Vin-X Fine Wine Investment | Expert Advice for Fine Wine Investors
Vin-X is recognised as a market-leading specialist broker of fine wine, offering a bespoke portfolio management service to investors. Our goal is to maximise investment potential by ensuring access to the most promising Bordeaux vintages available, and providing essential information to monitor the performance of their investment over time.
The Vin-X Fine Wine Tax Report set outs the tax advantages of fine wine – which reliefs are available and what to be aware of.
Peter Owen, of Gatwick Enterprise Tax Services, provides a professional overview on the tax treatment of fine wine by HM Revenue & Customs in Vin-X’s Fine Wine Tax Report. This concise and easy to consume summary, provides a general overview which considers HMRC’s current focus on tax avoidance and the impact of the Revenue’s application of the new Corporate Criminal Offence Legislation. With this in mind he provides a reminder of the application of the Revenue’s Wasting Assets and Chattels exemptions with regard to Capital Gains Tax.
Brexit is also commented on in the Report and potential implications in terms of tax and economic growth.
Of particular importance, the Report looks at fine wine’s exposure to Capital Gains, Income and Inheritance Taxes and what tax benefits are available. Additional reliefs are also offered by investing in Enterprise Investment Scheme qualifying companies (EIS and SEIS) which trade in wine and he points to these too.
Peter summarises that “With care, a well-managed portfolio of fine wines can attract valuable Capital Gains Tax reliefs” but also cautions that “investors should be careful not to be deemed to be trading” and in so doing triggering an income tax obligation, he explains this point further in the Vin-X Report.
Given the tax benefits that can be enjoyed with fine wine, we remind you that we have a limited availability of probably the most exciting wine of the newly released 2017 Bordeaux en primeurs. Chateau Pavie is one of the top wines of the vintage and the Vin-X price is currently the best in the market, strongly positioning this allocation for future growth.
Finally, the First Growths’ 2017 releases hit the market with Mouton Rothschild out of the starting blocks at a 17% discount to 2016, but also with a reduction in the volume released.
One of the most highly rated First Growths of the vintage, Mouton’s initial release price was at €348 per bottle ex-negociant and with 15% less supply than the previous year’s. This reduction in first release en primeur supply is noted as a strategic position as opposed to a response to the frost damage in 2017, which the famous estate avoided entirely.
Mouton Rothschild 2017 was rated by Neal Martin at 94 – 96 and James Suckling scored it 97 – 98 points. Martin claims it to be “unashamedly classic” though lacking some of the panache of its 2016 stablemate. Liv-ex merchant members voted Mouton 2017 as their 6th favourite wine of the vintage in terms of their average scores and Lafite and Mouton seem to be contesting the market’s First Growth top quality ratings, the price strategy will determine which is the campaign leader of its class.
The great estate’s second wine, Petit Mouton also released at a 40% volume reduction on 2016 but at a premium, up 9.1% on last year’s price. Petit Mouton, like Lafite’s second label Carruades, has enjoyed buoyant times over the last year, prices up 24.5% thus, even though the 2017 is its highest ever release price, it is still currently the cheapest vintage on Liv-ex, with the next best buy price being the 2016 vintage at an additional 10 %.
Pontet Canet and Leoville Las Cases both released at circa 20% discounts to their 2016 offerings. Pontet was particularly highly scored by Wine Advocate’s Lisa Perotti-Brown MW at 96 – 98, whilst Galloni rates the Pauillac estate’s 2017 wine at 93 – 95. The 26% discount on 2016 is felt to be a significant step to engage the market.
Strategically, the chateaux appear to be recognising the need to make some concession on price for the vintage compared to secondary market prices for prime back vintages – but will it be enough? Furthermore, how much wine is being held back for better times? With the back drop of unusual geopolitical activity and economic uncertainty, ‘safe assets’ like fine wine may well see significant demand in the 12 months which the chateau may also wish to benefit from.
