Liv-Ex Market Report
by Liv-ex.com, September 2010
With the summer slowdown well and truly over, September saw trading continue to accelerate. Once again, the First Growths and their second wines saw unrelenting demand, with Mouton leading the former category and Pavillon Rouge the latter. Exchange turnover rose 37% on August and 21% year-on-year. On the back of energetic trade, all of the Liv-ex indices saw a strong move upwards in September. The Liv-ex Fine Wine 100 Index ended the month at a new high of 308.21, up 1.53% on the previous month, whilst the Fine Wine 50 hit 365.51. The index is up 3.15% month-on-month and 46.1% year-on-year. (See www.liv-ex.com for details or find the Liv-ex 100 on Bloomberg: see index code LIVX100.)
Pavillon Rouge, Forts de Latour and Carruades de Lafite dominate the top half of the table this month, roused once again by vortex-like demand for the second wines. On the downward slope, Lafite makes its second consecutive appearance, with the Parker-perfect 1996 vintage posting minor losses in September (and August). Despite fierce demand in the first half of the year, hesitant buying pushed prices back below the £12,000 mark, down from £12,250 in July. Outside Bordeaux, white and red Burgundy prices showed a little drift.
(analysed in detail in full report)
Last month, Stephen Tanzer of the International Wine Cellar published a host of tasting notes on 2008 and 2009 white Burgundy—two successful years that produced “markedly different styles of wine”. Tanzer tasted more than 400 of the region’s greatest offerings and awarded nine 2008s final in-bottle scores of 95 points and above. According to Tanzer, a warm, dry growing season in 2009 yielded a sizeable crop of healthy grapes, providing fleshy, fruit-driven wines that tend to lack the minerality of the 2008s and 2007s. “The less successful examples of 2009 struck me as blurry with alcohol and soft, with their lack of acidity giving them less definition and verve than the better wines from the two previous vintages.” Nonetheless, Tanzer clearly sees some potential in 2009, having assigned as many as 41 wines from the vintage a potential score of 95 points and above.
(more analysis in full report)
Following in the path set by Carruades de Lafite, the last 12 months have witnessed large price rises for almost all of the First Growths’ second wines. More than 30 wines from the 2000 vintage onwards have increased in price by 50% or more, with 14 wines seeing their prices double in just twelve months. The key driver here is undoubtedly increased Asian appetite for all things Frirst Growth. The reasons behind this have been debated at length in a variety of different media (including previous Liv-ex reports) so we will limit ourselves to saying that the second wine price upswing is a reaction to the strength of the First Growths’ brands. They are simply perceived to be the cheapest way to gain exposure to the grand vin. If we look back three years to September 2007—just before Carruades embarked on its vertiginous ascent—you could buy seven cases of the second wines for the same price as one case of the grand vin, on average. At the end of September 2010 this ratio had fallen to just above 4:1.
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