Bordeaux: the recovery position

At the end of September, the Liv-ex 1000 index – the broadest measure of the market, tracking price movements of wines from a wide range of regions – hit a new high for the second month in a row. Bordeaux still has some way to go. Despite climbing 17.7% so far this year, the Bordeaux 500 index remains 6.5% below its peak level in July 2011.

The First Growths and their second wines remain far from the eye-watering heights that they reached in 2011, down 24.5% and 18% respectively. The Sauternes 50 has yet to show significant signs of recovery.

However, several of the sub-indices have fared better. While the broader market fell from summer 2011, the Right Bank 100 climbed and has now reached new highs on four consecutive months this year. The components of this index include popular brands such as Pavie and Angelus which have seen continued demand over this period.

The Left Bank 200 and Right Bank 50 are very close to peak levels currently. With the index levels for October due to be released next week, the market could see more new highs shortly.



Finding the heir to Parker’s throne


Despite Robert Parker’s recent retirement from reviewing Bordeaux, his scores continue to have a profound impact on price. With Parker’s influence likely to decline as time goes on, there has been considerable discussion around what or who will influence the market next. Will there be an heir to Parker’s throne, or will a system based on consensus or average scores emerge as the market’s new barometer of wine quality in Bordeaux?

As a preliminary exploration of this issue, Liv-ex has measured the correlation between individual critic scores and the prices of the last ten physical vintages of the Bordeaux First Growths. We tested a sample of four popular critics: Robert Parker, Neal Martin, James Suckling and Jean Marc Quarin.

The chart above shows how closely correlated the prices of these wines are with scores from the respective critics. The results suggest that Parker Points still enjoy the greatest correlation with price, although the other sampled critics are not far behind.

Naturally there are many factors influencing any market, and fine wine is no different. For example, brand, vintage quality and age are also likely to influence fine wine prices. In addition, there may be issues with the direction of causation in our analysis, with scores perhaps being influenced by prices – blind tastings apart – or being correlated with each other. It will be interesting to observe how the market eventually choses its successor to Parker Points.



Rhone releases: Beaucastel and Vieux Telegraphe 2015

Beaucastel 2015

Rhone 2015 wines are beginning to be offered pre-release by the international trade.

Beaucastel 2015 is available at £450 per 12×75. For UK buyers, this is an increase of 19% on the merchant release price of the 2014 vintage last year (£378) – a difference that can be partly accounted for by the current weakness of Sterling.

At this price, the 2015 is more expensive than the majority of other recent vintages currently available in the market.

Vieux Telegraphe 2015 is being offered at £390 per 12×75. It has not yet received a critic score, but its price pitches it alongside the 95-point 2005 that already has several years in bottle.

Early feedback from Rhone 2015 tastings suggest a strong vintage that might be on par with 2007 or 2012. A report by The Wine Advocate’s Jeb Dunnuck on the region is due to be released at the end of the week.

Vieux Telegraphe 2015


Talking Trade: 14th October – 20th October


The Liv-ex Fine Wine 50 rose 0.6% last week, closing Thursday at 329.58. Trade by value and volume were both higher and Bordeaux activity was solid at 70.3%. However, First Growth trade was lower at 18.5%, down from 27.5% last week. Lafite Rothschild was the most active, representing 25% of First Growth activity with Mouton Rothschild taking a 22% share.


It was another strong week for Champagne. Krug, Vintage Brut 2000 (AG 95) was in the top five wines traded by value and volume this week. The 1999, 2000, 2002 and 2006 vintages were the most active by value and volume. Salon, Mesnil 2002 (AG 96+), Moet & Chandon, Dom Perignon Luminous 2006, Moet & Chandon, Dom Perignon 1999 (AG 93) were all well represented.


Angelus 2010 (WA 99+) took the top spot this week by value. It traded at £2,875 per 12×75 just below last month’s record high of £2,900. It is available below its 99+ point 2009 sibling that last traded at £3,016.