This is only the start of the key wine releases for investors, further First Growth and Right Bank Classe A’s expected imminently. For more information call us now on 0203 384 2262
In a recent interview with Liv-ex Antonio Galloni shares his views on the 2017 vintage; “For me 2017 is very clearly a Right Bank vintage…. It’s not a great vintage across the board – it’s just a very good vintage with some highlights – and because of this, I think people are very afraid to take a view that is outside of the consensus. It’s too risky.”
When asked his top picks Galloni lists Ausone, Petrus, Troplong Mondot, Lafleur and Vieux Chateau Certan claiming that ‘These wines are all amazing.” He points to the benefits enjoyed by those vineyards positioned in the plateaus and upper hillsides of Bordeaux, which, as a consequence, managed to avoid last year’s frosts. “Mother Mature made a sort of ‘natural selection’ that resulted in thrilling wines.” Galloni draws out Chateau Pavie, Troplong Mondot. L’If and Belaiar Monange as ‘really intriguing’ and he really wants to see “where they go”.
Of the Left Bank wines, he highlights Lafite, Las Cases and Les Carmes Haut Brion but claims that the Right Bank is much more exciting.
In terms of the En Primeur system and pricing of the 2017 vintage, Galloni comments that “vintages don’t live in isolation, they live in context. We’ve just had two very srong vintages – 2015 and 2016 – and we have a currency situation that is not particularly favourable. All of that suggests that for 2017s to really move they have to be priced attractively.”
This stance supports our view completely – 2017 is a vintage to approach carefully. We have a few key targets but price is key.
CONTACT US NOW FOR FURTHER INFORMATION on 0203 384 2262.
The general industry opinion is that 2017 is a varied vintage, with none of the top critics awarding the perfect 100 points. Neal Martin’s highest score awarded was 97 points, scores over that are very rare. Overall, Martin rates the vintage as “good to very good” but not in the same league as 2015 or ’16 and he likens it more to the mid-vintage 2014.
His top 2017 wines all scored 95 – 97 points and are noted as Lafleur, which he describes as “an awesome 2017”, Lafite Rothschild – “classic from start to finish” and Eglise Clinet. White wines have performed relatively well and Sauternes’ Yquem and Doisy-Daene have received equal top scores of 95 – 97 points.
Martin comments on the market’s view of the vintage, and states that the Bordeaux 2017 en primeur campaign success will ride on the pricing strategies on release, those wines priced to sell through to the end consumer will be the vintage winners.
James Suckling has categorised 2017 as an average, ‘Mid-Quality’ vintage, stating that the “top wines of the vintage should add to the reputation of this unique year”. Yquem and Latour stand out as his top two wines, both awarded 98-99 points. He describes First Growth Chateau Latour as “Superb. Classic great Bordeaux. Wow.” But as Latour exited the en primeur system six years ago we won’t expect to see Latour 2017 hit the market for a number of years.
Yquem stable mate, Chateau Cheval Blanc, also owned by LVMH, was scored at 97 – 98 and was the only St Emilion Grand Cru Classe A to be rated this highly by him. St Emilion was also particularly hard hit by the frosts in 2017.
Antonio Galloni, founder of Vinous.com acknowledges in his critique that the effects of the frosts last Spring were “clearly severe and debilitating for a number of estates”. His over-riding view on the vintage is that “2017 is, in my opinion, very clearly a Right Bank vintage” and the best of St Emilion and Pomerol “are positively thrilling” listing seven of the top ten wines of the vintage from these two appellations.
Galloni’s Left Bank favourites include Haut Brion, Leoville Las Cases and Montrose, all of which are “more sensual than they usually are at this stage” but he states that the Left Bank does not possess too many “ extraordinary or absolute must haves” this vintage.
The Liv-ex member merchants voted on their top five wines of 2017 as Petrus, Vieux Chateau Certan, Margaux, Latour and Lafleur with 14% of those surveyed claiming Petrus as wine of the vintage. Overall they rated the vintage as a whole “better than expected” given the frost damage. The survey also showed that merchants expect overall euro release prices to be on average 11.5% lower than the 2016 vintage release, with less demand for 2017.
