-ex indices. The Liv-ex 1000 closed the month at 303 after reaching record highs for seven consecutive months. It is up 21.6% over the past year. The Rest of the World 50 and the Italy 100 were the only indices that drifted. The Champagne 50 made the largest gains last month among the Liv-ex 1000 sub-indices, up 1.8%.

For current and historic issues of the full report, please subscribe at www.cellar-watch.com


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


 

Liv-ex 100 gains 0.4% in February

5 years

The Liv-ex Fine Wine 100 Index closed February on 302.26, up 0.4% on the previous month. The index has now risen for an unprecedented fifteen months and is up 24% year-on-year. It is now at its highest point since October 2011, when it closed at 308.03.

The top two movers last month were both from Bordeaux’s Right Bank. High-scoring Vieux Chateau Certan 2009 (WA 99) was up 10.4% and Cheval Blanc 2006 (WA 97) increased 7.4%.

Two of the top risers were from the Southern Rhone: Beaucastel 2012 (WA 96) and Clos Papes 2012 (WA 96) were up 6.4% and 5.4% respectively.

100-point Smith Haut Lafitte 2009 was the biggest faller this month (-5.1%), having failed to sustain gains made in January.

movers


Bordeaux 2007: value and performance of the First Growths

This month, Liv-ex has examined the progress of Bordeaux 2007 since release. Previous blog posts looked at the price performance for the 2007 wines in the Bordeaux 500, starting with the First Growths.

The 2007 First Growths have offered a return of 64.8% on average since release. While this may look impressive in isolation, the vintage has underperformed compared to a number of other vintages. Why is this? And how have other vintages performed?

In the chart below we have wound back the clock to Spring 2008, when the 2007s were released. The red bar indicates how each of the vintages below were priced at the time, relative to their quality levels. Those below the line – 1998, 1999 and 2001, for example – might have been undervalued, while those above might have been considered overvalued according to Liv-ex’s fair value methodology.

The blue bar shows the average return to date for each First Growth vintage.

FG 2007s

Five vintages were overvalued (1997, 2000, 2005, 2006 and 2007) around the time the 2007s were released. Of these, the 2005 and 2006 have provided the smallest average returns of all those shown. In fact, the 2005 has produced the only negative return (22%) over the period.

As can be seen, the 2007 vintage was potentially overvalued by 14.1% on release. Hence many back vintages offered better value at the time. Most vintages that fell below the trend line – those that were potentially undervalued – have produced a better average return than the 2007s.

One example is the 2002. It offered the most value in Spring 2008. It was priced 23.2% below the price predicted and has since provided an average return of 102.2%. However, the 1997 vintage has produced the largest average return (125.4%), perhaps suggesting that age and scarcity have also played a role in the performance of certain vintages.


Talking Trade: Bordeaux slows, new high for Fleur Petrus

FW50

Trade by value and volume was up this week, but Bordeaux activity slowed. The Fine Wine 50 dipped slightly (-0.1%), closing Thursday at 339.68. First Growth trade was also lower at 15.5%. Lafite Rothschild was the most active (33%) of the Bordeaux Premier Crus, followed by Mouton Rothschild (24%) and Latour (22%).

Regional

Burgundy and the ‘Others’ were both solid. The ‘Others’ were boosted by the USA with a number of Screaming Eagle vintages finding the bid. They included the 2012, 2011, 2010, 2006 and 1994. The 2012 and 2010 have both been awarded 100 points by Robert Parker. He said the 2010 was “opulent and full-bodied with multidimensional personality, gorgeous purity and a stunning, flawless texture.”

Activity for Burgundy was boosted by Ponsot Clos Roche Vv 2012, Armand Rousseau Chambertin 2012 and DRC Montrachet 1995. The most active vintages from the region were the 2014, 2013 and 2010.

Value

The top five wines traded by value were all from Bordeaux, apart from Sassicaia 2013. The Super Tuscan traded at an all-time high of £1,190 per 12×75. Antonio Galloni downgraded Sassicaia 2013 from an original barrel score of 93-96+ to 92 points in-bottle. He said that “several recent bottles haven’t been as impressive as the barrel samples were last year.”

Petit Mouton 2014 and Mission Haut Brion 2012 were among the top five wines by value and volume this week. According to Robert Parker, Mission Haut Brion 2012 displays First Growth levels of quality. He awarded it 97 points.

Volume

97-point Fleur Petrus 2010 hit an all-time high of £2,018 this week and is now trading on the Exchange just 2.7% below the identically scored Fleur Petrus 2009.

Fleur 10

Looking for weekend reading? This week, Liv-ex published two more blogs on Bordeaux 2007 – Ten years on: Sauternes 2007 and Ten years on: Right Bank 2007. Liv-ex also looked at wines from the Bordeaux 2009 and 2010 vintages that carry identical scores – Great gaps or little difference: Bordeaux 2009 and 2010.


 

Great gaps or little difference: Bordeaux 2009 and 2010

Several Bordeaux wines have received equally high scores for their 2009 and 2010 vintages – but prices can be far from even. To find out where the gaps are, Liv-ex has identified 18 Bordeaux wines that have achieved equal scores in both years from Robert Parker and calculated the price differences between the two.

For a number of the Chateaux, both vintages are very closely priced. Pontet Canet 2009 and 2010 – both 100 points – currently command identical Market Prices. The two vintages of Haut Brion and Margaux are similarly close, priced within 1% of each other.

Elsewhere, the gaps are greater. 97-point Fleur Petrus 2010 – “a truly magnificent wine for this estate”, according to Parker – is the most heavily discounted against the 2009.

Montrose 2010, which was upgraded to 100 points in 2014, is yet to fully catch up with its “astounding” older sibling: It is available at 8.9% below the 2009. Still, this gap has narrowed considerably since before the upgrade when there was a 38% price gap between the two vintages.

A number of 2009s are available at discounts to the 2010s. 100–point Latour 2009, “one of the most remarkable young wines [Parker has] ever tasted”, is one example.

Prices and scores for the 18 wines considered are shown in the table below. Opportunities, perhaps, for those that share Parker’s palate.

Bordeaux 2009 and 2010 prices


 

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: