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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 just a brief 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, May 2008
Trading
May was the busiest month of the year to date on the exchange with
trade up 90% on last year. The 2005 vintage dominated proceedings, as
the release of Parker’s final scores led to the inevitable flurry of activity.
We also saw the first trades from the contrasting Bordeaux 2007 vintage.
As the wind was taken out of the sails of the 2005 vintage, investors
busied themselves with back vintages. The Liv-ex 100 saw a modest rise of
0.3%, up 12.3 % on May of last year. With the 2005 Bordeaux vintage
now physical and the final in-bottle scores released, it is time for a number
of the wines to be included in the index. See next month’s Market Report
for full details on the wines joining (and leaving) the Liv-ex 100.
(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
As in previous months the Bordeaux 2005s dominated the major movers
chart. Alongside the climbers, however, we saw a number of wines from
the vintage moving down in price for the first time. Of those that went
up, Vieux Chateau Certan benefited from an upgrade to 95 points
(previously 92-94) with Ausone also boosted by its 100-point status. The
Carruades de Lafite story continues, with the 1995 joining other
Carruades from strong vintages at above £1,200. Montrose 1996 saw
heavy institutional buying that cleared the market of well-priced stock.
Amongst the fallers, a number of wines that didn’t get the expected big
scores from Parker fell back. Pavie, in particular, looked priced for the
full 100 points. Haut Brion and Lafite also fell slightly, although they
are arguably somewhat protected from larger declines by their first
growth status.
Critical Corner
Final Thought
(analysed in detail in full report)
Prince Robert of Luxembourg – manager of Pessac Leognan’s two most
famous chateaux, Haut Brion and Mission Haut Brion – was in London in
May to celebrate 25 years since the purchase of the latter by the Dillon
family (of which he is the most recent leading light). A stunning vertical of
55 wines from the Chateau was the result with, somewhat unusually, less
celebrated vintages made available to taste alongside their more
illustrious brethren. The pricing strategy of the chateau has changed dramatically in recent
years, it being one of the few chateaux to release its 2006 far higher than
the 2005, which was itself three times higher than the 2004. The 2005 was
something of a watershed for the property, with its market price
increasing from £1,565 to £5,500 in less than two years – a return of 251%.
In contrast, the 2006 arrived on the secondary market at £3,250 and can
currently be purchased for £3,600 (96-100RP), a somewhat more sobering
(although still respectable) return of 10.7%. Most intriguing, however, is
the current price of back vintages. As you can see below, the 2004, 2001,
1999, 1998 and 1996 all look spectacularly cheap when compared to the
two most recent years. Indeed, the 2005 trades – incredibly – at 10 times
the price of the 2004
(more analysis in full report)
In the last 12 months it has perhaps been the news emanating from the
currency exchanges, rather than the wine critics, that has defined the fine
wine market. Since last May the value of sterling against the euro has
crashed – moving from 1.47 euros to the pound to 1.26. The US dollar has
seen a similar movement over the same period, moving from 0.74 to 0.64
dollars per euro - half its level of early 2001. This near 15% reduction in
buying power on both sides of the Atlantic has had a major knock-on
effect for the fine market, particularly when forced to buy direct from
Bordeaux, such as during an en primeur campaign or seeking out a case of
a hard-to-find Right Bank chateau.
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