INVESTING IN BORDEAUX EN PRIMEURS
Fundamentally, buying wine ‘en primeur’ is akin to investing in futures. The rationale being that an allocation of fine wine bought 2 to 3 years before it becomes physically available in the market should mean that the wine is bought at the cheapest possible price. Historically, this was very much the case, however the pricing strategies of vintage releases, particularly since the 2010 vintage came to market in Spring 2011, delivered a series of negative returns. In-bottle release prices, on average, ended up being cheaper than the original en primeur prices. As a consequence the market came to expect a better rate of return from acquiring wines already in the secondary market rather than buying at first release.
The system really woke up to this in 2014 and more recent campaigns of the 2015 and ’16 vintages have seen some redress by the Chateaux and the Bordeaux negociants. Returns from these more recent campaigns have been mostly positive and some confidence is returning to the system.
Being strategically selective with En Primeurs is the key to picking ‘winning futures’. Looking at the 2015 vintage performance, the latest to be physically released into the market last year, the average return was 11%, however individual wine performance (in the Bordeaux 500 range) varied between -17% to 162%.
The chateaux themselves are also reviewing their En Primeur quantity release strategy. Chateau Latour took the unprecedented step of removing their entire production from the Bordeaux en primeur system in 2012, with 2011 the last vintage released en primeur. The First Growth Chateau released 4,000 cases of its 2006 vintage onto the market in April this year, representing 40% of normal annual production, at a premium of about 16% to cases already on the secondary market.
Other chateaux are now reducing their initial release volume of En Primeur wine with the aim of securing higher vintage returns and, given the significantly reduced supply of the 2017 vintage, we may see this strategy being adopted further this year.
It’s also worth noting that there is generally a marked difference between the opening prices of ‘Prime’ and ‘Off vintages. For example, the average release prices of ‘Off’ vintages 2007 and 2013 were less than half the price of the ‘On’ vintages 2009 and 2010. 2017 has been scored as a ‘Mid’ quality vintage, most closely comparable to 2014, however its average vintage score is slightly lower.
In terms of identifying those wines that offer the most potential for strong returns we are looking at the correlation between quality scores and prices of the new releases compared to back vintages on the secondary market.
The 2017 releases are now coming through on a daily basis, the key ones of interest to us so far are:
Chateau Palmer – first off the starting blocks with a discount to its 2016 release price.
Beychevelle – priced it right with its first release, at 4% discount on 2016 and the lowest Beychevelle vintage on the market, it reportedly sold out instantly.
Lafleur 2017 – rated one of the top wines of the vintage, (Lisa Perotti-Brown scoring it 97 – 100 points, Neal Martin 95 – 97 points and Galloni claiming it to be “without question one of the wines of the vintage on the Right Bank”) released at 3.5% above its 2016 price.
Carruades Lafite 2017 released at around £1,650 a case London prices, which is very good, BUT allocations from Bordeaux WILL be tied to Rieussec by negociants and potentially to other wines within the Lafite stable, which may make the maths less attractive.
Lynch Bages 2017, down 21% on 2016, more costly than the 2014 with which it shares a score, but a reasonably priced release.
Interestingly Stephanie de Bouard-Rivoal, CEO of Chateau Angelus, has publicly stated that they are reviewing their global supply chain with a resolve to tighten up its global distribution to make it more efficient. The St Emilion Grand Cru Classe A estate intends to hold back 40 to 50 per cent of its 2017 production.
The market generally has had a muted appetite for 2017 so far, which as a result has ‘upped the ante’ on the secondary market for back vintages. Very few 2017 wines first releases have sold out, there is a huge gap between the price buyers are prepared to pay and the chateaux’ expectations on sales’ prices, which currently stand at a premium to the 2014 benchmark vintage prices.
Meanwhile, the trade has just returned from Vinexpo Hong Kong where buoyant sales has probably left coffers light for En Primeur purchases unless they are priced just right.
