July 10th 2017
At the halfway point of the year, the market finds itself in reasonable health, this despite facing its share of challenges from various quarters. Burgundy and Bordeaux’s respective en primeur campaigns passed off with varying degrees of success and prices seem to have found a surer footing than in some time.
Over the course of 2016 and beginning of 2017 the Liv-ex 100 index enjoyed a remarkable run, posting 16 months of consecutive gains, only (just) pausing for breath in April of this year when it was down a measly 0.5% on the previous month; though it has now recovered and pushed on to a new high of 307.01 at the end of June.
So far, so good one might think. However, it is worth noting that whilst the index was up nearly 25% in 2016, so far this year, it is a more pedestrian 3.4%. Those of a bullish sentiment might well take encouragement from this: upwards is onwards after all. On the other hand, those of a more nervous disposition might view the slowdown as an inevitable precursor to a reverse.
Market sentiment is crucial and with the 2016 Bordeaux campaign having passed and met with mixed results, the quieter summer months may prove to be a testing time for merchants’ resolve. However, against the backdrop of Brexit negotiations Sterling’s bumpy ride seems set to continue and overseas buyers may yet enjoy another unplanned ‘summer sale’, as they did after the UK referendum in June last year.
A word on En Primeur
Without question some of the wines of 2016 will go down as the greatest that Bordeaux has produced. The growing season was far from straight forward, winter and spring were unusually wet with much higher rainfall than normal. However, there was an abrupt change in the weather from the end of June, the wet weather gave way to drought which lasted until the middle of September. It was the better situated vineyards that allowed their vines to endure the summer and ensure the grapes were harvested in optimum condition. The defining characteristics of the vintage are the precise fine tannins, sweet ripe fruit and degree or so less of alcohol. Hence, the stage was set for a potentially very successful en primeur, dependent on price.
An early success was Cos d’Estournel, released early and at a price that appealed to all participants; namely negociant, merchant and client, it found favour with buyers and quickly sold through. However, if the market thought this would set the tone for the rest of the campaign, disappointingly Bordeaux had other ideas. Whilst there were undoubtedly other success stories, Lynch Bages and Canon (for the second successive year) spring to mind, the ponderous nature of subsequent releases and some ambitious pricing prevented any real momentum getting going as merchants and clients alike waited patiently.
As has been discussed previously in this report, EP is balancing act, in which it is unrealistic for any party to expect too much quarter to be given. Whilst 2016 was certainly a success for some, there is a lingering feeling that it could have been more so.
During the campaign we sold over 50,000 bottles of 143 different wines. However, volumes were meaningful of only around 60, with a core group of around 30 chateaux making up the lion’s share of sales. Our best-selling wines listed below span a healthy spread of price points and appellations. While certain are predictably sold out, others are still available in limited quantities.
Top 10 Wines
Ch Les Ormes de Pez Cru Bourgeois St Estèphe £250 per 12IB, 92-94 NM (limited availability)
Ch Léoville Barton 2ème Cru St Julien £745 per 12IB, 93-95 NM (limited availability)
Ch Brane-Cantenac 2ème Cru Margaux £630 per 12IB, 96-98 NM (limited availability)
Ch Canon 1er Grand Cru Classé St Emilion £880 per 12IB, 97-99 NM (sold out)
Ch Lynch Bages 5ème Cru Pauillac £1,170 per 12IB, 97-99 NM (sold out)
Ch Batailley 5ème Cru Pauillac £414 per 12IB, 93-95 NM (limited availability)
Ch Grand Puy Lacoste 5ème Cru Pauillac £735 per 12IB, 95-97 NM (limited availability)
Ch Beychevelle 4ème Cru St Julien £678 per 12IB, 96-98 NM (sold out)
Ch Cos d’Estournel 2ème Cru St Estèphe £1,400 per 12IB, 98-100 NM (sold out)
Ch Lagrange 3ème Cru St Julien £420 per 12IB, 94-96 NM (limited availability)
The last year or so has witnessed higher levels of activity than have been seen for some time as rising prices encouraged stock holders to take some profit, allowing some much needed restocking to occur. Whether the potential fillip of weakened Sterling tempts overseas buyers to top up further remains to be seen but for the time being prices seem to have found a level and merchants seem happy to hold healthy stock books.
The summer months are invariably a quieter time for the fine wine market, holidays and high days drawing peoples’ attention elsewhere, so as ever a clearer picture of the state of the market will only emerge in the Autumn, in the meantime there is the rosé to enjoy.