Two Brunello 2010s featured amongst the top wines traded by volume – a highly regarded vintage, accessibly priced. Overnight, James Suckling published his top 100 wines of 2016. His third favourite was Renieri, Brunello di Montalcino Riserva, 2010. He awarded it 100 points.


Bordeaux 2014: movers and shakers

Yesterday the UK trade were treated to a tasting of Bordeaux 2014 at a UGC event in London. The early consensus is that 2014 is a “good” vintage, but that it is perhaps still not showing at its best.

The wines are yet to be released in bottle, but prices have already been rising. Top wines from the vintage are up 13.4% on average since release En Primeur – and many have made even steeper climbs.

The top risers are shown in the table below. Three second wines feature, with Petit Mouton 2014 taking the top spot. Its Grand Vin, Mouton Rothschild 2014, is the only First Growth among the top ten.


A number of wines have bucked the upward trend and are currently available below their release prices. Yquem 2014 – down 9.7% since its release last month – has fallen the most. This is despite favourable reviews: Neal Martin commented: “It’s not quite up there in the rarefied heights of say, the 2001 or 2009, but it is what we call in the trade, ‘the business’.”


The 2014s will become physically available over the next few months and will be fresh in the minds of the trade. This could be a vintage to watch closely.

This is an extended version of an update sent to Liv-ex members earlier today.

Pape Clement 2009 reaches new highs


Pape Clement 2009 hit an all-time high this week when it traded at £1,335 per 12×75. This is an increase of 64.8 % on its trade price of £810 at the beginning of 2016.

The wine was awarded a perfect 100-points by Robert Parker in a Hedonist’s Gazette article, published in April. It has since seen a flurry of activity and rising prices.

Despite this climb, the wine is still available at a 23.8% discount to the Chateau’s equally scored 2010 vintage which is currently commanding a Market Price of £1,720.


Second wines: closing the gap

First growths and second wines

Back in July 2007, it was possible to buy 6.6 bottles of second wines – more than a standard six pack – for every bottle of the Grand Vin on average. That number now stands at half – 3.3.

The chart above shows the relationship between prices of First Growths and their second wines going back to 2005. This relationship has seen a number of phases. In the first, through to the end of the summer of 2007, “traditional” fine wine buyers from the UK and Europe were leading the market. Prices for First Growths were rising, but the brand appeal didn’t trickle down to their second wines, and the price gaps between the two groups broadened.

The second phase was characterised by the increased significance of Asian buyers in the fine wine market. A series of regulatory changes culminated in the complete removal of duties and tariffs on wine in Hong Kong in February 2008 – a major catalyst for Asian investment in the sector.

At this time, Chinese brand buying began to push Bordeaux prices higher, with First Growths and their second wines in focus. As prices for Lafite Rothschild and its peers reached dizzying heights, the second wines increasingly looked more attractive as entry levels to these popular brands at much lower price points. As the chart below shows, by mid-2010 the second wines were skyrocketing. Between June 2009 and June 2011, the Liv-ex Fine Wine 50 index – representing price movements of the First Growths – increased by 101%. The Second Wines 50 index soared 183%. By December 2011, first wines were just 3.2 times higher than their second wines on average.

The third phase marked a period of market decline, but the price gap began to creep higher. Prices for both groups dipped – the second wines a little further as mainland China all but abandoned the market. The market bottomed in July 2014.

The Bordeaux market has recently seen another boost. Once again, the second wines of the Bordeaux First Growths have been among the top performers. The Second Wines 50 index has gained 28.5% year to date* compared to a 21.3% move for the Fine Wine 50. The broader Bordeaux 500 index is up 17.7% over the same period. Their strong showing has once again been linked to Asian brand buying which has become increasingly powerful with Sterling weakened.

The average price of a First Growth is now 3.3 times the average price of a second wine. As the first chart shows, this number is dropping – but for how long?

*end Dec 2015-end Sep 2016.

