Liv-ex Fine Wine Market Blog

Critics favour top Right Bank 2011s

As with last year, Liv-ex has calculated the mean average scores of 40 leading En Primeur reds. Each Liv-ex Total Score is based on the opinions of several key critics, among them Jancis Robinson, Decanter, Neal Martin, the Wine Spectator, and many more. (See the Liv-ex En Primeur Pages for the latest 2011 coverage.) 

Stephen Tanzer and World of Fine Wine Magazine have yet to publish their reviews, but the table below shows the top-scoring 2011s as it stands today. Right Banks Vieux Chateau Certan and Cheval Blanc nudge just ahead of the Premiers Crus to claim first and second place. Latour comes in third, though it was recently named "wine of the vintage" by the Liv-ex membership.  

Pontet Canet 2011 well received by market

Pontet Canet brightened the mood this morning with the release of its 2011 at €66 per bottle ex-negociant. The vintage has been well received so far and has traded on Liv-ex several times today at £689 per case, making it one of only two wines to have found a secondary market above its release price. (See the Liv-ex En Primeur Pages for the latest prices and scores.) As you can see from the chart below, the 2011 is slightly more expensive than the 2007 and the 2004. 

In the last few years, the quality of Pontet Canet's wines has risen sharply, with the 2009 and 2010 vintages both receiving perfect (or potentially perfect) scores from Parker. And although 2011 is by no means as exceptional as its immediate predecessors, several critics have suggested that it is a candidate for "wine of the vintage". With this in mind, the new release seems to offer relatively good value for money. But at £57 per bottle (and around £75 on the table), is it affordable enough to appeal to those who consider 2011 to be a "drinking vintage"?

Liv-ex Fine Wine 50 continues downward trend

The Liv-ex Fine Wine 50 reached a 13-week low on Friday. Concerns over the Bordeaux 2011 campaign continue to weigh on fine wine prices and the index has fallen rapidly since mid-April. As can be seen from the chart below, the benchmark failed to sustain its March breakout and the trendlines are currently forming a downward channel.

Friday roundup

With just a handful of Crus Classes out of the blocks, the 2011 vintage accounted for less than 1% of exchange turnover in the week to Friday. Lafite 2011 prices edged below £5,000 per case, while Rieussec - the only other new release to have traded on Liv-ex - held steady at £260. (See the Liv-ex En Primeur Pages for the latest news, scores and release prices.)

The 2011s have not sparked much excitement, but the 2009s continue to see strong demand. Boosted by their exceptional Parker scores, and the fact that they are now becoming physically available, the vintage accounted for 16% of turnover. Latour was the most heavily traded 2009 by value, and the brand as a whole generated more than a third of turnover. 

Outside Bordeaux, interest in Super Tuscans Sassicaia and Solaia lifted Italy's share of trading activity to 4%. 

The week's most traded fine wine brands are shown in the table below.

Beychevelle released in London at £495

Chateau Beychevelle broke the silence this morning with the release of its 2011 at €45.50 per bottle ex-negociant. This represents a reduction of 15% on 2010 and translates to a London release price of £495 per case. (See the Liv-ex En Primeur Pages for full coverage of the 2011 campaign.) 

At first glance, a cut of 15% seems conservative - particularly when the market is calling for First Growth reductions of up to 60%. But Beychevelle prices have risen so rapidly in the last three years that the new release is at least £50 cheaper than all other recent vintages, suggesting it is well priced. 

Despite the 2011's positioning, demand so far appears to have been muted. The brand is particularly popular in China, but it would seem that the Chinese market has yet to swing into action. 

Champagne and Burgundy prices hold firm

The 2011 campaign continues to unfold at a wearyingly slow pace. All was quiet on the EP front this morning, save for the release of Du Tertre. At €20.9 per bottle (ex-negociant), the new vintage is down 12 per cent on 2010. (See the Liv-ex En Primeur Pages for the latest news, prices and scores.) 

As outlined in yesterday's index update, high 2011 prices have knocked the market's confidence. As a result, fine wine prices edged lower in April and the Liv-ex Indices posted losses. Burgundy and Champagne, however, fared better than Bordeaux. 

The Liv-ex Champagne 25 Index measures the performance of 25 of the world's most sought-after Champagnes. As the chart below shows, the benchmark barely moved last month and is up 2% year to date. The Liv-ex DRC Index, which tracks the price movement of Domaine Romanee Conti's leading crus, also outperformed the rest of the market. Buoyed by strong demand for Richebourg and Echezeaux, the index rose 2% in April and has gained 4% since the start of the year. 

