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market report

Liv-ex is an electronic exchange for fine wine. 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. Sign-up with Liv-Ex at www.liv-ex.com

Liv-Ex Market Report

by Liv-ex.com, July 2010

Trading

With the hectic 2009 campaign now over, July saw traders (and the market) finally pause for breath. With thoughts rapidly turning towards the holiday season, prices edged lower — although trade on the exchange remained relatively buoyant, with turnover just 25% below a record June. The 2009 vintage remained in strong demand (at 39% of total exchange turnover), although the wines traded narrowed to a select group made up of the Firsts, Carruades, Pontet Canet and a handful of the most popular classed growths. The Liv-ex Fine Wine 100 Index ended the month at 301, down 1.2% on June. The Liv-ex Fine Wine 50, Liv-ex Claret Chip and Liv-ex Fine Wine Investables also posted minor falls. (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

The 2000 Bordeaux vintage posted the greatest gains last month, with Haut Brion and Leoville Poyferre rising on the back of their recent Parker upgrades. Tardieu-Laurent Cote Rotie also saw a significant boost after being named the “winning wine” at a retrospective Wine Advocate tasting of 1999 Rhone. Those on the downward slope include two Bordeaux 2007s, which continue to drift despite rising back vintage prices elsewhere, and Lafite Rothschild 2000—seemingly unsteadied by the loss of its perfect Parker score.


(analysed in detail in full report)

Critical Corner

This month, Jay Miller of the Wine Advocate rated hundreds of wines from Spain’s leading red wine regions, Rioja and Ribera del Duero. Miller looked at both the most recent releases (largely 2007) and various back vintages, filling in the holes in the Advocate’s previous coverage. He was clearly in a generous mood, with around 100 wines given scores of 95 and above and three wines judged perfect. Miller also reported on the 2009 vintage, which was exceptional in both regions. In Rioja, Miller claims, it ranks alongside the great years of 2001 and 2004, but he adds that the wines are “not quite as fantastic as in Ribera del Duero and Toro, the other important Tempranillo regions”. In Ribera, Miller states that the 2009s outshine all others, including the exceptional 2004s. “The 2009 vintage will probably be the best ever for most producers…What I tasted from barrel is truly extraordinary.” Other vintages in Ribera to look out for are 2001, which completes Miller’s top three vintages from the region, and 2005 - described as more inconsistent than 2004, but not to be overlooked. 2008 also produced some superb wines, though frost during the harvest hampered quality somewhat, resulting in a vintage that is, on the whole, “merely very good to excellent”. Of the Ribera del Duero wines scored (or rescored), Peter Sisseck’s Pingus 2004—“dense, rich and seamless”—was awarded the full 100 points. With Pingus trading at more than £6,000 per case, the 99 points awarded to 2004 Flor de Pingus (which trades at less than a sixth of the price of its big brother) makes it look the better value. Vega Sicilia also performed well with all current releases scoring 98 points and above. Over in Rioja, the big news was the extraordinary scores given to the wines of Remirez de Ganuza. In addition to the three wines listed below, the Reserva was awarded 96 points and can be found for as little as £200 per six pack. Perennial Advocate favourites Artadi, Allende and Muga also saw their recent releases awarded with a host of big scores. The table below shows a selection of those wines that received 98 points and above.


(more analysis in full report)

Final Thought

Along with resetting price expectations for young Bordeaux wines, the 2009 campaign is also likely to have another, largely unforeseen, outcome – the rise of the “six pack” (6x75cl cases). As prices have risen (and allocations per merchant have been scaled back) wines that would have once been sold almost entirely in the 12x75cl unit size are now increasingly sold in six packs. The 2009 vintage represents the culmination of a trend that has been building for some time. Lynch Bages, for example, packed 30% of their 2008s as six packs (it was 20% in 2005), and this ratio is likely to be much higher in 2009. Indeed, some of the Liv-ex member merchants have informed us that all wines above €50 per bottle will be packed in the smaller unit size. But do the top wines packed as six packs behave the same way in the secondary market as those packed in 12s? To find out, we looked at all Livex transactions in the last 12 months where the same wine has traded in numerous unit sizes in the same working week. This gave us a set of more than 650 transactions for around 150 separate wines. The results showed that those collectors who have seen their allocations stripped back from 12 bottles to just six can rest easy. Six packs have, on average, traded at just a 0.7% discount to 12s in the last year. This small difference would appear to be a result of the lower liquidity in the 6x75 contract in most wines and vintages rather than six packs being intrinsically less valuable (more than 70% of Liv-ex turnover is concentrated on the 12x75cl contract, with 6x75cl accounting for 10%). This supposition is supported by our findings for the Super Tuscans, which are more heavily traded in the 6x75cl unit size. Here, we found the opposite relationship, with 12s trading at a 0.6% discount to the smaller unit size.