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market report
Liv-ex is an electronic exchange for fine wine used by professional merchants and collectors. Market Report is part of a package of services offered to subscribers of Liv-ex, with subscriptions starting at £49.95 per year. Below is an extract from the latest Market Report. For the full report and to access Liv-Ex's services, sign-up with them at www.liv-ex.com
Liv-Ex Market Report
by Liv-ex.com, January 2010
Trading
January trading kicked off 2010 with a bang. Brisk buying ahead of the
Chinese New Year put paid to the traditional post-festive lull and
despite predictably high demand for Lafite the market was remarkably
broad. All of the First Growths were strongly bid and demand for Latour,
in particular, looks to have finally awakened from a long period of
slumber. Exchange turnover increased 60% year on year, although it
should be remembered that January 2009 was arguably the low point of
global investor confidence.
The Liv-ex 100 Fine Wine Index rose 2.7% to reach 243.7, its largest
monthly increase in almost a year. The index is now just 8% below its June
2008 high. (See www.liv-ex.com for details or find the Liv-ex 100 on
Bloomberg: see index code LIVX100.)
(more analysis in the full report)
Major Movers
January saw three different Firsts move to the top of the major movers
board; and for the first time since early summer, none of them were
Lafite. Despite continued Chinese demand for all things Lafite, the price
gap appears to be narrowing. January also saw the stunning Hermitage
Chapelle on the move. It is now firmly into its drinking window, stocks are
dwindling and prices have only one way to go.
The fall for Ausone 2006 is arguably symptomatic of the general softness
we have seen for this vintage. As the box overleaf outlines, the 2006s
remain largely unloved (despite strong Parker scores for many wines).
With stock levels remaining high an upturn in fortune looks some way off.
Elsewhere, we see Champagne, sweet wines and Port suffer from a postfestive
hangover.
* Source: erobertparker.com
Wine Name Vintage Score* Jan
Critical Corner: Jancis Robinson MW on 2008 Burgundy
Final thought — Focus on 1998 Bordeaux
(analysed in detail in full report)
Burgundy’s growers, having just battled through a difficult 2007 vintage,
were dealt more of the same in 2008. By early September (having
encountered poor fruit set, rot, mildew and hailstorms) the vintage was
looking close to disastrous. As Jancis states: “All seemed to be lost, but
then a miracle happened.”
The sun shone for close to a month, accompanied by strong and persistent
winds that dried out the grapes and concentrated the sugars. “At the best
domains… the results were certainly hugely better than expected.”
The vintage in general is described as, “nothing if not ‘fresh’”, being
characterised by high acid levels. As with all but the very best Burgundian
vintages, the key to producing good wines was conscientious work by the
grower. Only those vignerons who, “watched their vines every step of the
way have managed to produce wines that have enough flesh to
counterbalance 2008’s sometimes painful acid levels”.
The best reds are described as “absolute marvels of precision and charm”,
although in general the reds “were much harder work” than the whites,
where the “acid streak” was less jarring. As a vintage it seems to be one
“best suited to showing off Burgundy's unusual delicacy and ability to
communicate terroir”. It should also be “enjoyed relatively early: within
five or so years.”
On pricing, the vintage is being offered at a similar level to the 2007s and
should provide stimulating drinking. All of the top scoring wines (18+ and
above) are listed below (see www.jancisrobinson.com for the full report).
The 1998 vintage in Bordeaux – although considered one of the better
efforts of the 1990s , particularly on the Right Bank – is often overlooked
by the trade and collectors alike. Born into a market still reeling from the
Asian crisis and the ensuing dip in fine wine prices, it never gained the
momentum of the 1996s before it, or the 2000s after.
Twelve years on, with the lesser chateaux now well into their drinking
windows (and even some of the better wines starting to hit their stride)
the vintage deserves attention, and recent price trends suggest the market
is giving it just that. It may come as a surprise that a basket of First Growths from the 1998 vintage has outperformed all other vintages over
the past year, with an increase of 45%.
The vintage is widely considered to be one that favoured the Right Bank
over the Left. Although, as usual, it has been the Left Bank’s First Growths
that have proved the best investments, the five Firsts having outperformed
their Right Bank equivalents (Ausone, Petrus and Cheval Blanc) by more
than 25% over the past five years.
But away from the “Big Eight” does the same hold true? To find out, we
looked at top scoring wines (90+ Parker points) from both sides of the river,
five wines from Left and five from the Right (Mission, Ducru, Leoville Barton,
Palmer and Leoville Las Cases; Angelus, Pavie, Evangile, Conseillante and
Vieux Chateaux Certan). We then tracked their price from Jan ‘04 to Jan ‘10.
Over the full six year time-frame the Left Bank still comes out on top, with a
return of 102% compared to 65%. Over the past year, however, the market
seems to have turned. The Right
Bank has recently significantly outperformed the Left. Indeed, this 20%
increase makes these wines some of market’s best performers, particularly
away from the Firsts.
Those looking to expand their portfolio into something less First Growthfocused
(and at an average of £1,000 per case, more affordable) need look
no further. These wines would appear the perfect all rounders; good
investment options as well as fine additions to any drinking cellar.
(analysed in detail in full report)
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