Liv-ex 100: Performance by currency


The Liv-ex Fine Wine 100 index – the industry benchmark which is calculated in Sterling – has seen strong upward momentum since November 2015, rising 18.8%.

As can be seen from the chart above, the index looks very different when viewed in other currencies. It has fallen in all currencies apart from Sterling.

Euro, Yen and Dollar-based buyers have been taking advantage of the favourable currency situation. As the chart and table (below) show, the fine wine market has fallen the most in  Yen year-to-date.


Sterling weakness has also benefitted the FTSE 100 equity index with companies receiving a boost when foreign earnings are converted into Sterling. Since the end of June, the FTSE 100 is up 6.1%. The Fine Wine 100 is up 8.3% over the same period.



Talking Trade: 7th October – 13th October


Market activity remains solid with trade by value up a tick on the previous week. The Liv-ex Fine Wine 50 rose 1.1%, closing Thursday at 327.68 – its highest level since April 2012. The market continues to receive a boost from a weaker Sterling which fell to a fresh 31-year low against the Dollar.


Bordeaux was particularly strong at 79.3% of trade by value. First Growths were more active and represented 27.5% of trade. Mouton Rothschild 2000 (WA 96+), Mouton Rothschild 2009 (WA 99) and Lafite Rothschild 2003 (WA 100) were in the top wines traded by value.

Burgundy and the ‘Others’ category were more active. Penfolds Grange saw good volume with a number of vintages trading on the Exchange. Burgundy saw DRC, Romanee Saint Vivant 2012 (WA 96), DRC, Richebourg 2012 (WA 97) and DRC, Romanee Saint Vivant 2012 (WA 96) trade this week.


Second wines were active again. Forts Latour 2009 (WA 94) was among the top wines traded by value and Pagodes Cos 2012 (WA 88) was the top wine traded by volume.



Liv-ex interview with Tim Atkin MW, part two

On Monday we published the first part of our interview with journalist, presenter, wine judge and photographer Tim Atkin MW.  In part one we discuss his career in the world of wine, wine writing and the changing role of the critic. In the second part, below, we discuss the wine industries of Bordeaux, Spain and South Africa.

Has the wine industry in Bordeaux and the style of wines produced changed throughout the course of your career?

The first Bordeaux vintage I wrote about was 1986. What I thought about Bordeaux then is still true today:  it’s the most interesting market in the world for wine. It produces comparatively large volumes of fine wines that are talked about and traded. Added to that, you’ve got vintage variation, you’ve got consultants, you’ve got diversity of style. I think Bordeaux is an amazing region and some of its best wines are among the greatest I’ve ever drunk. Primarily, though, what interests me is the way it’s marketed, sold and commoditised. As a journalist, I find that really interesting.

Having said that, I think that there was a stylistic line in the sand with the 1982 vintage. This was the vintage upon which Parker built his reputation and also the start of the rise and rise of Michel Rolland. I think that together they changed the way most wines are made in Bordeaux. They would defend their position and say that they like the style of wines that they have promoted, and there is nothing wrong with that. But I sometimes miss the older, fresher style of Bordeaux that needed a couple of decades or more in bottle to show at its best.

So where is Bordeaux at the moment in terms of style and place in the market?

Recently there has been a bit of a reaction to the style that Parker seems to prefer. We are slowly moving back to wines that are slightly fresher, and that I think have better balance.

The world of fine wine has diversified so much that you can find fine wine almost anywhere these days: the playing field is broader and flatter. Bordeaux used to dominate the scene like some enormous Himalayan mountain range. Most people thought that all the world’s greatest wines came from Bordeaux, with a few from Burgundy, Champagne, the Douro Valley, the Mosel and Barolo. I don’t think that’s true anymore.

En Primeur has become a system that consumers have lost a bit of love for because they got stung with the 2009s and 2010s. I also think that in a world of Amazon Prime, Twitter and immediate news, waiting 18 months for a case of wine to arrive is a bit passé. And if the wine has decreased in value, people are right to ask themselves if they’re being ripped off.

