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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, October 2009

Trading
The strong trading activity we have seen in the second-half of 2009 continued through October, with exchange turnover up 5% on last year. For the first time since early summer, Lafite Rothschild was forced to share the limelight, with its near-neighbour Mouton Rothschild supplanting it as the most traded brand on the exchange. A welcome sign that the hitherto Lafite-driven market growth is now developing a broader base. The Liv-ex 100 Fine Wine Index’s run of good results also continued, finishing the month up 1.9% at 234.3; the seventh monthly rise in a row. The index is now up an impressive 14.3% year to date and 9.5% year on year. Indeed, all the major Liv-ex indices are now showing annual growth (see the Key Data box, left) although they remain between 10-12% below their high water marks. (See www.liv-ex.com for details or find the Liv-ex 100 on Bloomberg: see index code LIVX100.)

Trading in October was unusually eclectic, with almost all regions seeing demand. Good availability of DRC meant Burgundy broke into double figures for the first time since 2005, while the Rhone benefited from the hype surrounding the release of the 2007s, and Italy the 2006s. Only Champagne remained in the doldrums. In contrast, Bordeaux trading (which fell to under 85% of turnover for the second time this year) was concentrated on just two vintages, with the 2005s (30%) and 2008s (16%) dominating.


(more analysis in the full report)

Major Movers
Mouton heads the major movers board for the first time in 2009, reflecting the rise in demand we have seen for the brand in recent months. Lafite seems unwilling to completely relinquish its hold on the major movers board, however, with the 2005 vintage continuing to perform well. Festive buying sees two mature Sauternes come to the fore. It would seem the stickies are finding more favour this Christmas than fizz, with Cristal (et al.) still failing to find much-needed momentum. Meanwhile, is the fall in price for Carruades 2000 simply a pause for breath, or is its seemingly relentless price climb now loosing impetus?


(analysed in detail in full report)

Critical Corner: Robert Parker on the Southern Rhone in 2007
Robert Parker’s scores for the 2007 southern Rhone arrived at the end of October, providing us with a surfeit of superlatives and ten 100-point scores. Described by Parker as the “most compelling vintage of any viticultural region I have ever tasted”, no previous Wine Advocate report has featured so many maximum scores. Only 2000 Bordeaux (with nine) and 2001 California (with eight) come close. Indeed, the southern Rhone has more 100-point wines in 2007 than Italy and Spain have had in their history, combined. The vintage is described as superb across all price levels – “I have never tasted better Côtes du Rhônes, Gigondas, or sumptuous, rich, complex Vacqueyras” – but it was the southern Rhone’s premier wine region, Chateuneuf du Pape (CNDP), that garnered most interest. “Profoundly concentrated, vividly aromatic, and remarkably fresh, yet substantial, fullbodied, and flawless,” the 2007 CNDPs are apparently the product of a year when the days were hot, the nights were cold, the mistral blew and it barely rained. The issue for trade and collectors alike is that many of these wines (particularly the tiny-production tete-de-cuvees) are extremely hard to find on the secondary market – of the top 15 wines by score, only Clos Papes has a production of more than 5,000 cases. Those who missed out on the 2007s probably won’t have to wait too long to get their hands on top-quality CNDP, however. As Parker states in at the end of his report: “At the time of writing, 2009 was looking fantastic.” Below are the top 12 wines (all those that scored 99 and above). As the table shows, all the wines surpassed or matched their previous best (PB) score, something we see repeated throughout the report.


Final thought — the Rhone in focus
The Rhone Valley has been enjoying quite a run. No other major wine region has been blessed with quite so many exceptional vintages in succession. From 1998 onwards, only 2002 and (potentially) 2008 can be considered lesser years. Furthermore, Robert Parker clearly favours the region above all others. Of the 139 100-point scores he has awarded to French wines, 70 are from the Rhone, as opposed to 55 from Bordeaux. Over the last ten years, the Rhone has 46 ‘perfect’ wines, as opposed to just 17 from Bordeaux. Those wines that have found most favour, however, are almost exclusively limited-production wines from single vineyards (such as Guigal Cote Rotie Mouline) or ‘tete-de-cuvee’ selections of the very best grapes (such as the wines highlighted in the table above). A very different situation from Bordeaux, where 100-point wines are often available in quantities of up to a quarter of a million bottles. This lack of liquidity is apparent when you look at the trading figures. In 2009 the Rhone has accounted for only 1.2% of total Liv-ex exchange trade, while in the auction market it constitutes just 2.5% of sales. Furthermore, trade is dominated by just a few brands. The three Guigal single-vineyard Cote Roties (Landonne, Turque and Mouline) together with Beaucastel and Clos Papes, constitute 77% of Rhone trade on the exchange. Similarly, in the auction market the Guigal single-vineyard wines account for 35% of Rhone sales alone. With such high scores, limited production and high consumption rates (most Rhone is drunk far younger than its Bordeaux equivalents) it would appear the conditions for secondary market price appreciation are in place – particularly for the Parker point-laden super-cuvees.
(analysed in detail in full report)


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