At the end of May 2018, the Liv-ex100 was at a 6 months’ high and the Liv-ex 500 at an all-time high. Liv-ex comments that these conditions may also add to the chateaux’s current resolve to hold back supply for better margins later.
We are monitoring the releases as they happen and will provide you with details of those we feel offer the best opportunity for growth. For more information, read our latest Fine Wine Investment Market Report
Vin-X recently hosted David Gower at Chateau Pavie in St Emilion where the latest vintage offering was tasted alongside 100 point greats.
One of St Emilion’s top four Classe A wines, Chateau Pavie enjoys an enviable reputation and probably the best terroir of the region. The significant investment made into the estate by owners, Gerard and Chantal Perse, is now reaping rewards and they have their focus firmly set on achieving similar brand profile and valuations for their wines as the original St Emilion class leaders; Ausone and Cheval Blanc.
Chateau Pavie consistently achieves high quality scores year on year and prices for this powerhouse Right Bank wine have risen significantly since its reclassification in 2012 to join Cheval Blanc and Ausone in the St Emilion top tier with Chateau Angelus.
With the latest vintage release, Chateau Pavie has clearly produced one of the best wines of 2017 with an average critics’ score rated only one point behind First Growth Latour’s, which achieved the highest average 2017 vintage score of 98 – 99.
Vin-X’s Bordeaux-based Director, Renaud Ruer, recently organised a wine tasting at Chateau Pavie for a small party including former England Cricketer and Sky commentator David Gower, who is also well-known for his love of wine. The Chateau Pavie team, led by Philippe Develay created a fabulous experience including tour of the superb Chateau and extraordinary vineyard. Wines tasted included Pavie 2000. 2005, 2010, 2015 and the latest vintage – 2017, a truly outstanding experience. Lunch at the Michelin starred Hostellerie La Plaisance in St Emilion town, also owned by Gerard and Chantal Perse, owners of Chateau Pavie, completed the perfect Bordeaux visit. For more information on Vin-X events and wine tastings in Bordeaux please contact us on 0203 384 2261.
Our latest Market Report provides a summary of the key critics’ view of the 2017 vintage, which has overall been graded as a Mid-Vintage in terms of quality. In general they liken 2017 in quality as most similar to 2014, a ‘mixed bag’ of a vintage with some very good highly scored wines but no 100 pointers. The report also reviews the Bordeaux en primeur system as it currently stands and updates on current market trends and performance compared to financial markets and gold.
SECURE YOUR ALLOCATION OF CHATEAU PAVIE 2017 NOW:
Chateau Pavie 2017 provides the perfect opportunity to enhance your fine wine portfolio with a well scored Mid Vintage wine with excellent credentials, or start a vertical with this top Right Bank wine.
For further information: DOWNLOAD OUR BUY RECOMMENDATION: CHATEAU PAVIE 2017 – for more information.
CALL US NOW ON 0203 384 2262 TO REGISTER YOUR INTEREST
Probably the most iconic Californian Cult Wine, Screaming Eagle is rarely available outside the USA. With an average annual production estimated at 575 cases, the Napa Valley estate’s wines are consistently highly scored and prices achieved are often on a par with top Burgundies.
A Parker favourited, eight Screaming Eagle vintages have previously received scores over 98 points by The Wine Advocate and Lisa Perotti-Brown MW has rated the newly released 2015 vintage the perfect 100 point score.
The key Californian investment-grade wines include Dominus, Opus 1, Scarecrow and Harlan Estates, but Screaming Eagle is probably the most iconic. Diversifying a fine wine portfolio with top fine wines from this region will strengthen performance and de-risk any regional influences. Liv-ex reported a recent growth in market share of the top traded Californian wines, up to 7.7% in April 2018, this led by the release of Screaming Eagle 2015.
The growth potential of such a rare, top quality fine wine is very significant. A highlight example of the values achievable is the sale of a 6-litre bottle of the Screaming Eagle Cabernet 1992 for US$500,000 at the Napa Valley auction in 2,000. This was the pivotal vintage first awarded 100 points by Robert Parker which launched the estate onto the world stage.
