As Bordeaux’s domination dwindles, Ella Lister considers other regions’ fine wines worth cellaring
Wine prices – as measured by the Liv-ex Fine Wine 100 index – fell for a record 12 consecutive months to the end of March this year. The Bordeaux-dominated index lost 11 per cent over the period (see figure 1), as first growths continue to shed the huge valuations they built up in the couple of years to June 2011. Nonetheless,the Liv-ex Fine Wine 50 (made up exclusively of Premiers Crus) remains up 32.7 per cent over five years, demonstrating that not all has been lost.
FIGURE 1: REGIONAL WINE INDEX PERFORMANCE FOR THE YEAR TO MARCH 2014
More recent investments have borne the brunt of the unravelling market, with widespread losses on overpriced Bordeaux en primeur purchases. A half-hearted attempt by châteaux to reduce prices in 2012 was not sufficient as most wines have since fallen in price, with notable exceptions being Pomerol powerhouses Petrus and Le Pin, as well as Château Mouton Rothschild’s second wine, Petit Mouton.
Pontet-Canet 2012, on the other hand, is now trading at around 13 per cent below its release price. This did not stop the property making a gutsy release of its 2013 vintage at the same price, before wine critics and the trade had had a chance even to taste the wine. As you will doubtless know, the 2013 harvest was one of the most challenging ever, and the resulting (red) wines are of questionable quality. Melanie Tesseron of Pontet-Canet insists “we are proud of and confident in our 2013”.
During a week’s tasting in Bordeaux at the beginning of April, the red wines were certainly variable in quality, with high acidity and often lacking body. Nonetheless, there were some perfectly pleasant – and even pleasurable – wines, more so on the left bank than the right as a general rule. The best did achieve fullness of (ripe-enough) fruit alongside delicacy. The dry whites were less adversely affected than the reds, while the sweet whites from Sauternes and Barsac were very successful.
In other words, these wines should not be dismissed out of hand, but nor do you need to rush out and buy them en primeur for investment purposes or fear of missing out (despite very low yields, these wines are not going to disappear from the shelves). UK merchants are being admirably restrained in their marketing of this campaign, and recommending the odd wine that does seem to present decent value in the context of the vintage and of market prices for older vintages of the same wine.
2013 is not a vintage that you will need to lay down for decades. However, I would largely disregard suggestions the wines should be drunk immediately they are bottled. The better wines will acquire equilibrium after a minimum of five years, at which point they will hopefully be available for purchase at a reasonable price.
In the meantime, what to lay down in your Octavian Vaults account? The good news story of the fine wine market this year is pretty much every region outside Bordeaux. A quick look at the new Liv-ex Fine Wine 1000 index shows relative immunity to the declines of the narrower indices. Including Burgundy, the Rhône, Italy, Champagne, and the New World, as well as lowerclassed Médoc, Right Bank and Sauternes crus, this index is down only 2.5 per cent year-on-year to March, and over five years has added one third to the value of its portfolio.
As other regions outperform Bordeaux, they are also stealing market share from the region. Bordeaux’s share of trade on Liv-ex is down to 82 per cent in 2013 from 95 per cent in 2010. Meanwhile Burgundy’s average representation has grown from just over 1 per cent to 7 per cent over the same period. Burgundy’s lodestar, Domaine de la Romanée-Conti, accounted for five of the top ten lots at auction over the last year (see opposite page).
Burgundy prices made a gain of 3.8 per cent in the year to March, trailing just behind Italy, with 4.3 per cent, and the rest of the world, whose American, Australian, and Portuguese wines finished the year up 5.9 per cent, indicating that horizons continue to broaden. Champagne, tortoise-like, also bucked Bordeaux’s downward trend with a 3.1 per cent gain, continuing to follow its steady and reliable trajectory of the last few years.
In fact, hare-like, three of the top five gainers in the year to March were Champagnes, increasing in value by as much as 28.6 per cent (Taittinger Comtes de Champagne 2002). A more recent trend is for sweet Bordeaux, representing three of March’s top five gainers, namely back-vintages of Rieussec and Suduiraut, presumably off the back of a successful 2013, suggesting that en primeur still influences the wider market.