Talking Trade – Big names at the top

This week trade by value was flat whilst trade by volume climbed 17%. Bordeaux’s share remained fairly constant, but Burgundy’s share dipped back to more usual levels as interest in other regions returned. Champagne increased to 6.5%, while the US accounted for 3.3%, boosted by activity for Screaming Eagle and Opus One. The Fine Wine 50 continues to edge higher – up 0.2% this week.

region

Lafite 2010: Still off-peak

Big names dominated the top of the trade by value table for a further week. Lafite 2010 was the second most traded wine by value. Its last trade was 48% lower than at peak, around the time that it was released. This is in stark contrast to the some other vintages featured in a blog post this week.

topval

Volume traders

Dom Perignon 2006 saw significant activity this week. It was the top traded wine by volume and third by value. There was also a lot of activity across vintages of Beychevelle, which comprised a total 5.9% of trade by volume, beaten only by Lafite and Mouton.

topvol

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.


 

Spotlight on… Lafite Rothschild

chateau-lafite-rothschild-pauillac-france-10179204

Owner: Baron Eric de Rothschild

Classification: Premier Grand Cru (First Growth)

Vineyard area: 115 hectares

Colour: Red

Standard blend: Cabernet Sauvignon (80-95%), Merlot (5-20%), Cabernet Franc (0-5%), and Petit Verdot (0-5%).

Total annual production: 420,000 to 480,000 bottles

History

Records show that the first vines were planted at Lafite in the 1670s. Early customers included both British Prime Minister Robert Walpole and US President Thomas Jefferson.

In the years following the French Revolution, Lafite changed ownership numerous times until Baron James de Rothschild purchased Chateau Lafite in August 1868. Henceforth the estate became known as Chateau Lafite Rothschild.

The end of the 19th Century and the beginning of the 20th Century were turbulent decades for the Chateau. The vineyard was severely impacted by the phylloxera crisis and mildew, forcing the estate to declassify certain vintages between 1882 and 1915. Furthermore, during World War I the estate was severely impacted by supply restrictions and the financial crisis of the Great Depression led to a reduction in vineyard area.

During World War II, both Lafite Rothschild and Mouton Rothschild were confiscated and placed under public administration. A German military base was then stationed at the two Chateaux for the entire length of the occupation. By the end of 1945, the Barons de Rothschild recovered possession of Lafite and Baron Elie was responsible for re-establishing operations at the estate. A series of excellent vintages in 1945, 1947 and 1949 helped fuel efforts to re-establish Lafite Rothschild. The 1955 vintage was evidence of the wine’s rebirth. The emerging markets in the US in the 1960s, and Asia more recently have continued to help grow Lafite Rothschild into the brand it is today.

Market Performance

During the Asia-led boom for fine wine (2009-2011), Lafite became a ‘super brand’ in China and prices skyrocketed – even more than the other First Growths – as the chart below shows. Over a two-year period, the Lafite index gained over 140%.

The popularity of the brand during this period is perhaps exemplified by price movements for the 2008 vintage. In October 2010 it was announced that the bottle would carry the Chinese symbol of the figure eight, representing good fortune. The market quickly responded with trades 67% higher than in the previous month.

Lafite v FG indices - ten years

When the market started to roll over in mid-2011, prices for Lafite began to decline. In two years, the index dropped 37%.

Recovery period

At the beginning of 2016, Lafite began to show tentative signs of recovery. It is now the best-performing First Growth over one year, up 29.2%. It has outperformed the Fine Wine 50 which is up 25% over the same period.

Lafite v FG indices

Market Prices

The chart below compares Lafite Market Prices to their Wine Advocate scores. Lafite partly follows the traditional pricing pattern for fine wine, where prices rise as the wine ages and supplies diminish. However critical acclaim also appears to have some influence, with high-scoring vintages such as 2008, 2009 and 2010 commanding premiums.

Buyers willing to wait might consider the 2014 and 2015. The wines have similar scores to older vintages, but their prices are still waiting to catch up. For example, the 2014 vintage is currently trading at a discount of 30.7% to the similarly-scored 2006.

Price v Score bar

Vintage performance

The recently physical 2014 vintage has been the top performer over the past twelve months, up 40.1%. This time last year the wine was the cheapest vintage available on the market. The similarly priced 2013 vintage followed behind with a 32.5% increase. The 2009 and 2011 have been the slowest movers of the Lafite vintages, up 23.7% and 20.3% respectively.

Vintage performance


 

Talking Trade: Bordeaux and Burgundy focus

Trade by both value and volume dipped this week. The market turned its focus to Bordeaux and Burgundy which collectively accounted for nearly 95% of trade by value. Activity for all other regions was reduced. The Fine Wine 50 index edged higher – up 0.6%. It is currently less than 1% below its 5-year high in March 2012.

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Blue chip traders

The Bordeaux First Growths took an increased 31.4% of trade by value this week. While Lafite was the most traded of the Premier Cru overall, two Mouton Rothschild vintages feature in the ‘top by value’ table.

top_val

Latour release – “Mixed reaction”

Absent from the table was Latour 2005. On Tuesday, 3,000 cases of the wine were released from the Chateau at £7,800, a 14.7% premium to Market Price. Previously, ex-Chateau releases from Bordeaux have triggered activity for lower-priced cases in the secondary market. This week, Liv-ex saw Latour 2005 trade at £7,000 per 12×75. This follows a handful of trades the previous week at £6,700.