We are delighted to have an extremely rare, limited allocation, of Screaming Eagle 2015 available to purchase now.For more information please see our Buy Recommendation
CONTACT US NOW TO SECURE YOUR WINE ON 0203 384 2262
Finally, Vinous.com publishes the last key scores of the 2017 en primeur tastings from Antonio Galloni and Parker’s previously dubbed successor, Neal Martin.
Antonio Galloni declares that “2017 is, in my opinion, very clearly a Right Bank vintage” and the best of St Emilion and Pomerol “are positively thrilling” listing seven of the top ten wines of the vintage from these two appellations. St Emilion’s ‘blue blood’ Grand Cru Classe A Chateau Ausone is joined by its neighbour, and rising star, Chateau Troplong Mondot as two of the region’s top wines.
His Left Bank favourites include Haut Brion, Leoville Las Cases and Montrose, all of which are “more sensual than they usually are at this stage” but he states that the Left Bank does not possess too many “ extraordinary or absolute must haves” this vintage.
Galloni’s top ten 2017 wines: Ausone, Canon, Lafleur, L’If, Petrus, Troplong Mondot, Vieux Chateau-Certan, Lafite, Leoville Las Cases and Pape Clement.
Neal Martin Overall Martin rates the vintage as “good to very good” but not in the same league as 2015 or ’16 and likens it more to the mid-vintage 2014. His top wines of the vintage all scored 95 – 97 points and are noted as Lafleur which he declares “an awesome 2017”, Lafite Rothschild – “classic from start to finish” and Eglise Clinet, which means that none of the key critics have ranked a 2017 wine the perfect 100 points at this stage. White wines have performed relatively well and Sauternes’ Yquem and Doisy-Daene has received equal top scores of 95 – 97 points.
In terms of the market’s view of the vintage, Martin states that the 2017 campaign success will ride on the pricing strategies on release and those wines priced to sell through to the end consumer will be the vintage winners.
Neal Martin’s top Bordeaux 2017 wines (en primeur):
Lafite Rothschild 95 – 97
Eglise Clinet 95 – 97
Lafleur 95 – 97
Yquem 95 – 97
Doisy-Daene 95 – 97
Angelus 94 – 96
Ausone 94 – 96
Belair Monange 94 – 96
Cos d’Estournel 94 – 96
Haut Brion 94 – 96
Hosanna 94 – 96
Latour 94 – 96
Montrose 94 – 96
Mouton Rothschild 94 – 96
Petrus 94 – 96
Vieux Chateau Certan 94 – 96
Suduiraut 94 – 96
Fargues 94 – 96
Rayne Vignaud 94 – 96
Haut Brion Blanc 94 – 96
Coutet 94 – 96
For more information on Bordeaux 2017 En Primeur contact us now on 0203 384 2262
The end of April sees the remaining key critics’ reviews of the 2017 vintage hit the trade press and Liv-ex has published the opinions of the exchange’s trade members on the in-barrel tastings of what many are referring to as a ‘heterogenous’ year for Bordeaux.
The critical view:
Suckling was the first critic of note to publish his in-bottle scores, and recognised as normally being quite generous, he rated none of the latest crop as having sufficient quality to award the perfect 100 point score:
James Suckling Top 2017 Wines En Primeur:
Yquem 98 – 99
Latour 98 – 99
Cheval Blanc 97 – 98
Cos d’Estournel 97 – 98
Lafite Rothschild 97 – 98
Lafleur 97 – 98
Margaux 97 – 98
Mouton Rothschild 97 – 98
Palmer 97 – 98
Petrus 97 – 98
Jeff Leve noted that, in his view, “Pauillac showed the best this year … at the top end some of the wines [of the Left Bank commune] are not far off the extremely high level of quality found in the 2016, 2015, 2010 and 2009 vintages.” His top wines of the vintage were Mouton Rothschild and Right Bank icon, Petrus. He went on to comment that “the success of the 2017 Bordeaux campaign will come down to the prices being asked for the wines.”