There has been a lot of discussion about Bordeaux’s lack of appeal to millennials. Do you see this as an issue for the region?

I have a lot of Bordeaux in storage, but there’s very little in my cellar at home – it’s just not something that I drink much of these days. I’m not a millennial, obviously, but I don’t think I’m atypical in that consumers – even in my generation – are just not drinking Bordeaux as much. People who are in their 30s are drinking even less Bordeaux. And people who are drinking wine in their 20s are drinking almost no Bordeaux. I think that’s a real worry for the Bordelais and I don’t think they’ve seen the car crash coming.

Yes, the top 50 properties are always going to sell their wines because they are in demand and they are very good – they are luxury goods. But they are like a hot air balloon that’s drifted away from the mooring of Bordeaux itself and they are just looking down at this thing from a few thousand feet and chucking the occasional sand bag out at the peasants down below. It’s not a unified region and it’s hard to see how the region will function economically in the long term. They probably need to pull out some vineyards.

Are any Bordeaux wines undervalued?

Bordeaux is so diverse that it is difficult to generalise – but that’s what makes it fascinating. I think that the sweet wines are very undervalued, as are the dry whites. There are even Crus Classés that are undervalued, Grand Puy Lacoste and Rauzan-Ségla being good examples.

Do you have a favourite Bordeaux vintage?

Easy. 2010. I love 2010 everywhere. I think the idea that 2009 was as good as 2010 is laughable. Some of the 2009s have already started to seem a bit pruney and overripe, although it was obviously a very good vintage for some châteaux. For me, 2010 is the great vintage of the last 15 years – in Bordeaux, Burgundy, Montalcino and Rioja… It is just a fantastic European vintage. The last time that you had a vintage like that – that was good almost everywhere – was 1990.

You wrote that “a greater focus on terroir is essential in Spain”. What are the key problems facing the Spanish wine industry?

Spain’s biggest problem is that it is the biggest bulk wine supplier in the world, with an average price of just over a Euro per litre. Spain produces a lot of cheap wine and has to shift it as effectively as possible. It all comes down to economies of scale. And subsidies.

By and large, Spain is not perceived as a fine wine producing area. But that’s just so wrong. There are a lot of amazing wines in Spain at the moment, and not just from classic regions like Rioja, Ribera, Priorat and Jerez. Just look at what’s happening in Ribeira Sacra, Bierzo, Empordà, Tenerife, Mallorca and Manchuela, to take only a few examples.

Why are those not expressed as terroir wines?

I think they do express their terroir, but sometimes the people who produce them are not allowed to identify specific vineyard parcels or their villages on labels. It’s a real problem for Spain. A lot of the Consejos, who administer the DOs, or appellations, are run by politicians, cooperatives and large companies whose primary interest is to flog as much booze as effectively as possible, often at cheap prices. It’s is not really in their interests to promote the fact that many of the best wines tend to come from specific vineyards.

And why is this important?

I think that the current approach is short sighted. If Spain had a better fine wine image it would help to improve the whole country’s wine industry, making it easier to sell the best Spanish wines at higher prices. It is crazy that you can buy Valenciso Rioja Reserva 2009, which is an amazing wine, for £17, when that wine should cost £40 if you were comparing it with the rest of the world.

But I think that Spain is starting to rectify its image problem. The younger generation is starting to go back to the land – a lot of them have taken their parents’ vineyards out of co-operatives. And the power of the big merchants who buy bulk wine, and of the co-operatives – although there are some good ones – is waning.

You’ve recently published a lengthy report on South Africa. What is exciting you most about the country’s wine industry?

I think that South Africa is the most exciting wine producing country in the world at the moment – and there are unbelievable bargains. It is a little bit like Spain in one sense, where there’s a lot of bulk wine and grape prices are depressed. Having said that, there is this amazing generation of young winemakers that has emerged since the first democratic elections in 1994. The winemakers in South Africa in their late 20s or 30s are just an unbelievably talented group. And the good thing about grapes being so cheap is that anybody can create a winery. I like the dynamism and the creativity of that. I think that South Africa is a place to watch.