Liv-ex Fine Wine 100 falls 1.24%

The Liv-ex Fine Wine 100 retreated in April. High 2011 release prices had a negative effect on broader market sentiment and the index fell 1.24% to 289.92. (Full coverage of the 2011 campaign is available on the Liv-ex En Primeur Pages.) 

Although, in general, prices edged lower, buyers cherry picked top-quality Left and Right Bank wines. This can be seen from the table below, which shows the month's top risers and fallers. 

The premium that Lafite commands continues to decline and several vintages of the First Growth make an appearance in the bottom half of the table - including the 2004. Until recently, the '04 (£5,700) was the cheapest young vintage of Lafite on the market. But demand for the vintage cooled rapidly after the 2011 was released in London at a more attractive £5,200. 

The current levels of the Liv-ex Indices are provided below. 

What Parker's verdict means for Bordeaux 2011

Robert Parker published his take on the Bordeaux 2011 vintage on Friday. In general, there were very few surprises. But although the wait for Parker is over, the campaign has paused for the long weekend in France. (See the Liv-ex En Primeur Pages for the latest news, prices and scores.) Nonetheless, there is plenty to ponder. 

We analysed the reviews of 35 leading Bordeaux chateaux in order to calculate the vintage's mean score. Using the mid-point of each barrel-score spread for our calculation, 2011 achieved an average of 92.5 points - placing it between 2008 (93.7) and 2001 (91.9) in terms of quality. 

But what does this imply for 2011 pricing?

The new releases must be more affordable than comparable vintages in order to appeal to buyers. With this in mind, the table below shows the current 2001 and 2008 prices of the labels in our study. (All prices are for 12x75cl cases stored in bond.) Given that the '01s have now spent almost a decade in bottle, the 2011s will need to be subtantially cheaper in order to represent real value.

Two of the wines shown above have already come to market. If we compare their actual London release prices to the values of their 2001s and 2008s, it is clear why only one of them has attracted demand. 

Sweet murmurings

It was notably quiet on the release front this week. But while the Crus Classes waited for Parker to show his hand, there were a few flickers of activity in Barsac and Sauternes. Unfortunately, price reductions were modest and most of the wines have failed to stimulate real interest. 

So far, only Rieussec (JS 96-97) has seen active trade on Liv-ex. The wine is changing hands at around £250 per case, making it one of the most affordable vintages available (along with the 2006 and the 2008). 

As we have mentioned previously on the blog, Rieussec is a gold mine for those on a budget. In recent years merchants have acquired countless cases in order to secure allocations of Lafite. Stock has then been offloaded on the secondary market, thus depressing prices. 

In the last few months, however, prices have edged higher. It seems that buyers are once again seeking out wines that offer value for money - and, as bargains go, Rieussec is difficult to beat. 

If we divide the Liv-ex Sauternes 50 into its component brands, we find that Rieussec has outperformed its peers this year. Vintages 2000-2009 are up an average of 5%, compared to 3% for Coutet and 1% for Suduiraut.  

2011 prices dampen market confidence

Four weeks ago it looked as if the fine wine market was well on its way to recovery. But after regaining a measure of lost ground in the first quarter of the year, the Liv-ex Fine Wine 50 Index has turned on its heels. Why the sudden change in direction?

In the January Market Report we suggested that several scenarios could trigger (and sustain) a recovery in 2012 – among them a return to value. This is certainly something we saw in the first few months of the year. Following dramatic price falls in 2011, the First Growths finally re-entered the “buy zone” and began to find support. Optimism trickled back into the market and in January the Liv-ex Fine Wine 50 Index posted its first monthly rise since the summer. 

The next “positive trigger” that we noted in the report was high 2009 in-bottle scores. When Parker unveiled his vintage review in early March, he effectively moved the market overnight. In total, 19 wines were awarded 100 points – more than the perfect scores awarded to the 1982, 2000 and 2005 vintages combined. Parker’s approval not only strengthened trade in the 2009s, it also boosted confidence in Bordeaux wines in general. 

Two out of three, however, may not be enough. The third key factor that we outlined was an affordable 2011 campaign – something that has failed to materialise. Although many chateaux have reduced release prices compared to last year, most of the new releases are still more expensive than other vintages of a similar quality level. (See the Liv-ex En Primeur Pages for the latest prices and scores.) As the chart below clearly shows, this has undermined the market’s confidence.