Jeff Leve Top 2017 Wines En Primeur:
Mouton Rothschild 98 – 100
Petrus 98 – 100
Latour 97 – 99
Lafleur 97 – 99
Ausone 97 – 99
Montrose 97 – 99
Angelus 96 – 98
Cheval Blanc 96 – 98
Haut Brion 96 – 98
Margaux 96 – 98
The Wine Advocate’s Editor-in-Chief and Bordeaux expert, Lisa Perroti-Brown MW, states that “2017 is not nearly consistently great as 2015 or 2016 but this vintage did produce some extraordinary wines.” Again she points to the fact that the best wines are coming from the top Bordeaux brands, and goes so far as to say that some wines from the lower end of the market are “pretty dire”. Interestingly, she joins a number of critics who have recognised good performances from the dry whites of the region.
Lisa Perotti-Brown MWTop 2017 Wines En Primeur:
Cos d’Estournel 97 – 100
Haut Brion Blanc 97 – 100
Ausone 97 – 99
Lafite Rothschild 97 – 99
Latour 97 – 99
Mouton Rothschild 97 – 99
Pavie 97 – 99
Montrose 96 – 99
L’Eglise-Clinet 96 – 98+
La Mondotte 96 – 98+
Liv-ex Members Survey findings:
Liv-ex members ranked the best wines of the vintage at this stage with an even split between Right and Left Bank wines, with the obvious top brands currently scored as the leading wines of the vintage including Ausone, Cheval Blanc, Lafleur, Margaux, Petrus, and Vieux Chateau Certan. Right Bank Petrus has been ranked the overall wine of the vintage.
Overall, the 2017 vintage was rated an average 92.6 points (out of 100) ranking it a Mid-vintage just above 2014, a little ahead of 2008, 2011 and 2012, significantly better than 2007 and ’13, but a long way off the top Prime vintages of 2005, 2009, 2010, 2015 and 2016.
The Liv-ex Members Top Wines of 2017 En Primeur:
Vieux Chateau Certan
The trade view is currently leaning towards lower demand for the 2017 vintage in light of its more complicated ‘sell’, no doubt there are some very good wines but the price will have to be right. The Liv-ex Merchant Members are predicting prices will be released, on average, 11.5 per cent lower than last year. Chateau Palmer was the first to release its 2017 to the market and at a 20 per cent discount to 2016 – will it be enough to get the market going?
We will be watching the Bordeaux 2017 releases as they hit the market and selecting the wines we believe offer the best opportunity for growth. For more information call us now on 0203 384 2262
Suckling is generally the first of the top wine critics to publish his ratings of the latest Bordeaux vintage each Spring and as the trade is currently supping its way around the region’s chateaux a critical pointer is of interest.
It is no surprise that Suckling refers to the reduced supply caused by the Spring frosts last year and that he has categorised 2017 as an average, Mid-‘Quality’ vintage, stating also that the “top wines of the vintage should add to the reputation of this unique year”.
Suckling is perhaps more generous than most critics with his perfect 100 point scores but no Bordeaux 2017 wine achieved that accolade at his in-barrel tastings. Yquem and Latour stand out as his top two wines, both awarded 98-99 points. Given Sauternes was one of the hardest hit regions by the frosts last year the achievement of Chateau Yquem’s team is considerable. Led by Pierre Lurton, cellar master Sandrine Garbay and Technical Director Francis Mayeur have done a spectacular job to create a wine described by Suckling as “Such clarity. Extreme but wonderful style.”
First Growth Chateau Latour, he describes as “Superb. Classic great Bordeaux. Wow.” Having exited the en primeur system six years ago we won’t expect to see Latour 2017 hit the market for a number of years.
Yquem stable mate Cheval Blanc, also owned by LVMH, scored highly at 97 – 98 and was the only St Emilion Grand Cru Classe A to be rated this highly. St Emilion was also particularly hard hit by the frosts.