What are the challenges facing the wine trade in South Africa?

One of them is that the price of grapes is too cheap. Farmers are realists. The first vines that they pull out are the ones that yield least – and they tend to be the oldest vines. That’s what happened in Spain, too, where plantings of Garnacha have suffered.

It is a great shame that the bulk areas are a lot more profitable than those producing fine wine. It is tempting for grape growers to go somewhere where they can irrigate, and prune and pick their vines mechanically.

It also goes back to this issue that that people think that fine wines can only come from a narrow band of regions and countries. South Africa and Spain both have image problems, though I think that is changing. I hope that over the next fifty years the perception of what constitutes fine wine will become much more diverse and that both countries will benefit.

Which other regions do you feel have improved the most over the last decade? Which have the most potential?

Argentina still has masses of potential. So has Italy. We tend to focus on Tuscany and Piemonte but I think there are many great wines being made in Italy. Sicily still has enormous promise, as does Basilicata on its volcanic soils. Parts of the Abruzzo are amazing; parts of the Friuli area are incredible. I think Italy is an amazing country.

I also keep thinking that the Languedoc’s day is going to come – the wine just keeps getting better and better. Again, they just don’t achieve the prices that I think they deserve. This is great for consumers, but less good for the people making the wines.

Do you think these regions need the support of the critics?

Yes, and I think this is where critics can be useful. Parker, in his pomp, was capable single-handily of doing that – and sometimes he got the right answer. Now it is much harder. There is this guy in South Africa called Chris Alheit who Neal Martin and I both like very much. Both of us gave his initial releases very high scores. I am not saying that he succeeded because of that, but I think it helped.

I can almost have a bigger influence in a country like that, where I am one of only a handful of critics who are seriously reviewing the wines, than I can in Bordeaux where nobody is going to go, “Oh wow, Tim Atkin has given it 100 points. I am going to buy 1,000 cases”. The further you are from the epicentre of the fine wine world, the easier it is to have an influence.

Do you have any favourite emerging winemakers?

Roberto Oliván of Tentenublo in Rioja is pretty special, as is Sebastian Zuccardi in Argentina. And there’s a ludicrously young winemaker in South Africa called Reenen Borman at Boschkloof who is already a star. His Epilogue Syrah is the best South African red wine I’ve ever tasted. This kid is 28 and he is off the charts brilliant.

What would you consider your greatest achievement to be so far?

To go on making a reasonably good living out of something that is basically my passion, and continuing to live like a student in some ways. I am also proud of some of the writing I’ve done. I think I’ve written in an entertaining and approachable way about wine, and, I hope, got some people into wine.

How do you see the wine industry changing in the next ten or twenty years?

I think it’s very hard to say. The one thing that people underestimate is climate change, which is the single biggest thing we face if it continues to accelerate at the current rate. I think that some fine wine regions won’t be growing the grapes that they are growing now, certainly in twenty years and maybe even in ten years. Access to water in drier areas is going to be crucial.

I reckon the influence of Bordeaux will continue to decline, personally. This is partly because of the younger generation. The people coming online are going to want to drink different things. So we’ll see more diversity, probably different regions, and maybe the existing regions will grow different things or be forced to do so because of different, hotter temperatures.

What’s your next project?

I haven’t written a book in a very long time because I have wanted to wait and write book about something I am passionate about. However, yesterday somebody came up with an idea for a book and I thought, “that’s a great idea”, so I think I may finally do it. It’s the kind of wine book that isn’t a specialist monograph on one region, however important those are. It’s the kind of book that I would want to see people reading on the tube. So it would use all of my experience about wine but would do it in a sort of way that I would hope is entertaining, and journalistic really – treating wine as a subject that is worthy of enquiry.

To read the first part of our interview with Tim, please click here.