Bordeaux takes centre stage at LWF

Bordeaux – specifically its En Primeur system – will be put in the spotlight at this year’s London Wine Fair.  In its in augural year, The Tim Atkin Debate will take “The Future of Bordeaux En Primeur “as its topic for what promises to be one of the liveliest Industry Briefing sessions at the show this year. 

Tim Atkin MW, International Wine Challenge judge and award-winning wine writer, will chair a panel which includes: Olivier Bernard of the Union des Grand Crus de Bordeaux; Tom Hudson, director of Farr Vintners; Max Lalondrelle, fine wine buying director of Berry Bros & Rudd; Will Lyons, wine columnist for The Wall Street Journal; and Sophie Schyler Thierry of Margaux’s Château Kirwan.  The debate will focus on the sustainability of the En Primeur market and its relevance today.  It will take place on Monday, 2ndJune from 12.45 to 13.45 in the Industry Briefing theatre within the National Hall.  Seats will be available on a first come, first served basis.

The 2011 vintage will be the focus for both the Union des Grands Crus de Bordeaux and The Crus Bourgeois du Médoc this year. On Monday, 2nd June, The Union des Grands Crus de Bordeaux, which counts many of the most distinguished Bordeaux châteaux amongst its members, is returning to the London Wine Fair for the fourth year with a tasting of the 2011s. The tasting will take place from 11am to 4pm in the Apex Room. The Crus Bourgeois du Médoc will present the Official Selection 2011 that was published last September on Wednesday, 4June, also in the Apex Room.

The London Wine Fair is being held 2-4th June, Olympia.

Meanwhile, Bordeaux Index, a leading global fine wine merchant and trader, reports renewed optimism for the Fine Wine market, as Bordeaux sees a surge in trading stemming from both Asia and the US. Sales of top Bordeaux to Asia are up 30% on the same period 12 months ago (Nov 12 – Apr 13); November 2013 was the biggest sales month of LiveTrade wines in Asia since January 2012; 2014 has seen average sales of LiveTrade wines in Asia go over £1m per month for the first time since 2011; and sales of LiveTrade wines to the US for the first four months of 2014 are 17% higher than the combined total sales for 2012 and 2013.

Consecutive years of falling prices in the fine wine market since 2011 has resulted in a bear market, with some even suggesting that the fine wine investment game is over. However, the latest figures show that the ‘glass is actually half full’. Recent research by a team of academics (Cambridge Judge Business School, Vanderbilt University and HEC Paris) has shown annualised real returns of 4.1% on wine from 1900 to 2012 beat government bonds, fine art and stamps. Data from BI’s LiveTrade platform shows the immediate outlook is also improving.

Following soaring prices and disappointing en primeur campaigns, Bordeaux’s decline has been widely reported, with investors turning to Burgundy and the Super Tuscans to find value. But, with Bordeaux prices returning to a reasonable level, BI reports that the Bordeaux market has been revived, namely in Asia and the US.  In Asia, the engine room of the global wine trade for the last 7 years, sales of leading Bordeaux are proving positively robust - and after a hiatus of almost 10 years, BI is experiencing increased trade into the US. Bordeaux remains the cornerstone of any fine wine investment portfolio and the current prices have started to tempt American collectors and traders back into the Bordeaux market.

Commenting on this emerging trend, Managing Director of BI, Gary Boom says: “Given the sense of gloom that pervaded the fine wine market in Q1 2014, following months of declining prices, depressed China demand and the looming prospect of another disenchanting en primeur campaign, it was hardly surprising to see the aggregate price fall a further 3%. This represents the longest bear-run since the early 2000s, leaving our Bordeaux Index some 22% off the peaks of 2011.

“However, the latest data from our LiveTrade platform gives genuine hope that this long-suffering market is ready for a turnaround. Our data, coupled with sentiment from our clients, highlights a clear message that mature/maturing stock is where the main action is. We’re talking about the great vintages of the 1980s and 1990s that drinkers actually want to put on their tables today.  The First Growths in particular are just entering their drinking window and as such we are beginning to see the first, gentle effects of the inevitable availability squeeze.

“Secondly, there are a number of wines which look out of kilter in terms of their quality/price ratio. These include some younger wines from the 2000s, but specifically those which have come well down from their market peak and which are trading at 2009/2010 prices.”

“With Bordeaux prices in decline for 3 consecutive years, the first time this has happened since the 1970s, it was only a matter of time before the picture began to improve. As our data indicates, Bordeaux still has massive appeal to wine lovers and collectors across the global market; and it is this vital consumption versus storage ratio, turning strongly in the favour of consumption right now, which helps make Bordeaux the cornerstone of fine wine investment. Prices may take a little time to catch up but the essentials are in place for a rally. The high and consistent levels of trade conducted through our LiveTrade screen give us cause for more than a little cautious optimism.

“Key wines to watch include the greats which every collector must have – and whose prices have been dragged down by the overall market. These include La Mission Haut Brion 1989, Haut Brion 1990, Margaux 1990, Latour 1996 and Petrus 1998. Overall, within the next 12 months we expect to see prices turn and rediscover their previous form of gentle growth of 4-5% per year.”

30 May 2014 - Felicity Murray The Drinks Report, editor