Suckling’s top 2017 scores are set out in the table below:
98 – 99
98 – 99
97 – 98
97 – 98
97 – 98
97 – 98
97 – 98
97 – 98
97 – 98
97 – 98
97 – 98
Pape Clement Blanc
97 – 98
97 – 98
97 – 98
97 – 98
Vieux Chateau Certan
97 – 98
For more information and for a copy of our new Guide to Fine Wine Investment call us now on 0203 384 2262.
On the 9th of April the Bordeaux chateaux will open their doors to the world’s wine trade for the industry’s official sampling of the 2017 vintage. This annual gathering of global merchants and critics is one of the key events in the wine calendar and the success of a vintage campaign can determine the sentiment of the Bordeaux market for the remainder of 2018.
The rationale of the en primeur process was put in to question with seemingly over-priced campaigns during 2011 – 2014, but more successful 2015 and ‘16 en primeur campaigns have helped to rebuild confidence. Even so, we will continue to approach the en primeur process with caution and select only those wines that we believe offer real opportunity for growth.
The over-riding message about 2017 since April last year has been the effect of damaging frosts. Growers published their supply data earlier in the year and despite Bordeaux’s overall supply being down on 2016 by 40 per cent, very few investment-grade wines report serious supply issues. Left Bank wines from Pauillac, St Julien and St Estephe pretty much got away without any vine-damage, the Margaux commune was harder hit. The worst affected areas were towards the south and east of the region, with the chateaux of St Emilion, Pessac-Leognan and Sauternes most affected.
So, supply may be an issue for the 2017 vintage, but later good growing conditions in the year helped quality but it won’t be uniform and buyers will have to be selective with price adding a further key factor.
Supply will also be affected by how much wine the Chateaux will release en primeur. Another trend developing over recent vintages is the increasing amount being held back in cellar, with vineyard owners and managers looking to boost margin by drip feeding stocks into the market at later stages. So, for the best wines, the challenge will be getting hold of these wines at a strategically sensible price.
Bordeaux’s flagship First Growths saw an uplift in demand post the Brexit referendum when Sterling weakness presented a great buying opportunity for overseas collectors, but their market share has lost its previous dominance with the estates’ second wines being some of the highest traded wines on Liv-ex and enjoying excellent price growth performance. It will be interesting to see their quality scores for 2017 in the next few weeks.
Latour’s exit from the en primeur process following 2012 certainly impacted on the Chateau’s trading levels, but they took the hit for a long term supply strategy to hold vintages back until they are ready to drink, supporting higher prices and better margins. Latour has only recently started feeding wine into the market and we will watch the future price performance with interest.
The 2015 and 2016 en priimeur campaigns saw Liv-ex UK member sales grow to £58.6million and £82million respectively, but even these stronger figures are nothing like the £225million generated by the 2010 vintage campaign. That said, it was the previous peak of the market and values were eye-watering at the time.
When looking at the rationale of buying en primeur, you cannot take the broad-brush, ‘average discount to future values’ approach any more – you have to be selective and make your choices carefully, balancing quality score from key critics, price and overall vintage quality as your markers. Average return can mask individual wine performance. For example, Liv-ex reports that the 2015 vintage has delivered an average return in euros of 11 per cent, however the returns of individual wines included in the Bordeaux 500 index have a range of returns spanning from -17 per cent to +162 per cent growth performance. The vintage top performer, Margaux, has delivered 160% growth so far as a result of its superb quality with the added bonus of a commemorative bottle adding extra collector appeal.
Key to the up and coming 2017 tastings are the views of a few top critics. The days of the world waiting for Robert Parker Jnr’s view on a Bordeaux vintage are well and truly over and there appears to be a broader critical view, and influence on the market. Suckling and Martin are probably the two the growers and merchants will take most notice of but there possibly isn’t the same push on price dynamics, rather the affirmation of a broader view.
Our Bordeaux-based Director, Renaud Ruer will be at the tastings and we look forward to updating you through the campaign and we shall cover it in detail in our April Market Report.