Marketwatch spotlight Has the time come to refocus on Bordeaux?
Other regions may have been making headlines, but some classic wines from Bordeaux are looking perhaps surprisingly attractive to collectors
Fine wine buyers have been coming back to Bordeaux and experts suggest pricing on some top vintages may offer opportunities. While other regions may have grabbed the fine wine market spotlight, Bordeaux has been quietly putting a run together in the past 12 months.
‘On the secondary market, Burgundy is still flavour of the month, but we do see more people coming back to Bordeaux and prices are correspondingly increasing,’ said Jamie Ritchie, worldwide head of wine at Sotheby’s.
The Liv-ex Fine Wine 50 index, which tracks the first growths exclusively, rose by 11% in the year to 31 July. But it’s not just first growths. Château Palmer has been a top performer on the Fine & Rare [price] Index at auction house Acker so far this year.
More generally, some Bordeaux wines from top vintages appear undervalued, say experts. Ritchie highlighted 2005, which he described as on the boundary between young and old. ‘They are outstanding wines,’ said Ritchie. The picture will naturally vary between estates, but Ritchie said Bordeaux 2005s looked undervalued as a general rule. ‘I would expect them to come up in price pretty significantly over the next three years as we come up to the 20th anniversary [of the vintage].’
Château Latour 2005 has already risen in the past year, according to Liv-ex (see ‘Tasted & rated’, right). As a broad guide, Liv-ex quoted market prices for 2005-vintage first growths as follows (12x75cl in bond):
• Lafite Rothschild 2005: £7,600 (UK en primeur release: £3,750)
• Mouton Rothschild 2005: £5,700 (UK release: £3,500)
• Margaux 2005: £6,500 (UK release: £4,500)
• Latour 2005: £7,250 (UK release: £4,500)
• Haut-Brion 2005: £6,700 (UK release: £3,500) As previously reported, Liv-ex has also noted renewed secondary market interest in the lauded 2009 and 2010 vintages. High release prices before a market slump in mid-2011 means that several
Bordeaux 2010 wines remain cheaper today than during en primeur for that vintage.
While some analysts have reported sluggish momentum on younger Bordeaux vintages at times in recent years, there is evidence of more buoyant trading activity. Matthew O’Connell, head of investment at Bordeaux Index, said prices have increased faster on younger vintages than on more mature Bordeaux wines this year. Yet he added that the quality peaks in the 2015 and 2016 vintages also continued to look undervalued, given these vintages’ benchmark status.
Ritchie said mature Bordeaux remained strong on the secondary market, but he noted the 2016s ‘are generating interest’. He also said people ‘are realising that 2012s and 2014s offer good value for money and you can drink them now’.
Of the wider fine wine market, Wine Owners head of professional portfolio management Miles Davis recently wrote that the market ‘is calm, well underpinned by global demand – and a good place to be’. He added: ‘Blue-chip Bordeaux is well bid and is enjoying its best time for quite a while.’
O’Connell said resurgent demand from Asia-based buyers has helped. Ritchie said that a pause to additional US import tariffs on certain European wines has been a boost for Bordeaux, too. O’Connell also said the market is benefiting from people with money who are actively looking for opportunities. He described wine as ‘pretty inflation-proof’, adding that with prices expected to climb, there is arguably a ‘strong reason to buy wine now rather than in the future’.