The DRC to First Growth ratio cannot break through the 10x ceiling.
2020 has been the year of auction records. Most recently, Sotheby’s held two auctions in Hong Kong that both reached “white glove” status, meaning 100% of the lots sold. The top lot was once again DRC, this time twelve bottles of 1990 Romanee Conti at nearly double the pre-auction estimate
Although the Burgundy 150 is down 0.69% year-to-date the DRC index is up 4.6% and by the looks of the auction market, buyers are not deterred by the near record prices being asked of them. However, when compared to the top wines of Bordeaux, seen in the chart below, DRC seems to have reached a relative price ceiling.
The DRC/Fine Wine 50 ratio reached a high of 9.86 in July of this year and has not yet been able break the 10x barrier. A break through the 10x upper resistance might point towards further movement but for now DRC seems to have found a plateau.
With risk aversion continuing to rise as the Covid pandemic takes its toll financially, it would seem that collectors of Burgundy’s top crus are finding stability (even security) in the (high) numbers. But will buyers continue to chase the world’s rarest labels and push the ratio below to new levels? Or is it time for Bordeaux’s Firsts to have a moment in the sun?
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