The Drinks Business reported a “mixed reaction” to the Latour release, suggesting that sales were “apparently very strong in places and merely reasonable in others.”

Bordeaux 2014 – coming soon

Neal Martin’s report on Bordeaux 2014 in bottle is expected at the end of this month. This week, a handful of wines from the vintage traded including Pavillon Rouge, which was the most active by volume, and Montrose which has seen a flurry of trades recently.

top_vol

Also in the news

Also in the headlines this week was Laurent Ponsot’s decision to leave the family’s estate in Burgundy to establish his own winery in the region. Liv-ex published a short article looking back at the performances of Ponsot Clos Roche Vv vintages over the past year. The Liv-ex Blog also published an update on the Super Tuscan indices, highlighting a recent drop for Tignanello.


Super Tuscans: Tignanello off peak

Tignanello

The Tignanello index – which tracks prices for the ten most recent physical vintages – increased by 27.1% in 2016. Over a one year period, it remains the strongest of the Super Tuscan indices. However, so far this year the Tignanello index has slumped while its peers have continued to make gains.

Tignanello generally offers attractively lower prices relative to other major Super Tuscans. Its highest priced recent vintages, the 2004 and 2006 – £1,094 and £1,518 per 12×75 respectively – are priced at around the same level as Sassicaia’s low and mid-priced vintages. However, it appears that buyers previously hunting Tignanello value may now be looking elsewhere.

Of the last ten physical vintages, the 2005 has fallen the most so far this year, down 15.5%. It is closely followed by Tignanello 2004, down 15.3% over the same period. The 2008 has bucked the trend by gaining 13.6%.

Italy’s share of trade by value dipped in 2016 (6.1%), but has bounced back this year and was at 6.5% in February. Sassicaia 2012 and 2013, and Altesino, Brunello Montalcino 2012 were the most active Italian wines last month.

A version of this report was originally sent to Liv-ex members in an email update last week.


Ponsot: Clos Roche performance

index

Last week in an interview for Wine Spectator, winemaker Laurent Ponsot announced plans to leave the family’s Burgundy Domaine and establish his own winery in the region. In light of this recent news, Liv-ex has looked at the performance of Ponsot Clos Roche Vv over the past twelve months.

Year-on-year, the Ponsot Clos Roche Vv index – which tracks the performance of the ten most recent physical vintages – is up 25.4%. Its parent index, the Burgundy 150, is up a similar 25.9%.

As shown in the table below, the 2008 vintage has been the top price performer over the past year: it is up 71.4%. Despite this significant increase, it remains one of the cheapest vintages available on the market. The 2010 follows behind with gains of 36.4%. In November 2016, the wine traded at an all-time high of £4,958 per 12×75.

However, performance is not positive across the board: recent vintages 2011 and 2013 have dropped 10.1% and 13.5% respectively.

None of these come close to the heights of the acclaimed 2005 which has edged above £10,000 per 12×75 – a ‘wow’, wine, according to Allen Meadows (Burghound), with a price tag to match.

vintage


Talking Trade: Bordeaux steady, Lynch Bages takes charge

FW50

Activity for Bordeaux was steady at 66.8% this week, but its share of the market by value continues to be low in historical terms. This week Latour announced that it would release its 2005 grand vin later this month. As always, there is market speculation surrounding its ex-chateau release price.

In general, the First Growths have continued to see prices rise. The Fine Wine 50 closed Thursday higher at 341.39 (+0.5%), edging closer to its five-year high of 347.08.

Regional

It was another busy week for Italy and Champagne. The two Montalcino 2012s (Altesino and Argiano) featured again. Poggio San Polo Brunello Montalcino 2010 was also active. The most traded Italian vintages were the 2014, 2012 and 2010s.

Trade for Burgundy was much lower this week and dipped below its average of 7.9% for 2016. The region has seen a strong start to 2017, registering 18.4% and 14.2% of trade by value in January and February respectively. DRC Tache 2012 and DRC Echezeaux 2013 both featured in the top wines from Burgundy this week, alongside Prieure Roch Nuits Saint Georges Clos Corvees 2013.

Value

The top wines traded by value were from Bordeaux and Champagne. Angelus 2011 was top and traded at an all-time high of £2,285 per 12×75. According to Robert Parker, the wine is “supple and sexy with lots of blueberry and black raspberry fruit intermixed with liquorice, barbecue smoke and camphor.” He awarded it 94 points.

Latour 1996 was also active. It is a wine that has divided critics at The Wine Advocate. Parker awarded it 99 points calling it a “spectacular Latour.” It “continues to perplex” Neal Martin who awarded it 95 points.

Lynch Bages 2008

93-point Lynch Bages 2008 hit an all-time high of £1,013 this week. It is up 23.4% year-on-year, and 9.8% on its previous trade price of £923.

Lynch

Looking for weekend reading? This week, Liv-ex published two blogs on the forthcoming Latour 2005 releaseLatour 2005: ‘Fair Value’ among the back vintages and Latour 2005: a chequered past. Liv-ex also published the merchant prediction results from its survey Fine wine merchants bullish in 2017 – survey results.


 

 

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