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.
